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 significantly, and the year in which the Trust Fund is projected to be exhausted has been pushed back seven years to 2015. With respect to Social Security, there was some improvement in the long-term actuarial gap and a two-year postponement of the projected exhaustion date to 2034.

Much of the progress in strengthening the Trust Funds comes as a result of our current strong economic conditions, what many consider to be the best in recent memory. Many factors contributed to these conditions, including absolutely critically, the President's economic strategy of restoring fiscal responsibility, leadership on international economic issues including open markets here and abroad and investing in our people.

Notwithstanding the improvement in the financial outlook of both programs shown in this years reports, hard work remains to be done to put them on a sound footing for the long term. The President has proposed that we use the bulk of the projected unified surpluses over the next 15 years to very substantially pay down the publicly held debt of the Federal Government. The President has further proposed that we enhance both Trust Funds' ability to pay currently promised benefits under these programs. With respect to Social Security, the President also proposes that we diversify the portfolio of securities held by the Trust Fund to include private equities. Finally, the President proposes that we finish the job of putting the Social Security system in 75-year balance by engaging in a bipartisan process to make the tough, but achievable, required choices. Today's report will make those choices slightly easier, but no less necessary.

With respect to Medicare, the President has committed to release a plan to reform Medicare. When President Clinton took office, the Hospital Insurance Trust Fund was projected to be exhausted in 1999. Now, the Trust Fund is projected to be solvent until 2015. But we should take the further steps necessary to extend the solvency of this program and to modernize it for the 21st century.

This remarkable transformation, from an era of large budget deficits to budget surpluses now, and projected for a long time to come, has created an historic opportunity to promote fiscal discipline, increase national savings, and strengthen the financial position of the Social Security and Medicare programs.