Top White House Official Says Medicare is Five Years Away from Bankruptcy

July 13, 2011

Medicare Benefit Cuts Loom as Democrat Plan to Bankrupt Medicare Works Faster Than Expected

As the Medicare and Social Security actuaries prepare to testify before the House Budget Committee Wednesday, observers may want to note that White House Chief of Staff Bill Daley said on Sunday that the Medicare trust fund “will run out of money in five years if we don’t do something.”
Daley’s prediction for Medicare’s bankruptcy is even more concerning than the forecast issued by the Obama-appointed trustees of Medicare, who predicted Medicare going bankrupt in 2024.
Medicare’s trustees have noted that absent action to avert Medicare’s impending bankruptcy, the trust fund will see immediate benefit cuts. It appears that the Democrat plan to bankrupt Medicare is working faster than expected.

BACKGROUND:

As the Medicare and Social Security actuaries prepare to testify before the House Budget Committee Wednesday, observers may want to note that White House Chief of Staff Bill Daley said on Sunday that the Medicare trust fund “will run out of money in five years if we don’t do something”:

WHITE HOUSE CHIEF OF STAFF BILL DALEY: “Medicare’s got to be strengthened. It will run out of money in five years if we don’t do something. Obviously there has to be improvements to it.” (Remarks from Bill Daley, ABC”s “This Week,” 7/10/2011)

Daley’s prediction for Medicare’s bankruptcy is even more concerning than the forecast issued by the Obama-appointed trustees of Medicare, who predicted Medicare going bankrupt in 2024:
TRUSTEES AGREE THAT MEDICARE IS GOING “BANKRUPT”:

REP. DAVE REICHERT (R-WA): “Medicare is going bankrupt, do you both agree with that? And it’s accelerating, true?”

BLAHOUS: “Yes.”

REISCHAUER: “Yes.” (Remarks from Charles P. Blahous and Robert Reischauer, “Hearing on the 2011 Medicare Trustees Report,” Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)

TRUST FUND “VERY LOW” AND “ON A RAZOR’S EDGE” BEFORE “RUNNING OUT ALTOGETHER IN 2024”: “Here I will simply relate this shift to the theme of overall uncertainty in the Medicare projections. It may exaggerate—but not by much—to note that the HI Trust Fund projects to be on a razor’s edge for several years, starting by the latter part of this decade. This was true not only in the 2010 report but is also true in this year’s report. By mid-2015, for example, we only project enough assets in the HI Trust Fund to cover less than half a year of benefit payments in the absence of incoming dedicated revenues. This financing reserve is thus very low for several years before running out altogether in 2024. It thus does not take a great deal of creativity to imagine a 2012 report in which the HI Fund exhaustion date moves again by several years, in either direction, even if there are relatively subtle changes in projections of annual program operations.” (Testimony from Charles P. Blahous,Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)
DEMOCRATS’ PLAN FOR MEDICARE WILL “END MEDICARE AS WE KNOW IT”:

ROSKAM: “In fact, Medicare as we know it will end in 2024 absent some change in policy or some change in moving forward. That’s right isn’t it?”

BLAHOUS: “Yes.” (Remarks from Charles P. Blahous, Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)

Medicare’s trustees have noted that absent action to avert Medicare’s impending bankruptcy, the trust fund will see immediate benefit cuts. It appears that the Democrat plan to bankrupt Medicare is working faster than expected:
CUT IN BENEFITS UNDER DEMOCRAT MEDICARE PLAN IS REAL, NOT JUST HYPOTHETICAL:

REP. PETER ROSKAM (R-IL): “So that cut just so I’m clear, is not a hypothetical cut, it’s not a hypothetical delay, it’s an actual delay in payment to the point of reaching this 17% number based on your own projections. Is that right?”

BLAHOUS: “That’s right. The Social Security Act which deals with these trust fund issues is very explicit that payments can only be made from the trust funds.” (Remarks from Charles P. Blahous, Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)