FROM THE OFFICE OF PUBLIC AFFAIRS

Today, the Boards of Trustees of the Medicare and Social Security trust funds met to complete our annual review ofthe financial status of the trust funds and to issue a report oneach of them.

With regards to Medicare, the facts have notchanged since our report last year. Today's report shows againthat one of the Medicare funds, the Hospital Insurance TrustFund, would be exhausted by 2001 without legislation thataddresses its financial imbalance.

In the President's current budget, theAdministration proposes changes in the Medicare program whichwould generate $100 billion of savings over the next five yearsand would extend the solvency of the Hospital Insurance trustfund a number of years into the future.

President Clinton's commitment to Medicare andSocial Security is firm and unwavering. When the ClintonAdministration took office, the HI trust fund was projected tobecome insolvent by 1999. We took action in 1993 to extend itsfunding by three years. It is absolutely vital that we now takethe steps to retain the solvency of this critical program.

At the same time, the Administration alsorecognizes that there are long term issues, arising as a resultof the aging of the population, that must be addressed through abipartisan process. Extending the solvency of the HI trust fundby at least a decade gives us all enough time to address theselong term challenges. We as trustees have recommended thecreation of an advisory group to review these complex issues andhelp fashion solutions.

For the Social Security trust funds the situationis different; they are solvent in the near term but we projectthat they will be exhausted in 32 years. There is no need forimmediate action. But we believe the long-range deficit in theSocial Security funds should be addressed in a timely way toallow workers an opportunity to adjust their retirement planningin response to program changes.

The health of both the Social Security andMedicare trust funds is important for the millions of Americanswho depend on these programs today, and for the millions who willdo so in the generations to come. Preserving and modernizingSocial Security and Medicare is not a partisan issue. TheAdministration and Congress can and should work together to enactthis year the reforms that will strengthen Medicare. They thencan turn on a bipartisan basis to the longer-term challenges ofboth Social Security and Medicare.