(CQ Today) -- The long-term financial outlook for Social Security and Medicare remained grim but essentially unchanged in 2007, trustees for the two huge entitlements said Tuesday. They warned again that Congress should act soon to shore up the programs, advice that lawmakers will probably ignore. The trustees, in their annual report on the two programs, issued a “Medicare funding warning” for the third year in a row, which will require the next president to propose legislation to cut the share of Medicare costs borne by the government. President Bush this year sent Congress the first such proposal, although Democrats who control both chambers are not expected to act on his legislation. The trustees said in their report that Social Security’s trust funds will become insolvent by 2041, while Medicare’s hospital insurance trust fund will hit that point in 2019. Both dates are the same as those predicted last year. When the Social Security trust funds exhaust their reserves, by law benefits would have to be cut to match annual program revenues. There is no such legal requirement for the the Medicare fund, so the government could react to its insolvency simply by borrowing from the treasury to cover shortfalls. Medicare Part A, which is funded by the hospital insurance trust fund, is projected to begin paying more in benefits than it collects from payroll taxes this year.
