Alarm Sounded On Medicare, Social Security

Payouts For Medicare Projected To Exceed Collections This Year; Social Security Gets 2017 Threshold

(AP)  Trustees for the government's two biggest benefit programs warned Tuesday that Social Security, the U.S. state pension system, and Medicare are facing "enormous challenges," with the threat to Medicare's solvency far more severe.

The trustees, issuing a once-a-year analysis of the government's two biggest benefit programs, said the resources in the Social Security trust fund will be depleted by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped out by 2019.

Both those dates were the same as in last year's report. But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes. For Medicare, the federal health care insurance program for people aged 65 and over, that threshold is projected to be reached this year and for Social Security it is projected to occur in 2017.

The first year that payments will exceed income for Social Security will occur in 2017, just nine years from now, reflecting growing demands from the retirement of 78 million baby boomers. Medicare is projected to pay out more than it receives in income starting this year.

"The financial difficulties facing Social Security and Medicare pose enormous challenges," the trustees said in their report. "The sooner these challenges are addressed, the more varied and less disruptive their solutions can be."

Treasury Secretary Henry Paulson, one of the trustees, warned that the U.S. was facing a fiscal train wreck unless something is done.

"Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America's future prosperity," Paulson said in releasing the new report. "Our nation needs a bipartisan effort to strengthen both programs for future retirees."

President George W. Bush, who wanted to make overhauling Social Security his top domestic priority in his second term, tapped Paulson to lead that effort. However, Paulson has been unable to forge a consensus with Democrats, who took control of Congress in 2006.

Democrats contend that Bush lost valuable time after his 2004 re-election pushing a plan to allow younger workers to direct their payroll tax contributions into private accounts, an idea that went nowhere in Congress.

While the Social Security trust fund will have resources until 2041, the more critical date in terms of government revenues will occur in 2017. That is the date that Social Security will have to pay out more in benefits than it collects in payroll taxes. At present, Social Security is running large surpluses that are going to fund the rest of government.

However, in 2017, the situation will be reversed and the government will have to start filling the gap between what Social Security will be collecting in payroll taxes and what it must pay out. Technically, it will do that by redeeming the non-marketable Treasury securities that are held in the trust fund. However, those bonds are simply government IOUs.

To get the money to pay the benefits, the government will have to borrow or close the gap in other ways such as cutting benefits or raising taxes.

[jon2012-2009]

The Dems are being set up--I said this in 2006 I am saying it now and McCain, Obama and Clinton are fighting over the right to see who will get to sail the Titanic on her maiden voyage. Little do they know the iceberg scenario is already discerned and more savvy political criminals are bailing out--cuz they already know there are not enough life boats.
Posted by b-easy63 at 11:37 AM : Mar 26, 2008

I get the same sense of doom just from our slipping economic numbers--the weak dollar, fiscal deficits and national debt, U.S.-made automobiles with poor mileage economy losing market share, costly but inefficient health care system, oil prices taking off in orbit which will continue to drain our wealth since we import most of it. In the end, our declining competitive advantage will sap our military and technological supremacy, too. This even without the religious fundamentalists putting to waste a third of our intellectual capacity.

The looming crises in Social Security and Medicare are just two landmarks along a course that will reduce us into third-world status. Catastrophic for us but still not in the same league as the accelerating global warming.

Give our leaders some credit. I''m sure they are aware, both sides of the aisle. Whether they can stave off what seems our greatest challenge is another matter.

[payasyougo]

Thoughts on workable solutions to the ss and medicare shortfalls...

Put congress on an HMO and apply the savings.
Also an 80% tax on congressional pensions.

[bozworth4]

bozworth4 why dont you kiss these older people''''s *** you sorry peice of shi! you. it would be ok for you or your kids on drugs to get help.


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Posted by aheadace at 11:10 PM : Mar 25, 2008

You don''t know me or my kids. But you must be very simple to have to resort to names. You completly missed the point. And quite frankly if from my comments you couldn''t glean the information that Dr. and Med. dist. as well as care providers are raping the system for the most part, then I feel sorry for you. The 85 year old refered to went thru all this pain and suffering only to find out she was in no better shape. In fact system was weakened a whole lot. We feel these procedures were only done to bill medicare. not for the benefit of the patient. While I''m at it I do appreciate your response. And yes even sh** has a value for fertilizer. But thanks!!!

[forthepeopl1]

Fielding questions after his speech, Paulson said that "innovation always precedes regulation in our economy" and suggested that oversight needed to catch up. OK PAULSON MY INNVATION IS TO BURN DOWN MY HOUSE,INSTEAD OF GIVEN IT TO THE SCUM BAGS THAT LIED ABOUT THE VALUE..

Once again Paulson defended the government''''s role in coming to the aid of Bear Stearns - which has been criticized by some Democrats and others as akin to a federal bailout.

