Released on = May 14, 2007, 9:05 am

Press Release Author = Lala C. Ballatan

Industry = Law

Press Release Summary = Trustees of the Social Security and Medicare programs
announced yesterday, May 13, 2007 that the estimated exhaustion of both programs’
trust was extended for a year later than previous estimates. The Social Security’s
trust fund will be exhausted in 2041 while the Medicare’s trust fund is expected to
deplete in 2019.

Press Release Body = Trustees of the Social Security and Medicare programs announced
yesterday, May 13, 2007 that the estimated exhaustion of both programs’ trust was
extended for a year later than previous estimates. The Social Security’s trust fund
will be exhausted in 2041 while the Medicare’s trust fund is expected to deplete in
2019.

Los Angeles, California, May 14, 2007 – Social Security and Medicare trust funds
will not yet be depleted until 2041 and 2019, respectively. This was the statement
of the two programs’ trustees last Monday, May 8, 2007 at Washington during their
annual report of the financial status of these two biggest benefit programs of the
government. These recent estimates are a year later than previous estimates by the
trustees.

According to the trustees, the dates of estimated exhaustion of funds were extended
due to the minor reductions in projected benefits and somewhat higher tax
collections.

Still, even if with these minimal changes, the trustees are resolved in their
declaration that the Social Security and Medicare Programs remain beset with serious
financial predicaments, especially with the coming retirement of over 78 million
baby boomers in the year 2018.
Medicare is already on dire financial situation. Right after the first report by the
trustees about the two biggest government program funds’ depletion, it set off a
Medicare funding warning. This required President George W. Bush to submit a
proposal to trim down Medicare costs, early next year.

The Medicare funding warning started when the reports of the Social Security and
Medicare’s trustees reach the conclusion that financing Medicare required a general
revenue amount to compose over 45% of the program’s outlay. The trustees also made
these estimates last year.

Accordingly, President Bush needs to propose counteractive action measures during
the first few months of the coming year. Meanwhile, there is a need for Congress to
recognize such proposals. There is no requirement for them, however, to act on these
proposals.

Senior citizens’ lobbying groups have already complained about the Medicare funding
warning, included in the Medicare on 2003, together with the passage of the
prescription drug benefit.

According to these lobbying groups, there is no harm if Medicare is to receive at
least 45 percent of its funding from general revenue as much as there is no harm for
the other government programs to be rewarded with 100 percent general revenue
funding. Compared to the other government programs, Medicare has other sources of
funding. These are through payroll taxes and insurance premiums.

Issues regarding Social Security and Medicare continue to escalate as reports from
the trustees become worrisome.

Adding more to the disputes is President Bush’s proposal in 2005 to create personal
savings accounts for the present generation’s younger workers as an answer to the
funding shortfall of the Social Security as foreseen. Bush’s proposal is part of his
statement to make an overhaul of the Social Security. However, Congress has not done
anything about this yet.

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