The burdens placed on the Social Security and health care systems in the U.S. by an aging population will require congressional action to ensure the programs’ solvency, witnesses told the House Ways and Means Committee Thursday.[@@]
The U.S. population is undergoing a dramatic demographic shift as the baby boom generation enters retirement age, they said.
“These shifting demographics define the challenges families and policymakers alike must tackle,” said Walter Welsh, chairman of Americans for Secure Retirement, a coalition of insurance industry groups and organizations representing women, Hispanics, farmers and small businesses.
The life expectancy for a 65-year-old is close to 83, and more than half of all retirees are now expected to live beyond the average life expectancy, he said.
The likelihood of living longer compounds both the savings and financial management challenge for individuals and families: Retirees not only need to save more; they also need to manage resources effectively so they can sustain a steady standard of living for 20 to 30 or more years, Mr. Welsh said.
Douglas Holtz-Eakin, director of the Congressional Budget Office, argued that some action must be taken because the economy itself will be unable to adjust to the shift.
“It is very unlikely that productivity growth could by itself solve the projected budgetary shortfalls,” he said.