Medicare Headed for Insolvency in 2019,

The fund that pays hospital benefits to the U.S. elderly is expected to become insolvent in 2019, seven years earlier than predicted, a report on the U.S. Medicare system said on Tuesday.

"The financial outlook for the Medicare Hospital Insurance (HI) Trust Fund that pays hospital benefits has deteriorated significantly from last year, with annual cash flow deficits beginning this year and expected to grow rapidly after 2010 as baby boomers begin to retire," the trustees said in their annual look at the financial health of the programs.

The Social Security trust fund is expected to be exhausted in 2042, as predicted in last year's report.

"Under President Bush, unfortunately, we have lost ten years on the longevity of Medicare," Sen. Dick Durbin, an Illinois Democrat.

The report said Medicare will have to use the fund's interest earnings on special Treasury securities to make ends meet in 2004, well before the 2013 date projected in last year's report. That will place pressure on the government's general revenues at a time when it is already facing record budget deficits.


Data Dispute Bush's 'Rich' Label for Small Business

Data from the Internal Revenue Service and the Census Bureau suggest the vast majority of small businesses provide their owners with incomes far below the $200,000-a-year mark where Kerry says he would begin eliminating tax cuts.

"Taxing the rich?" Bush said during a recent White House forum where his guests included the owners of a hair salon, a convenience store franchise and an office supply dealer.

"When you're running up individual tax rates, you're taxing small businesses," he said.

The only problem is that most companies in the small-business world are so-called Main Street businesses with 10 or fewer employees, including restaurants, small retailers and small manufacturers, Census and IRS data show.

Their profits fall into a median range of $40,000 and $60,000, according to the National Federation of Independent Business, a leading advocate of the small-business community. That puts them just above U.S. median household income of $42,409.

The Washington-based Tax Policy Center says 30 percent of Bush tax-cut benefits will ultimately go to the top 1 percent tax bracket, where annual incomes start at $257,000 and average $1.3 million, based on 2000 figures.

el - Article doesn't have that only 4% of businesses make over $200,000.