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(Haraz N. Ghanbari/AP)
Secretary of Health and Human Services Mike Leavitt, left, Secretary of Labor Elaine Chao, center, and Secretary of the Treasury Henry Paulson. In their annual report on the financial health of the government’s two biggest benefit programs, the trustees said the programs could go broke within decades if they aren’t overhauled.

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Filed under: WASHINGTON , Charles Hurt , Congress

WASHINGTON (Map, News) - Despite a sobering report from the trustees who oversee the country’s two largest entitlement programs, Congress made little effort in its latest budget proposal to avert what many experts say is a looming crisis for Social Security and Medicare.

“We are increasingly concerned about inaction on the financial challenges facing the Social Security and Medicare programs,” the non partisan trustees wrote in their latest financial report released last week.

“The longer we wait to address these challenges,” they said, “the more limited will be the options available, the greater will be the required adjustments and the more severe the potential detrimental economic impact on our nation.”

For decades, Congress has been borrowing from the Social Security surpluses to pay for other government programs.

But in two years, the trustees wrote, the surpluses will begin shrinking, and they will vanish by 2017. Congress will then have to raise taxes or cut benefits to keep the program solvent. If no action is taken, the program will be bankrupt by 2041, and payments to seniors will have to be drastically cut.

For Medicare, the prognosis is even more stark. This year, the program that provides medical coverage for 40 million elderly and disabled Americans begins paying out more than it collects. In 2019, the trustees predicted, the program will go broke.

“Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America’s future prosperity,” said Treasury Secretary Henry Paulson, who is also a trustee.

The report “reinforces the need for Congress to address runaway entitlement spending that will bankrupt future generations of Americans,” House Republican leader John Boehner, R-Ohio, said.

Instead of proposing structural changes in the programs in the latest budget proposal, Democrats have cut an additional $50 billion out of Medicare to be set aside in a reserve fund that can be used either for Medicare or other purposes.

Republican proposals are “nothing less than another way to choke off funds to seniors who need help,” Sen. Charles Schumer, D-N.Y., said. “If there has to be a choice between preserving unnecessary tax cuts for the super rich or keeping good on our promises to 42 million Medicare beneficiaries, I’d choose the latter every time.”

churt@dcexaminer.com