Noteboom The Law Firm

President-Elect Obama Says He'll Reshape Social Security and Medicare Programs

Michael J. Astrue, Commissioner of Social Security, welcomed news reports that President-elect Barack Obama wants to begin discussions on the future of entitlement programs, including Social Security.

“With all the other challenges President-elect Obama is facing, it would be understandable if he were to defer decisions on Social Security for a period of time,” Commissioner Astrue said.  “He is showing true leadership in starting this process earlier rather than later, and everyone at the Social Security Administration stands ready to support this effort in every way we can.”

A January 16, 2009 article in the Washington Post reports the President-elect:

"...pledged to shape a new Social Security and Medicare 'bargain' with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs."

That discussion will begin next month, Obama said, when he convenes a “fiscal responsibility summit" before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."

The president-elect exuded confidence that his economic team will succeed where others have not.

"Social Security, we can solve," he said, waving his left hand. "The big problem is Medicare, which is unsustainable. . . . We can't solve Medicare in isolation from the broader problems of the health-care system."

Medicare, the government health program for retirees and the disabled, is projected to be insolvent by 2019, according to the most recent report by the Social Security and Medicare trustees. Over the next two decades, Medicare spending is expected to double, consuming nearly one-quarter of the federal budget.

Commissioner Astrue, who has led the agency since February 2007, is confirmed to a term that expires in January of 2013.

In its 2008 report on the financial health of the Social Security Trust Funds, Commissioner Astrue and his fellow Trustees indicated that, without changes, the Social Security Trust Fund will be exhausted by 2041 and there will be enough money to pay only about 78 cents for each dollar of scheduled benefits after 2041.  The Trustees urged resolution of the issue soon to make sure Social Security continues to provide a foundation of protection for future generations.