Federal Reserve Chairman Ben S. Bernanke issued a new warning Monday about aging and health care costs.
"'An improving economy should reduce near-term deficits, but our public finances are, nevertheless, on an unsustainable path in the longer term, reflecting in large part our aging population and the continual rise in health-care costs,' Bernanke said in a half-hour speech" at a meeting of the Rhode Island Expenditure Council, The Providence Journal reports. He added that states face similar challenges: "...'the retirement of state employees, together with continuing increases in health-care costs, will cause public pension and retiree health-care obligations to become increasingly difficult to meet,' Bernanke said. Estimates of unfunded pension liabilities for the states as a whole run as high as $2 trillion at the end of 2009, he said" (Downing, 10/5).
Dow Jones Newswire/The Wall Street Journal: "Bernanke pointed to congressional projections that the ratio of federal spending for health-care programs--mainly Medicare and Medicaid--to national income will double over the next 25 years. Meantime, the aging of the U.S. population will also strain Social Security, as the number of workers paying taxes into the system rises more slowly than the number of people receiving benefits" (Di Leo, 10/4).
The Associated Press: "The options for slicing the deficit — cutting spending on popular entitlement programs like Social Security and Medicare and raising taxes — will be difficult for the White House and Congress to sell to the American public. Bernanke steered clear of making recommendations on the best way to reduce the deficits, saying those tough decisions are best left to the nation's elected officials" (Aversa, 10/4).