Vargas revived misinformation commonly reported in 2005 that Social Security will "run out of money" in early 2040sMay 3, 2006 5:49 PM EDT ››› RAPHAEL SCHWEBER-KOREN
Reporting on the recent 2006 reports on the financial status of Social Security and Medicare during the May 1 broadcast of ABC's World News Tonight, anchor Elizabeth Vargas -- repeating a false characterization by the Bush administration that has been repeatedly debunked -- described the revised estimates for when the two programs' respective trust funds will become depleted as "the day when the Social Security and Medicare programs run out of money." In fact, Vargas' description -- which echoed false statements President Bush made repeatedly throughout his 2005 campaign to add private accounts to Social Security, including in his 2005 State of the Union address -- is false. As Media Matters for America has noted with respect to Social Security (here, here, here, here, and here), and as the new reports that Vargas was referring to reiterated, neither program would "run out of money" when its trust fund became depleted.
According to the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance (OASDI) Trust Funds' (commonly known as the Social Security trustees) annual report for 2006, "Even if a trust fund's assets are exhausted, however, tax income will continue to flow into the fund. Present tax rates would be sufficient to pay 74 percent of scheduled benefits after trust fund exhaustion in 2040 and 70 percent of scheduled benefits in 2080."
Similarly, the 2006 annual report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds estimated that the Medicare Hospital Insurance (HI) program's trust fund will be depleted in 2018. At that time, "taxes would cover 80 percent of estimated costs ... and only 29 percent at the end of the long-range period ." The HI program -- otherwise known as Medicare Part A -- "helps pay for hospital, home health, skilled nursing facility, and hospice care for the aged and disabled," according to the report.
The Medicare trustees' report also stated that the Medicare Supplemental Medicare Insurance (SMI) program's trust fund "[is] adequately financed under current law." SMI "helps pay for physician, outpatient hospital, home health, and other services for the aged and disabled who have voluntarily enrolled."
From the May 1 broadcast of ABC's World News Tonight:
VARGAS: Another government report calculates that the day when the Social Security and Medicare programs run out of money is growing closer. The Medicare trust fund is now expected to give out more than it collects in taxes in 2018. Two years sooner than projected last year. That's just 12 years from now. And the Social Security trust fund is expected to run out in 2040, one year sooner than projected last year.