March 30, 2000
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TREASURY SECRETARY LAWRENCE H. SUMMERS REMARKS AT THE
MEDICARE AND SOCIAL SECURITY TRUSTEES PRESS CONFERENCE

Today the Boards of Trustees of the Medicare and Social Security Trust Funds met to complete our annual review of the financial status of the Trust Funds and to send a report to Congress on each of them.

The financial status of both programs has improved since last year's report. With respect to Medicare, the long-term actuarial gap has been reduced again, and the projected Trust Fund exhaustion date has been pushed back eight years to 2023. The long-term actuarial gap for Social Security also narrowed, and the exhaustion date of the Trust Fund has been pushed back three years to 2037.

The improved financial positions of Social Security and Medicare reflect the ongoing robust expansion of the economy and the continued brightening of the long-term outlook. For Social Security, the improvement also reflects improved methods in producing the estimates. On the Medicare side, efforts to hold down spending growth and strong management of the program have also contributed to the favorable outcome.

Although the financial outlook for both programs has improved, hard work remains to be done to assure their strength for decades to come. Almost all experts agree that the single most important step we can take to prepare for the coming demographic shift is to use the current budget surpluses to increase national saving. In this regard, it is extremely encouraging that a bipartisan consensus has emerged that the Social Security surpluses should be used to pay down the debt held by the public, so that these surpluses correspond to an increase in government and national saving. In addition, the President has called for transferring a portion of the projected on-budget surpluses to Social Security and Medicare, in such a way that debt reduction will make a contribution to extending the solvency of these critical programs. This plan of transfers and debt reduction would enhance the ability of both Trust Funds to pay currently promised benefits and would put us on a trajectory toward eliminating the debt held by the public, on a net basis, by 2013.

The President continues to believe that we ought to work toward putting Social Security on a sound financial footing for the long term, and he would welcome the opportunity to work with the Congress toward achieving that objective. The bipartisan consensus that formed around the elimination of the retirement earnings test shows what can be accomplished when we work together. The estimates in the Report do not reflect this action, but the Trustees do not expect it to have a material impact on the actuarial balance or the exhaustion date. For Medicare, the President has put forward a detailed and comprehensive proposal to modernize the program and add a much needed prescription drug benefit, and he hopes that bipartisan action on Medicare reform will occur soon. It continues to be of critical importance that we strengthen Social Security and Medicare and assure their viability for future generations.

In an era of growing surpluses, the President has made the difficult decision to call for using these surpluses to improve our Nation's fiscal position. Fiscal discipline has contributed enormously to the current economic expansion. We must continue with fiscal discipline and use the benefits to strengthen Social Security and Medicare.

A summary of the 2000 Social Security and Medicare Trust Fund reports is available at: www.ssa.gov/OACT/TRSUM/trsummary.html

The 2000 Social Security Trust Fund report is available at: www.ssa.gov/OACT/TR/TR00/index.html

The 2000 Medicare Trust Fund reports are available at: http://www.cms.hhs.gov/media/press/release.asp?Counter=375