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Fewer Immigrants Reduce Federal Revenue

May 16, 2011
Plain English Version

The federal government said the Medicare trust fund is lower than expected. Medicare will be out of money in 2024. This is five years earlier than projected last year. The government said the reason is payroll tax revenues were lower because of the weak economy.

The gap between funds for Social Security and its cost is growing. The reason is people are living longer.

The report said the number of immigrants is also lower. This affects the funds because immigrants are younger. Taxes paid by immigrants help pay for Social Security benefits for retirees.

Democrats and Republicans are using this information to support their arguments for reform of the programs. Democrats say the new health care law will lower the cost of Medicare. Republicans say their voucher plan will reduce Medicare spending.

The New York Times


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