Trustees of two of the largest government entitlement programs released their annual financial status report Friday.

The assessment anticipates that funding for Medicare and Social Security will run out in the next thirty years or so.

The government report said Medicare's giant trust fund will run dry in 2026 --- two years later than projected last year.

Medicare's improved financial outlook is most likely a result of an overall slowdown in the rate of increase in health care spending, particularly on skilled nursing care, as well as lower projected costs for popular insurance plans available within the program.

Social Security, however, is on track with last year's report to deplete by 2033.

The new report warned that despite the small improvement in Medicare, both it and Social Security face significant funding challenges as the giant baby boom generation continues to retire.

"Under current law, both of these vitally important programs are on unsustainable paths," Robert D. Reischauer, one of two public trustees, told reporters at a news conference.

Washington has been unable to reach consensus on an agreement to strengthen the finances of the America's biggest benefit programs, which together accounted for about 38 percent of federal spending last year.

President Obama and Republican leaders in Congress have held off-and-on talks about various possible fixes for the entitlement programs since 2011.

Republicans insist any budget agreement must include deep spending cuts, while Obama is seeking what he calls a balanced deal that would include not only cuts in government spending, including reductions in entitlement programs, but also higher taxes.

His approach would trim payments to drug companies, hospitals and other service providers.

Earlier this year, House Republicans passed a budget that would eventually turn Medicare into a voucher-like program for people younger than 55; but, Obama and other Democrats reject that approach.

Currently, 58 million Americans receive Social Security benefits.

The number is expected to climb significantly as a growing number of nearly 10,000 baby boomers near retirement.