ABC News' Tahman Bradley reports: The country's benefit programs for the elderly – Medicare and Social Security – will be exhausted sooner than thought due to the economic downturn, the Social Security and Medicare Boards of Trustees said today.
Medicare's Hospital Insurance Fund is projected to exhaust its funds in 2024, five years sooner than last year's estimate, and Social Security will be exhausted in 2036, a year earlier than previously thought, the trustees announced.
"Social Security and Medicare benefits are secure today, but reform will be needed so they will be there for current and future retirees," Treasury Secretary Tim Geithner told reporters at a Treasury Department news conference.
Geithner said the report underscores "the need to act sooner rather than later" to make reforms to entitlement programs.
"We should not wait for the Trust Funds to be exhausted to make the reforms necessary to protect our current and future retirees," he said.
The report also indicates that Social Security ran a deficit last year for the first time since 1983, and it's projected to run deficits going forward.
The funds won't go totally bankrupt by the years the trustees projected they would be exhausted, but the programs will no longer be able to pay full benefits. Social Security would pay out roughly 75 percent of benefits through 2085, Medicare 90 percent in 2024.
The trustees think the health care overhaul signed by President Obama has given Medicare a longer life.
Heath and Human Services Secretary Kathleen Sebelius said there's no question the health care law has strengthened Medicare. She said the change in the projection for Medicare's Hospital Insurance Fund was due in large part to lower payroll tax revenues caused by the slower than expected economic recovery. But Sebelius added, "Having the Affordable Health Care Act in place is the main reason those projections aren't worse."
Sebelius and Geithner both stepped into the debt debate.
Sebelius argued that the Obama administration has put Medicare on a more sustainable course for the future and that finding savings rather than making cuts or privatizing the program works best for seniors.
"What we can't do is follow the Republican plan to turn Medicare into a voucher program and shift the costs to seniors," she said.
Acknowledging that on Monday the U.S. is set to reach the debt limit, Geithner once again encouraged Congress to move as quickly as possible to raise the limit "so that all Americans will remain confident that the United States of American will meet all of its obligations."
The Board of Trustees six members are: Geithner; Sebelius; Michael J. Asture, Commissioner of Social Security; Hilda Solis, Secretary of Labor; Charles P. Blahous, III; and Robert D. Reischauer.