Senators Feinstein and Cornyn Introduce Legislation to Address Looming Shortfalls in Social Security & Medicare
-Legislation would establish permanent, bipartisan Entitlement Commission-
Jan 16 2009
Washington – U.S. Senators Dianne Feinstein (D-Calif.) and John Cornyn (R-Texas) today introduced legislation that would create a permanent, bipartisan entitlement commission to guarantee the long-term financial stability of Social Security and Medicare.
“Social Security and Medicare today account for roughly half of all federal spending. Within a decade they will grow to more than 60 percent. If this continues, these vital programs will become an unsustainable burden on our economy and the American people,” Senator Feinstein said.
“This is the third rail of American politics. Past Congresses and Presidents have failed to take the steps needed to ensure the long-term health of Social Security and Medicare. There is time, but we must take steps now: Social Security will start running out of money in 2041, and Medicare will start to run out of cash by 2019. This legislation will offer a practical way forward.”
“At a time when the federal government is spending unprecedented amounts of taxpayer dollars and the federal deficit is at record levels, addressing out of control entitlement spending has never been more important,” Senator Cornyn said.
“Millions of Americans depend on Social Security and Medicare, and we must work together in a bipartisan fashion to reform these critical programs and help ensure their long-term financial stability. Continued inaction is irresponsible and only passes the burden on to our children and grandchildren. These programs can no longer be left unchecked, and creating a commission to oversee our entitlement spending is a crucial step in working to save Social Security and Medicare.”
Social Security is projected by its trustees to start running out of money by 2041.
Medicare is projected by its trustees to be exhausted by 2019.
The Social Security funding shortfall has ballooned to roughly $4.3 trillion, while the Medicare shortfall needs $8.7 trillion to remain solvent. A combination of a 122 percent increase in payroll taxes and a 51 percent reduction in program outlays will be needed for the Medicare program to balance its budget.
Last week, the Congressional Budget Office announced that the fiscal year 2009 budget deficit is expected to be an unprecedented $1.2 trillion. Among other increases, entitlement programs are expected to grow by at least 8 percent this year.
Summary of the Social Security and Medicare Solvency Commission Act of 2009:
- The legislation would create a permanent, bipartisan Entitlement Commission consisting of 15 members selected for their financial expertise.
- Of these members, seven would be selected from the majority party, seven from the minority party and one from an independent, non-affiliated party;
- The Entitlement Commission would make recommendations only when two-thirds of its members are in agreement;
- Would require Congress to vote on Commission recommendatwould be required to act quickly on Commission recommendations -- acted on quickly— Congress must vote within 120 days of receiving commission reports.