WASHINGTON - March 23 - The 2004 Social Security and Medicare Trustees reports, released today, highlight the continuing stability of Social Security as well as the prudence of early action to strengthen the trust fund for the retirement of the Baby Boom generation. They also underscore the volatile situation in Medicare, and all health coverage, due to skyrocketing health costs.

Unfortunately, the reports continue the escalation of rhetoric of the last few reports issued by the Social Security Board of Trustees—which is dominated by senior Bush administration officials—and in the administration’s own statements about Social Security. Such rhetoric has added to the dysfunction in the national debate over the past few years on how to strengthen to these vital public programs for retirees.

In a departure from longstanding practice, all of this year’s reports include so-called “infinite horizon” projections, which purport to estimate funding shortfalls into infinity. But such projections, which are highly uncertain, only serve to mislead the public about the true state of Social Security and Medicare finances. Ironically, President Bush has stopped making budget and budget deficit projections longer than five years into the future on the grounds that such projections are too speculative.

It is the responsibility of public officials to lead a national process of consensus development on necessary steps to address future funding needs of both Social Security and Medicare. Unfortunately, the approach taken in recent trustees’ reports moves more towards polarization rather than collaboration.

Social Security is fully funded until 2042 and the program’s overall funding is largely unchanged from last year. Changes in the Medicare projections partly reflect the same horrific cost pressures afflicting all health coverage programs, public and private.

The trustees’ projections for Medicare are proof positive of the need for aggressive action to control health costs—a near consensus position among private purchasers and state/local government jurisdictions. Despite its claims of leadership on cost control, the Bush administration has made matters worse for Medicare by promoting costly privatization and overpayment policies enacted as part of last year’s Medicare prescription drug legislation.

Instead of moving aggressively on the cost containment front, a burgeoning public scandal over withholding vital information from Congress as it wrestled with the Medicare drug bill last fall has enveloped the administration, reaching all the way to White House staff, according to recent press reports.

The administration has provided strong leadership in regard to a cornerstone issue in health care today—the measurement and reporting of performance data by health care providers and organizations. It’s time they clear the air on the cost-withholding scandals and stop the “chicken little” rhetoric about both Social Security and Medicare so we can move on to solving the real problems facing both programs. The administration also needs to face up to the fact that making the Bush tax cuts permanent comes at an enormous cost, exceeding the long-run shortfall in Social Security and Medicare Part A’s fund combined.

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