Social Security Not So Secure

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The government's two biggest benefit programs - Social Security and Medicare - are facing enormous challenges, a new report says.

An annual report says Social security will exhaust its trust fund resources by 2041.

But the situation for Medicare is more severe. Soaring medical costs could cause the program to run out of its reserves by 2019.

Those are the same dates listed in last year's report. But government experts warn financial pressures will begin even earlier, when the programs begin paying out more benefits each year than they collect in payroll taxes.

Medicare is already projected to pay out more than it receives in income starting this year. For Social Security, that is expected to happen in 2017 - nine years from now.

"The financial difficulties facing Social Security and Medicare pose enormous challenges," the trustees said in their report. "The sooner these challenges are addressed, the more varied and less disruptive their solutions can be."

Treasury Secretary Henry Paulson, one of the trustees, warned that the country was facing a fiscal train wreck unless something is done.

"Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America's future prosperity," Paulson said. "Our nation needs a bipartisan effort to strengthen both programs for future retirees."

Copyright 2008 The Associated Press. All rights reserved.

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