Recession erodes Social Security and Medicare trust funds

The trust funds for both Medicare and Social Security will run out of money earlier than expected because of the recession, the trustees reported today. The Medicare Trust Fund will run out of money by 2017 two years earlier than forecast last year. The Social Security Trust Fund's life has been shortened by four years and is expected to run out by 2037.

Analysts were expecting the bad news because fewer people are paying into both programs. Approximately 5.7 million jobs have been lost since December 2007 reducing payroll tax collections dramatically. In fact in March the Congressional Budget Office projected Social Security's surplus would be just about gone in 2010 with only $3 billion more collected in taxes than benefits paid out.