The Congressional Budget Office forecast Tuesday that Medicare's hospital insurance trust fund won't go broke as soon as previously expected. The agency's revised date of fiscal doom for the massive entitlement program is five years later than the projection issued in February.
But going broke in 2030 instead of in 2025 would still be going broke.
And the CBO also predicted Tuesday that on its current track, Social Security trust fund would go bankrupt in 2030 - one year earlier than the agency's previous forecast for that entitlement giant.
As for that CBO projection on Medicare, it's based on the dubious assumption that long-term spending cuts mandated by the Patient Protection and Affordable Care Act will actually be implemented.
However, Washington has a long tradition, predating Obamacare, of promising Medicare cost reductions that it never delivers.
And as The Washington Post reported Wednesday: "Because demographics put greater pressure on federal entitlement spending over the next generation than excess cost growth, efforts to bend the health-care cost curve - even if successful - miss the larger problem: If per-beneficiary costs rise not a penny, growing numbers of beneficiaries would still create their own fiscal pressures. For instance, under Medicare's current structure, a couple about to retire stands to receive three times as much in benefits as they paid in Medicare payroll taxes during their working lives."
Thus, even if it were realistic to think that Obamacare will reduce long-term Medicare costs (and it's not), the U.S. population's continuing aging demands fundamental entitlement reform.
Yes, the federal deficit fell to "only" $680 billion for Fiscal Year 2013 after four straight years of surpassing $1 trillion.
Then again, that $680 billion was still the fifth largest deficit in U.S. history.
And while the CBO report forecasts "shrinking" deficits through 2018, it warns that "the long-term budget outlook is much less positive."
How much "less positive"?
The CBO projects that public debt, now 74 percent of gross domestic product (GDP), will soar to 106 percent by 2039. It adds that federal debt "is projected to grow faster than the economy starting a few years from now, and because debt is already unusually high relative to GDP, further increases could be especially harmful."
Also especially harmful: The persisting negligence of our elected officials in Washington to make the tough bottom-line calls necessary to salvage not just Medicare and Social Security, but our nation's long-term fiscal security.
That will require raising taxes to pay for the programs, raising eligibility ages and/or cutting benefits - overdue austerity measures that become more painful and politically difficult every passing year.
And the new CBO prediction on Medicare's year of ruin won't spare our nation from the devastating consequences that loom if those hard choices aren't made.
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