WASHINGTON, March 25 (UPI) -- The Social Security program is "financially unsustainable" and needs to be reformed, U.S. Treasury Secretary Henry Paulson said Tuesday.
The Social Security and Medicare Boards of Trustees, of which Paulson is a member, offered its annual financial reviews of the programs Tuesday.
"This year's Social Security Report again demonstrates that the Social Security program is financially unsustainable and requires reform," Paulson said in a statement. "In fewer than 10 years, cash flows are projected to turn negative."
The report indicated the projected point at which the Trust Funds will be exhausted would be in 2041, the same the estimate in last year's report, the Social Security Administration said in a statement.
The sooner action is taken to shore up Social Security's financial footing, "the less drastic the needed reforms will be," Paulson said.
The Medicare report indicated the Medicare program poses a greater financial challenge than Social Security. Besides the same demographic trends, Medicare must face expected increases in healthcare costs, the report said.
"If we do not take action soon to reform Social Security and Medicare, the coming demographic bulge will jeopardize the ability of these programs to support people who depend on them," Paulson said.
