The nation’s economic downturn has added to the weakness of Medicare and Social Security. According to this month’s report, the strength of the Social Security system has decreased more sharply in the past year than at any time since the mid-1990s.
The government reports a prediction that the trust fund from which Social Security payments are made will run out of money in 2020, while the fund for Medicare will cease in 2017. Furthermore, beginning eight years from now, Medicare will be unable to pay all its hospital bills.
Administration officials believe if Congress acts immediately, the issue could be resolved three ways: by raising Social Security payroll taxes by 2 percentage points – from 12.4 percent to 14.4 percent; by reducing benefits by 13 percent; or a combination of the two.
Key lawmakers want to create a plan to sustain the retirement programs by increasing the retirement age, bringing in new revenue, and slowing the growth of the size of retirement checks to wealthy Americans.
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