Alarm Sounded On Medicare, Social Security
Payouts For Medicare Projected To Exceed Collections This Year; Social Security Gets 2017 Threshold
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Social Security
How it works, the shortfall and Bush's proposal, and facts on recipients.
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.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.



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See all 311 Commentsi could use that money instead on something else,
can we sue for Fraud?
hey henry ... just have the fed guarantee the payments like you had them do for your investment bank buddies.
Posted by arthurcl1
The Congress has been stealing Social Security forever. How is that Bush''s fault? You are mentally bankrupt, I do hope you know that.
Posted by FloydZepp
Our budget accounts for military spending. The fact that the Carton Clintoons like the Carton Carter didn''t set aside money for the military doesn''t mean it shouldn''t be part of the budget. National Defense is part of the budget and the military is part of that defense Zippo.
Posted by rudy654 at 02
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Silly Rudy - the answer is plain. We are spending over $12 Billion per month in Iraq and all of it is borrowed from social security and aboard. Did you not know that??
[Posted by au_fait at 02:34 PM : Mar 25, 2008]
checks and balances ... where are they at?
democrats not doing their job ... what job might that be?
whole political system needs to be overhauled? agreed ... but it wont happen until a major event occurs ... and no event having occured to date is apparently major enough.
See that''s why the Dimnowits don''t advance. They have a warped sense of thinking. Bush has warned about the Social Security problem and offered one way to handle it. Dimnowits like you want the Government to secure the very thing they keeping diping into. Who''s got a mental problem?
[Posted by mudrose at 02:41 PM : Mar 25, 2008]
this is a fact? clinton and carter never had defense spending in any of their budgets?
Posted by zoe2006
____________________________
You are badly misinformed my friend. The IRS and Social Security Administration have both confirmedthat illegals have contributed over $300 Billion over the years to Social Security (an unknown larger amount in withholding taxes). And they have not and cannot benefit from these taxes. Without their contributions, the SSA fund and medicare would have been bankrupted years ago instead of in about 6 years. Please do some research before posting.
Posted by au_fait
Does that include bailing out Bear Stearns? Talk about handouts.
Posted by lisamh4 at 02:41 PM : Mar 25, 2008
Please provide an article, document, a reference, a link that verifies your declaration that "Karl Rove and GWB talk about wanting to get rid of Social Security and Medicare." I haven''t ever seen or heard that before. I would like to look into that assertion.
[Posted by au_fait at 02:34 PM : Mar 25, 2008]
checks and balances ... where are they at?
democrats not doing their job ... what job might that be?
whole political system needs to be overhauled? agreed ... but it wont happen until a major event occurs ... and no event having occured to date is apparently major enough.
Posted by bobnjersey
The Dimnowits won''t even protect the country. Still no FISA bill. Do they care about a major event. Absolutely not. They don''t care. They don''t care about the people only about who controls the power. That''s why the Dimnowits want socialism. And the Dimnowits are stupid enough to give it to them. Then when they government takes everything out of them, they will still whine for more.
[Posted by mudrose at 02:46 PM : Mar 25, 2008]
wasn''t the bill vetoed? why, i think it was?
they just didn''t want to protect the corporations doing the bidding for the anti-constitutional president.
Posted by mudrose at 02:30 PM : Mar 25, 2008
And I suppose that you would have the doctors, and Hospitals keep that Exclusive right?
No Insurance,, or not the right kind of insurance, or little money saved, that pretty much excludes a lot of people from recieving health care in this country.
Yup ,, thats a great Medical system,, alright!!
Posted by Nancy_Naive at 02:46 PM : Mar 25, 2008"
This has NOTHING to do with the war in Iraq. It has EVERYTHING to do with the fact that more people will be getting SS as baby boomers get old. Clinton had acknowledged this as an emergent issue too.
Take the Bush goggles off.
What was Skippy''s "policy" regarding returning Social Security and Medicare to solvency? Personal investment accounts run by corporations with the same mind-set of the greedy bankers who profited handsomely in the sub-prime mortgage debacle. Yes those very same "compassionate conservatives" who hate "big government" (except when it spies on citizens) want to simply remove the responsibility from the government, turn it over to the private sector where the vultures will pick the bones clean, then shrug at the resulting catastrophe and mumble some empty bromides about "market economics".
This isn''t a problem Bush started...nor is it one he''ll make any headway at finishing. Instead, he''ll squawk about Democrats not being democratic by rubber-stamping any hair-brained idea he comes up with to transfer yet more wealth to the wealthy. How typical.
[Posted by Questionnews at 02:46 PM : Mar 25, 2008]
it''s called ''starve the beast''.
http://en.wikipedia.org/wiki/Starve-the-beast
want it to crash
simple as that
If these jobs were given to Americans, I bet they''d be paid better wages, which would then be taxed at a higher rate, which would then put more money into SS. Now about the government "borrowing" SS money to fund itself...that''s what has to stop!
you are right on,
we have to subsidise business'' and the wealthy with tax breaks and write offs
they should pay the full percent that we pay and subsidize the health care system and social security
swinish capitalism
[Posted by Questionnews at 02:46 PM : Mar 25, 2008]
it''''s called ''''starve the beast''''.
http://en.wikipedia.org/wiki
/Starve-the-beast
Posted by bobnjersey at 02:55 PM : Mar 25, 2008
Thanks for the reference bobnjersey. Both sides on these boards throw out so much craap and I occasionally have to see where it came from.
