Recession walloping Social Security and Medicare

The financial health of Social Security and Medicare, the government's two biggest benefit programs, worsened in the past year because of the severe recession.
MAY 12, 2009
The continuing U.S. recession has worsened the financial health of the government's two biggest benefit programs, figures released Tuesday showed. Medicare, the main medical program for the elderly and disabled, will even pay out more in benefits this year than the government collects in taxes for it. The findings released by trustees of Medicare and Social Security, the government's pension system begun during the Great Depression of the 1930s, is a blow to President Barack Obama's plans for a major reconfiguration of the health care delivery system in the country. A major part of his campaign last year was to bring almost universal government-run health care to the United States, one of the few developed countries whose medical systems are based on private medicine. Both Social Security and Medicare are financed through payroll contributions from workers and employers. The findings in the trustees' annual checkup on the programs did not come as a surprise. Private economists had been predicting that the dates the programs would begin to pay out more than they take in and that the dates the trust funds would be insolvent would occur sooner given the economic recession. The deep recession, the worst in decades, has resulted in a loss of 5.7 million jobs since it began in December 2007. The unemployment rate hit a 25-year high of 8.9 percent in April. Fewer people working means less being paid into the trust funds for the benefits programs.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.