On May 12, 2009, the Social Security and Medicare Boards of Trustees released their annual assessment of the financial condition of the Social Security and Medicare trust funds. According to the report, Medicare’s Hospital Insurance (HI) Trust Fund is expected to pay out more in benefits and other expenditures this year than it receives in taxes and other dedicated revenues. HI reserves are expected to be exhausted in 2017, two years earlier than projected last year. For the third consecutive year, a “Medicare funding warning” is being triggered, signaling that non-dedicated sources of revenues (primarily general revenues) will soon account for more than 45% of Medicare’s outlays. Federal law requires the President to submit a plan in response to this warning. Balancing the HI Trust Fund over the next 75 years would require changes equal to an immediate 134% increase in the payroll tax or an immediate 53% cut in program outlays, or combination of the two, with larger changes needed to make the program solvent beyond 75 years. Part B of the Supplementary Medical Insurance Trust Fund and Part D are both projected to remain adequately financed indefinitely, but rising costs will result in rapidly growing general revenue financing needs (rising from 1.3% of gross domestic product in 2008 to about 4.7% in 2083) and substantial increases in beneficiary premiums.