WASHINGTON — As restructuring Social Security moves to the top of his agenda, President Bush is sidestepping a troublesome problem: Medicare, which provides health insurance for 41 million elderly and disabled people, is fast going broke.
Medicare is projected to exhaust its hospital-care trust fund by 2019, more than 20 years before Social Security is forecast to slide into the red. The day of reckoning could come even sooner, because Medicare's condition has been going from bad to worse.
The government's unfunded promises to future retirees under Medicare amount to a staggering $27.7 trillion over the next 75 years, according to Congress' Government Accountability Office. That dwarfs the $3.7-trillion liability over the same period for Social Security.
"The Medicare problem is about seven times greater than the Social Security problem, and it has gotten much worse," said Comptroller General David M. Walker, head of the GAO. "It is much bigger, it is much more immediate, and it is going to be much more difficult to effectively address."
New technologies and discoveries are likely to keep healthcare costs rising at a faster pace than overall inflation, making future Medicare spending much harder to predict than the price tag for Social Security benefits.
"Costs are going to soar, and that is going to put tremendous pressure on federal revenues," said John L. Palmer, one of six trustees of Social Security and Medicare finances.
"If you stand back and say, 'Which program has the greater need, which is going to be more a problem?' the answer is clearly Medicare," said Palmer, a professor at Syracuse University's Maxwell School.
Lawmakers, senior administration officials and outside experts are all aware that Medicare's current course will take it over the brink. Even Bush has acknowledged a problem, saying Thursday at a White House economic policy conference that "we've got more to do" on Medicare.
"Medicare suffers from all the demographics that Social Security has and has the added problem of rising healthcare costs," Treasury Secretary John W. Snow said in an interview.
But no one seems to want to grapple with the implications. Politicians "just give you blank stares," said Robert Moffitt, a health policy analyst at the conservative Heritage Foundation.
"The president wants to cut the deficit in half, and he wants to keep the tax cut, but how are they going to deal with the exploding costs of healthcare?" he asked. "It's almost as if fiscal conservatives have become a fringe group here."
