Sobering Medicare News

A summary of a new report from the Center for Retirement Research at Boston College:

"Medicare Costs and Retirement Security"

by Alice H. Munnell

The brief's key findings are:

Medicare spending will soar, rising from 3 percent of GDP today to 8 percent of GDP in 2040.
By 2040, retirees will face:

• a nearly 20 percent increase in income tax rates to cover the government’s Medicare contribution; and
• rising out-of-pocket costs that will eat up more than half of the average Social Security benefit.

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So, why is President Bush so worried about Title II of the Social Security Act?