Stretching the Social Safety Net

By Covering Business     March 14, 2012

Federal spending on Medicare and Social Security is accelerating rapidly to accommodate an aging population. Using current assumptions, the Treasury projects Medicare costs will grow from 3.6% of GDP in 2010 to 5.5% by 2035 and that Social Security’s trust fund reserves will be depleted by 2036.

To address growing concern over the coming shortfall in retirement insurance programs, the Congressional Budget Office projected the impacts of various cutbacks on the budget and on program beneficiaries.

Among the CBO’s findings:

• Raising the Medicare eligibility age to 67 from 65 would lower program spending by roughly 5% and increase costs for many beneficiaries.

• Raising the full retirement age for Social Security to 70 from 67 would lower program spending by roughly 13% and cut lifetime benefits.

• Raising the earlier eligibility age for Social Security to 64 from 62 would have a negligible impact on program spending and would increase monthly benefits.

Read the full report (PDF).

This entry was posted on Wednesday, March 14th, 2012 at 6:16 am. It is filed under Tools & Resources and tagged with CBO, gdp, health care, medicare, retirement, social security. You can follow any responses to this entry through the RSS 2.0 feed.