AND 100 MILLION AMERICANS ARE FACEING BANKRUPY, SO WERE IS MY BAILOUT..AND WE DIDN''''T LIE ABOUT THE VALUE OF OUR HOMES..THEY DID,


"Bear Stearns found itself facing bankruptcy,"
Paulson said. "The Federal Reserve acted promptly to resolve the Bear Stearns situation and avoid a disorderly wind-down. It is the job of regulators to come together to address times such as this; and we did so. Our focus was the stability and orderliness of our financial markets."

Paulson said the administration will explore ways to help struggling homeowners at risk of losing their homes. But he was cool to some of the proposals put forth by Democrats on Capitol Hill, saying that "most are not yet ready for the starting gate."

In addition, he rejected the need for a "systemwide solution" to deal with homeowners who have no equity in their home. That''''s when one''''s mortgage eclipses the value of their home.

Fed Chairman Ben Bernanke recently urged lenders loans.SAYING 30 OR 40 OR EVEN 50 PERCENT REFI IS BETTER THAN A BURN DOWN HOME..

[b-easy63]

Going for a long walk. Will be back to post in a few hours. (Yes---I NEED to walk my frustrations on these issues off)

[b-easy63]

Other countries severely limit who can come in and how they can operate and how much of the local pop must be put to work and how many foreigners can make up that companies work force to get tax incentives. WE don''t do this. What really angers me, is that I can see some of the game, and suspect a lot more, but the actions of them all, from what HIllary will or will not address or how, to what McCain tries to appease to the idealism of Barack--I see we are not the priority. I believe Barack thinks we are and wants to believe he can change things--but a President does not move legislation and therefore does not control the spending or the how--and if one does not have the leverage inside the party or Congress--nothing changes (see Carter) We really need to clean house. But most of us are so party trained, we can''t. WE can see the wrong in the other guy''s choices, but not in our own (or we excuse it) the machine cannot be dismantled if it is left in place--and changing a cog--does NOT change a machine. Meaning a new CIC does not change much of anything. Neither does changing a few Congressmen or even one party. I personally think for good or ill--they ALL should go. But who could replace them and how deep does the rabbit hole go?

[b-easy63]

Posted by mascarponi at 12:03 PM : Mar 26, 2008


I have long said that Bush, Cheney, Rice et al should be turned over to the Hague or even to Iraq for war crimes. I doubt it will happen. It is not in the best interest of the game for either side and the game is worth more to them than justice. The clock is winding down. This is why what we as the public wants is being ignored or only humored. Democrats should have stood firm against Bush''s vetos of Defense budgets--but they did not--because a larger game than what we want is in play. Instead of cheering NAFTA, Dems and others should have been arguing for country protections for workers like they have in Europe which penalizes companies for leaving and charges so much duty upon re entry that local markets remain the cheapest. But we did not.

[b-easy63]

A government should take care of the fundamental needs of all its people AND plan for a fruitful future. American jobs should never have been for sale, nor should companies have pimped out our technology and resources. Greed did that--and the greed has not changed. 3 Trillion lost to a stupid war? 3 Trillion still lost to petty projects here. The dumbest and least productive thing we do as a country is fail to take ALL the country into consideration and still let states operate, spend and siphon money off as little fiefdoms.

Notice how NO candidate is talking about doing more than spending. Mortgage freezes? Money to help? Rebates? UHC? The money has to come from somewhere--TAXES. But taxes rely on jobs--many of which are not here anymore due to NAFTA, CAFTA, and the global market. Markets without limits and restrictions is as deadly as communism--because it leaves a society vulnerable to vagaries not even in their homeland. NO country besides the US allows selling and trading without protections for their own markets. We allow a free for all--because we are greedy--but short term gains=long term suffering. Our chickens are coming home to roost.

[b-easy63]

3 TRILLION DOLARS WASTED IN IRAQ.

Posted by mascarponi at 11:28 AM : Mar 26, 2008


The war was and is illegal and immoral--the money not withstanding. But there is a bigger picture. Even without the war, there is a good chance that much of that money would still have been spent and it would not have been on UHC or other social issues. Our government is a morass and money that is there is often siphoned off, stolen, etc in a hundred ways that we never knew or condoned. UHC was blocked when Hillary proposed it, NOT by the GOP which was not in charge at that time but by the Dems in charge.Why? There are many postulations, but the party faithful are rarely told the truth--Hillary''s plan was not feasible due to the budget and the ways they already wanted to spend the money. But that all changed when the GOP came in, they slashed the budgets and saved the tax money raised by Bush SR and Clinton wisely did not veto the cuts or spend the surplus. But it was a drop in the bucket.The spending machine has gone on too long.

[b-easy63]

When you hear about carrots for the little guy---follow the incentives. For instance, when they offer us more incentives for ins (like Dodd did) see whose money is tied to his--the industries he was trying to protect while pretending to protect us. This is about jockeying for advantage, and in this game--the American public and our sentiments are just another horse in the race.