ABSTRACT
This chapter explains the formation of Social Security and Medicare as key social welfare programs initiated by the US government. It discusses the serious financing challenges facing Social Security and Medicare. The chapter describes the various proposals designed to address the future funding shortfalls in both Social Security and Medicare. Like Social Security, Medicare started with modest outlays of federal dollars but has mushroomed to the point where it too is in financial difficulty. The threat from Social Security and Medicare is not just financial, it is generational. In some respects, the challenge of Social Security is at present more manageable and less threatening then Medicare. The problems and challenges of dealing with the fiscal woes of Social Security and Medicare are currently not creating intense debate, partisan differences, and social divisions; they are only distant concerns that will be addressed in another decade.
