U.S. Senate Republican Policy Committee - Larry E. Craig, Chairman - Jade West, Staff Director
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March 31, 1999
Republican Economy And Reforms Bolster Social Security and Medicare Trust Funds
Social Security and Medicare Trustees Report

In their annual report today, the Social Security and Medicare trustees reveal the improved financial shape of both trust funds since last year's report. The Social Security (OASDI) trust fund's deficit date (when payroll tax revenue will no longer be able to pay for benefits) has been pushed back another year -- from 2013 to 2014 -- while its insolvency date (when total trust fund income plus trust fund reserves will not be able to pay for benefits) has been pushed back two years -- from 2032 to 2034. The Medicare (Part A or HI) trust fund's key date has improved even more. Medicare's insolvency date has been pushed back seven years -- from 2008 to 2015.

The trustees' reports attribute "the continued strong performance of the U.S. economy" and -- in addition, in the case of Medicare -- "legislative action taken in 1997" for both trust funds' improvement. In both instances, the Republican Congress deserves the lion's share of credit. It was the GOP Congress that insisted on and enacted a pro-growth balanced budget and tax cuts. At the same time, Republicans in Congress enacted Medicare reform in 1997.

Yesterday, the Dow closed above 10,000 for the first time. From the end of 1992 to the end of 1994, when Democrats controlled both the White House and Congress, the DJIA rose just 16 percent -- from 3301 to 3834. In contrast, from the end of 1994 through yesterday, the DJIA has risen 160 percent -- from 3834 to 10,007. Likewise, it was Republican impetus beginning in 1995 that resulted in Medicare reform in 1997 -- reform that President Clinton did not receive when his own party controlled Congress.

While the news of increased solvency for Social Security and Medicare is good, it is not good enough. We need to put both on a sound fiscal footing where deficits and bankruptcy are not near-term possibilities. It is time, after six years in office, that the President took the lead in reforming both these critical programs. Regrettably this has not only not been the case, but just the opposite -- as the President's recent undermining of the Bipartisan Medicare Commission's reform proposal shows.

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