Rising Retirement Costs May Cause ‘Fiscal Crisis’
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Federal Reserve Chairman Ben S. Bernanke said the American government may face a “fiscal crisis” in the coming decades if it fails to deal with the rising costs of retirement and medical benefits for the aging population.
“If early and meaningful action is not taken, the U.S. economy could be seriously weakened, with future generations bearing much of the cost,” Mr. Bernanke said yesterday at a Senate Budget Committee hearing.
His comments may help frame a debate leading up to President Bush’s February 5 budget, in which he will unveil a plan to balance the budget by 2012.
Mr. Bernanke, unlike Alan Greenspan, refused to endorse a strategy on taxes and spending. The projected budget shortfall results from spending on the Social Security, Medicare, and Medicaid programs.
