JUDY WOODRUFF:Government officials said today the trust fund fueling the nation's Medicare program is in somewhat stronger shape than it was last year. They projected it will stay solvent until 2026, two years later than last year's projections.

At the same time, the budget outlook for the nation's Social Security program remains unchanged. It is projected to stay solvent until funding runs out in 2033.

Meanwhile, a new Federal Reserve study found that, while some Americans are rebounding from the economic recession, others continue to struggle. Among the results: U.S. households have recovered on average only 45 percent of the $16 trillion dollars of wealth lost during the recession. Two-thirds of that regained wealth is tied to rising stock prices, which have disproportionately benefited well-off Americans.

But for middle- and lower-income households, the economic picture is not so bright, due in large part to depressed home prices, still 30 percent below their peak.

To discuss what this means for the nation's economic recovery, we talk to a co-author of that report.

William Emmons is chief economist at the Center for Household Financial Stability at the Federal Reserve Bank of Saint Louis.

Welcome to the NewsHour.

So it's clear, Mr. Emmons, that for many Americans they're doing very well since this recession. But for others, in your report, they're not. Who are those who are still struggling?

WILLIAM EMMONS, Chief Economist, Center for Household Financial Stability, Federal Reserve Bank of Saint Louis: Those that are struggling tend to be younger families, some middle-aged families, in general, also families whose heads have less education, also members of historically disadvantaged minorities, African-Americans and Hispanics.

So those are the demographic features of families that are struggling the most.

JUDY WOODRUFF:Is that the—so there's a bright line you can draw between—it's people at the lower end of the economic scale?

WILLIAMS EMMONS:Actually, the same families that we knew were struggling a bit even before the downturn are still struggling.

JUDY WOODRUFF:Well, let me ask you. There was a national Federal Reserve report, as you know, that came out not long ago ...

WILLIAMS EMMONS: Yes.

JUDY WOODRUFF: ... that said 91 percent of the wealth that had been lost during the recession has since been restored. How does that square with what your findings are?

WILLIAMS EMMONS:That's the starting point, those numbers through the end of last year. The next report will be coming out in early June that will bring us through the end of the first quarter.

Those numbers gave that 91 percent recovery figure. Then we adjusted that for inflation that's occurred since that time, since the peak in 2007, and also adjusted for the number of households. The population has grown. When you make those two adjustments, in fact, you get this lower level. So it's -- that earlier report is absolutely the foundation of what we did. We just adjusted it to put it in terms that I think are probably more realistic for most families. What can their money buy and what does an individual family feel in terms of the share of wealth?

JUDY WOODRUFF:What is known about how many of these families who are still below water, if you will, in terms of not regaining wealth, about how about how many of them were really kind of -- were overextended before the financial crash, had borrowed too much, were borrowing too much off their homes, were just more in debt than they needed to be?

WILLIAMS EMMONS:Absolutely.

More so than in earlier times before downturns, we know from some of the data that we're looking at, that an unusually large number of families, in fact, as you said, had a lot of debt relative to their income, to the value of their assets, also lots of concentration in housing on the asset side of their balance sheets, also, as we know, very low savings rates, and for some families using expensive financial services.

So those are really the key vulnerabilities, what we call “balance sheet failures,” that, as you suggest, were even more common going into this downturn than was usual. And, of course, the downturn then exacerbated those problems.

JUDY WOODRUFF:So to the extent they were overextended, had borrowed too much, could one argue that it's smart, that it's wise for them to be more cautious in what they're spending right now, not to go back into debt?

WILLIAMS EMMONS:Oh, absolutely.

I think it makes perfect sense that people are trying to rebuild their financial strength, rebuild their balance sheets. And that involves in some cases paying down debt or not taking on as much debt as they had in the past. Certainly, people are struggling to reattach to the job market. The job market is weak. Income growth is strong—and also diversifying a little bit beyond housing.

So those are absolutely the things that you would expect people to try to do to respond to this sort of a downturn.

JUDY WOODRUFF:What is it going to take to restore fully the wealth that Americans had before the financial crash? Or is there reason to believe it won't be restored?

WILLIAMS EMMONS:I think there are reasons to think it will take a long time to get back to any semblance of what we had before.

Now, probably in 2005, '6, and '7, that was unrealistic. We had, remember, a housing bubble, so we really don't expect housing values to get back to those levels any time soon. Also, the stock market was very strong. So, in answer to your question, I think it will take years to get back to anything close to what we had, but it could also be that as we look back, that that was an unusual peak level of wealth that wasn't in the end sustainable.

JUDY WOODRUFF: And when you say takes years, meaning years for companies, for employers to hire, years for wages to go up? Is that what you're referring to?

WILLIAMS EMMONS:That's, of course, the raw material. Most people are going to rebuild those balance sheets through the earnings from work and savings, and, of course, some appreciation of asset values.

Stock prices have gone up a lot. House prices maybe will increase a bit more. So that—all of those things combined, as well as managing the debt, so we don't have the buildup of debt we had before.

JUDY WOODRUFF:And, finally, from looking at all that you have looked at, Mr. Emmons, what would you say are the lessons we should learn for the next time we have a financial crisis?

WILLIAMS EMMONS:Well, that's exactly what we're looking at.

And I think—as I said, I think we were overly dependent on housing. People had too much of their wealth invested in housing. We had too much debt relative to our—certainly our income. We even could see that before the downturn. After house prices declined, we can see it was too much debt relative to the value of even the houses.

And just in terms of building savings, building wealth through savings, as you suggest, we really do need a more consistent, higher level of household savings to—to help build in those buffers into stronger balance sheets.

JUDY WOODRUFF:Well, it helps us to understand all of that through your research.

Williams Emmons with the Saint Louis Federal Reserve, thanks very much.

WILLIAMS EMMONS:Thank you very much.