Boomers will leave a legacy of debt

By SEAN MUSSENDEN
Media General News Service
WASHINGTON -- As if we haven't spent quite enough time obsessing over all things baby boomer, now comes Jan. 1, 2006. Today, the oldest sliver of the "me" generation turns 60, a milestone that will spark endless reflection on the boomers' legacy.
Revolutionized corporate America. Transformed Hollywood. Changing Washington.
Enough already.
When I think of boomers, pretty much the only thing I reflect on is my wallet. As in: how quickly the boomers will drain it dry.
Long-term impact
The boomers are getting dangerously close to retirement age. They will begin drawing on Social Security in a few years. In a little more than a decade, there won't be enough members of my generation -- I'm smack between X and Y -- paying into the system to support all the retired boomers taking money out. Future generations are looking at higher taxes or smaller benefits than promised.
By now, this problem should be obvious to everyone. President Bush visited 29 states last year to sound the alarm about Social Security's problems. And still his campaign to introduce private accounts to the system failed miserably.
His critics accused him of overdramatizing the impact of the baby-boomer retirement wave, calling it a scare tactic to sell private accounts.
His critics were wrong. Bush actually undersold the burden retired boomers will place on younger generations.
That's because he didn't make Medicare's problems a serious part of the conversation.
Haven't heard much about Medicare's rapidly approaching financial woes? That's because few in Washington are talking about it.
The reality is that the boomer retirement wave will cause just as many problems for the massive senior health program as it will for Social Security, and for basically the same reasons. In both cases, seniors will milk out money faster than younger workers can replenish it.
Medicare's challenges
Medicare, though, has special challenges. Rising health care costs and an expensive new prescription drug benefit will make Medicare even harder to pay for in the future. Despite Bush's focus on Social Security, bureaucrats familiar with both programs say Medicare's problems deserve the most attention.
"We're going to have to restructure Social Security and Medicare. And, frankly, Social Security will be a lot easier than Medicare," David Walker, head of the Government Accountability Office, Congress' investigative arm, said at a presidential forum on aging issues last month. "If there's one thing that could bankrupt America, it's health care. And it's out of control."
In their most recent annual report on the health of Social Security and Medicare, the trustees that oversee both programs had this to say: "Medicare's financial outlook has deteriorated dramatically over the past five years and is now much worse than Social Security's."
In 2017, Social Security will start paying out every year more than it takes in, and by 2041, boomers will drain all the money from the "trust fund" surplus the program has built up.
Sounds bad, right? Medicare is worse. The cornerstone of the program, Medicare Part A, which covers hospital stays, already pays out more than it takes in. And its trust fund surplus likely will be exhausted by 2020 -- two decades before Social Security's trust fund runs dry.
Quick solutions unlikely
Unless these problems are addressed -- and the sooner the better -- the greatest boomer legacy will be the mountain of debt they leave to their kids and grandkids. (Thanks, Mom!)
Unfortunately, the prospect of a fix for either program seems unlikely anytime soon.
Seniors love Social Security and Medicare and get very nervous when politicians talk about change. Bush's poll numbers went into the toilet shortly after he tried to tinker with Social Security.
He hasn't talked seriously about Social Security in months, and key Republican lawmakers now suggest that any Social Security fix will have to wait until at least 2009 -- after Bush is gone. There's no urgency for a Medicare fix either.
Fantastic. I didn't really want to retire anyway. Working until I'm 94 sounds just peachy. And, really, what are the odds that I'll get sick in my later years? Pretty slim, I'm sure.
X Sean Mussenden is a national correspondent in Media General's Washington Bureau. Distributed by Scripps Howard News Service.