Posted by arthurcl1
The Congress has been stealing Social Security forever. How is that Bush''''s fault? You are mentally bankrupt, I do hope you know that.
________________________________________
Posted by mudrose at 02:39 PM : Mar 25, 2008
When you make a promise to the American people not to use the surplus and in less than a year, break it, then you are part of the problem (see below):
Bush Pledges Not to Touch Social Security Surplus: "We''re going to keep the promise of Social Security and keep the government from raiding the Social Security surplus." [Bush, 3/3/01]
Bush Spends Social Security Surplus: The New York Times reported that "the president''s new budget uses Social Security surpluses to pay for other programs every year through 2013, ultimately diverting more than $1.4 trillion in Social Security funds to other purposes." [The New York Times, 2/6/02]
If you notice, this promise was made and broken while Republicans held a majority in Congress and the Senate, as well as the Presidency.
It looks like mental bankruptcy is a hallmark of the Republicans platform.
To those who don''t pay their own way, I say appeal to charities. If you''re still out of luck, who''s fault is that? Not mine.
Posted by habu99 at 02:53 PM : Mar 25, 2008
*** are you talking about? You''re blaming Bush because Democrats & Republicans don''t get along?? ROFLMAO!!!!
BTW--Clinton wanted to invest the entire SS fund in the market.
From 1998:
"During congressional election campaigns this fall, Republican leaders and Clinton pledged to tackle the problem next year. But the options for refinancing Social Security are limited, and any change to the government''s biggest benefit program is likely to be unpopular.
Interest groups already are mounting aggressive lobbying and grass-roots campaigns.
The biggest gulf is over the idea of setting up a system of personal accounts so that workers could invest some of their Social Security contributions in the stock market: Business and conservative groups favor it, while labor unions and civil rights groups are opposed.
Because of the political dangers, some Republican leaders say action on Social Security will be stalled until the president sends legislation to Congress.
"We would not touch Social Security until we could reach a consensus on reform. Instead, personal retirement accounts would be an interim step while we consider the choices we face," said Sen. Bill Roth, R- Delaware, chairman of the Senate Finance Committee. "
You people are hilarious.....
Unfortunately, this is what will be required. We need a candidate with enough guts to lay out the problem to the American people and then tell them the sacrifices that will be NECESSARY to fix it.
The problem is so enormous that if we eliminated the military completely, eliminated spending on education completly, and drastically reduced social programs we still might not be able to fix this problem.
The survival of our nation is at stake.
It is estimated that if immediate changes are not made to stop increases on the national debt, that by 2040 EVERY PENNY THE GOVERNMENT RECEIVES IN TAXES will be necessary just to pay the interest on that debt.
Please Google "David Walker" of the GAO for the 411 on this subject
[Posted by infe5 at 03:03 PM : Mar 25, 2008]
are you familiar w/ the concept of a society?
[Posted by easeup at 03:06 PM : Mar 25, 2008]
the entire fund?
[from your post]
"The biggest gulf is over the idea of setting up a system of personal accounts so that workers could invest some of their Social Security contributions in the stock market: Business and conservative groups favor it, while labor unions and civil rights groups are opposed."
Tax me for roads and national defense. I''m tired of getting taxed for other''s handouts. If that makes me not compassionate, I could care less.
The Dimnowits won''''t even protect the country. Still no FISA bill. Do they care about a major event. Absolutely not. They don''''t care. They don''''t care about the people only about who controls the power. That''''s why the Dimnowits want socialism. And the Dimnowits are stupid enough to give it to them. Then when they government takes everything out of them, they will still whine for more.
Posted by mudrose at 02:46 PM : Mar 25, 2008
Say, Doofus Jr., Didn''t your Momma teach you better than to lie ALL the time? Your moronic postings are the rantings of a bushie dead-ender. Here''s a quote from YOUR DECIDER. ''IN TERMS OF TIMETABLES,AS QUICKLY AS POSSIBLE-WHATEVER THAT MEANS. NO, I AM GOING TO-ONE OF THE THINGS THAT I THINK IS VERY IMPORTANT FOR PEOPLE TO UNDERSTAND IS THAT I BELIEVE THAT WE HAVE A DUTY TO WORK ON BIG PROBLEMS IN WASHINGTON, D.C., AND SO I''M GOING TO CONTINUE WORKING ON THIS. AND IT''S, I GUESS-I''M NOT GOING TO GO AWAY ON THE ISSUE, BECAUSE THE ISSUE IS NOT GOING TO GO AWAY''... March 2005 Washington, D.C. This is the fool you support and so you have NO credibility what-so-ever. Why do you think anyone else cares what you babble on about? Only 301 days left! Enjoy! Ha!Ha!Ha!Ha!
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