[Congressional Record Volume 142, Number 81 (Wednesday, June 5, 1996)]
[Senate]
[Pages S5867-S5868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   1996 ANNUAL REPORTS: BOARD OF TRUSTEES OF THE SOCIAL SECURITY AND 
                          MEDICARE TRUST FUNDS


            Financial Status of Medicare and Social Security

   Mr. MOYNIHAN. Mr. President, in their annual report released 
today, the

[[Page S5868]]

board of trustees of the Federal hospital insurance trust fund 
estimated that the assets of the trust fund--Part A of the Medicare 
Program--will be exhausted by the end of calendar year 2001. Last 
year's estimate was 2002. As ominous a statement as this may seem, it 
is meaningless. In point of fact, Medicare part A outlays have exceeded 
payroll tax collections since 1992, when a cash flow deficit appeared 
of approximately $3 billion--a deficit funded with general revenues. 
Medicare part A outlays that year were $85 billion, while payroll tax 
collections were only $82 billion.
  The trustees of the old age, survivors, and disability insurance 
trust fund also issued their annual report today. They estimate 
exhaustion of the old age, survivors, and disability insurance trust 
fund in the year 2029. Last year's estimate was 2030. Again, 
meaningless. Social Security outlays will exceed payroll taxes in the 
year 2012. By the year 1997, outlays for Social Security and Medicare 
part A will exceed payroll tax collections for Social Security and 
Medicare. According to the 1996 trustees' reports, combined outlays for 
Social Security and Medicare part A in 1997 will be $514 billion; 
payroll tax receipts will be only $506 billion. And the combined 
deficit for the two programs will grow rapidly thereafter, reaching 
almost $100 billion in about 10 years.


      Effect of Medicare and Social Security on the Federal Budget

  Prior to 1992, during the period in which Medicare part A payroll 
taxes generally exceeded outlays, the program contributed to a 
reduction in the overall deficit. This is because the deficit 
calculation is based on the unified budget, and the trust fund into 
which Medicare payroll tax collections are deposited is merely an 
accounting device. It is irrelevant for purposes of calculating the 
deficit. Since 1992, with outlays consistently exceeding payroll tax 
collections, Medicare part A has been adding to the deficit. If 
Medicare and Social Security are in the black, they reduce the deficit. 
If they are in the red, the deficit is increased.

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