Slow economic recovery worsens U.S. benefit programs

13:25, May 14, 2011      

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The slower than expected economic recovery worsened the social benefit programs in the United States, according to a report released by the government on Friday.

Medicare, the U.S. health insurance program for the elderly and disabled, won't have sufficient money to pay full benefits starting in 2024, revealed the annual report conducted by the Social Security and Medicare Boards of Trustees.

Social Security, the U.S. federal program that provides income to retirees, will run out of funds for paying full benefits in 2036, noted the report, which will be sent to the Congress.

Treasury Secretary Timothy Geithner, who chairs the trustee's panel, said the new report underscored "the need to act sooner rather than later to make reforms to our entitlement programs."

He said that "while both Social Security and Medicare have sufficient resources to meet their obligations for at least the next decade, it is important that we put in place reforms to strengthen these programs."

"We should not wait for the trust funds to be exhausted to make the reforms necessary to protect our current and future retirees," he said.

The trustees said that they moved the target date for the Medicare hospital trust fund to be exhausted from 2029 to 2024 because of a weaker economy. The Social Security trust fund was projected to be exhausted in 2036, nine years earlier than last year's estimate.

Both projections have been affected by a slower-than- anticipated economic recovery, according to the report.

U.S. economy grew at a pace of 2.9 percent in 2010 after shrinking by 2.6 percent in the previous year due to the financial crisis and economic recession.

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