Statement On The 2011 Trustees’ Reports By Hon. David M. Walker, Founder And Ceo Of The Comeback America Initiative, Former U.S. Comptroller General, And Former Public Trustee

David Walker, Founder and CEO of the Comeback America Initiative, former Comptroller General, and former Public Trustee, issued the following statement today on the 2011 Trustees’ Reports

“The release of the 2011 Social Security and Medicare Trustees’ Reports serves to re-enforce the need to take steps to address the huge structural deficits that lie ahead for these important social insurance programs and the federal government as a whole. This year’s Trustees’ Reports included only bad news for both programs.

According to the 2011 Trustees Reports, the combined Social Security programs and Medicare’s Hospital Insurance program experienced negative cash flows in 2010. This means that both Social Security and Medicare are now adding to the federal deficit. These negative cash flows are expected to continue and grow until the related trust funds are exhausted in 2036 and 2024, respectively. In addition, the individual Social Security Disability Insurance Trust Fund is expected to run dry in just seven years!

On the political appointee versus professionals front, for the second year in a row, the Office of the Chief Actuary of Medicare gave the equivalent of an adverse opinion on the Medicare Trustees’ Report. According to the Medicare Chief Actuary’s report, ‘the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations either in the short-range or the long-range’. The Chief Actuary Office’s formal estimate of the potential cost difference will not be available until May 18 but it will be significant. For example, the estimated difference in last year’s report for the combined Medicare programs was over $12 trillion higher in present value dollar terms than estimated by the Trustees. The Office of the Chief Actuary’s opinion and the alternative cost estimate raise serious questions regarding the reliability of the Medicare Trustees’ Report and the true financial impact of the Affordable Care Act of 2010 (ACA).

The time has come to tell the American people the truth regarding Medicare and ACA. The federal government has promised far more than it can reasonably be expected to deliver in connection with these health programs. Both Medicare and ACA are in need of fundamental reform in order to rationalize the related promises and control health care costs. Washington policymakers should also take steps to make the Social Security program more solvent, sustainable, secure and more savings oriented.”

ABOUT CAI

The Comeback America Initiative (CAI) is a Bridgeport, CT based non-profit organization that promotes fiscal responsibility and sustainability by engaging the public and assisting key policymakers on a non-partisan basis in order to achieve solutions to America’s fiscal imbalances. CAI’s goal is to foster a national discussion around the themes in the book “Comeback America,” with an emphasis on various specific policy, operational and political reforms to put government on a more prudent, sustainable and accountable fiscal path. The organization’s primary focus is federal fiscal issues; however, it will also highlight the larger national fiscal challenge and engage in certain reform initiatives in selected states (e.g., Connecticut) and cities (e.g., Bridgeport, CT).

CONTACT:

Trey Ditto – KCSA Strategic Communications
tditto@kcsa.com or 212-896-1248