Social Security and Medicare going broke faster

The bad economy has shortened the time before the trust funds that support Social Security and Medicare, the nation's two biggest benefit programs, will be unable to pay all promised benefits, the government reported Friday.

The Medicare hospital insurance fund will be exhausted in 2024, five years earlier than last year's estimate, government accountants now figure. The new report says the Social Security Trust Fund will be exhausted in 2036, one year earlier than previously estimated.

The trustees explained the weaker economy means fewer people are working and paying Medicare premiums, even as health care costs continue tor rise.

But those estimates accept at face value the "savings" included in the massive government takeover of health care that President Barack Obama got Congress to enact in 2010, savings which are supposed to extend the life of the Medicare fund by 12 years.

If those changes in health care law are reversed, or if for other reasons they fail to produce the savings promised, the administration said Friday the Medicare trust fund would actually be exhausted in 2016.

Treasury Secretary Timothy Geithner, who chairs the trustees panel, said the new report underscores "the need to act sooner rather than later to make reforms to our entitlement programs. ... We should not wait for the trust funds to be exhausted to make the reforms necessary to protect our current and future retirees."

Most in Congress agree -- but only in theory.

In the real world, threatening to tamper with the "benefits" promised retirees -- most of whom remain convinced their payroll taxes were set aside for them in a "lock box" -- is still considered political suicide.

The most obvious short-term options -- aside from some sort of privatization or other market-oriented overhaul, which Democrats have made clear they will never support -- are to hike the retirement age, to reduce benefits across the board, to massively hike taxes on productive Americans or to "means test" the benefits, turning both Medicare and Social Security into flat-out welfare programs.

As the deadlines near, Congress will find it has less and less room to choose.