Funding for Medicare and Social Security will come up $45 trillion short in the next 75 years, federal agencies reported.
Without reforms, the cost of these programs will total 18% of the gross domestic product by 2080, according to the Fiscal 2007 Financial Report of the United States Government, which was released by the U.S. Treasury Department and the Office of Management and Budget.
Medicare, Medicaid and Social Security currently make up 40% of total government expenditures. By 2030, they’re expected to account for more than 50% of total expenditures. Medicare spending alone over the past three decades has grown at more than twice the overall rate of economic growth. Medicare trustees predict that the program’s future expenditures will continue to outpace overall economic growth.
Overall, Treasury revenue for fiscal 2007 was $2.6 trillion, a 7.6% improvement from the previous fiscal year.
“The $2.6 trillion in record-breaking revenues that flowed into the Treasury this year reflect a healthy economy,” said Treasury Secretary Henry Paulson Jr. in a written statement. “But to continue this progress, we must maintain discipline on spending. The expected revenue in years ahead will not come close to meeting the growing cost of our social insurance programs. We all have a responsibility to fix this problem now before it becomes a severe economic burden for our children and grandchildren.” -- by Jennifer Lubell
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