WASHINGTON, March 25, 2008
Alarm Sounded On Medicare, Social Security
Payouts For Medicare Projected To Exceed Collections This Year; Social Security Gets 2017 Threshold
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(AP / CBS)
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Interactive 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 310 CommentsPosted 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.
Put congress on an HMO and apply the savings.
Also an 80% tax on congressional pensions.
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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!!!
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..
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.
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.
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.
Posted by mascarponi at 11:38 AM : Mar 26, 2008
Not just Republican. Everything you have written is spot on, but with one small problem--you see this as partisan. They are all in on it. The raping of SS has been going on for over 25 years from the first time that Congress decided it could partake of the surplus for other things (saying they would pay it all back, of course) that was under a Democratic Congress.
If you think in partisan terms, you clear the way for the feeding frenzy to continue-but now among Dems. Which may make the Dems in power feel better, and will let the neo cons point and blame Dems too for all this mess, but will not change the reality of this situation. IN the new paradigm--see the game. It is not one party against the other party. It is the elite against the rest of us--and you make a mistake if you think those elite are really interested in helping you.
Some are--but they usually lack the power or consensus to really help us. A president has little power to move legislation unless the Congress wills it. Individuals have little chance of moving leg. unless there is consensus and the parties will it.
I agree with you and am surprised by your analogy since I have been using the exact same one for the past few years. In Brazil, the economy is split between the very rich and the extremely poor who live in trash heaps and beg every day. The rich live in gated communities and even have armed escorts to take them everywhere. Where you and I might diverge is that I have been observing the raiding by indiv and corps for years and have concluded that in the past 7 years, the shift in Washington has been away from idealism and every man for himself--making sure they pad and get there''s. What this means is Hilary is NOT your friend, neither is McCain and probably not Obama--nor is the Congress. They each are trying to get theirs for the well being of themselves and their families before it all goes kaput. Note how Obama and Hilary became millionaires pulled from near bankruptcy within the past 8 years. See who controls or who they protect. Remember how Hilary recently refused to condemn retro immunity for telecom companies illegally wire tapping us? wonder why she did not?
Americans need to know that for the most part, the present crop of politicians are in it for themselves--oh, they may paint a pretty picture of how they want to help us--but if you dig deeper, you will find the help to each of us is minimal, while the rewards to each of them is huge.
Now we know one of the many reasons why many GOP Congressmen are retiring regardless of whether they are up for reelection: They know the ******* is about to hit the American economic fan in so many ways--and they do not want it known or said they were in charge when it all goes to hell in a hand basket.
We think it is the Iraq war? Uh uh. Somebody has told Bush that the shell game is up and we are about to find out that there never was a ball and we have all been cheated--so he has to pretend just to keep the game going until he leaves office or we will all blame him and the GOP. 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.
b-easy of course you are right about big pharma being in bed with the politicians and current plans to mandate coverage through the for profit industries isn''''t going to address the underlying issues. Still, the insured are paying for the uninsured through higher premiums and taxes. CEOs are getting rich while hospitals close at an alarming rate. We as a nation must decide if we have a moral mandated to care for all of its citizens or if we are willing to let those unfortunate enough to be unable to afford it go off somewhere and die. The current system, as the article alludes to, is in big trouble.
Posted by omega39 at 10:00 AM : Mar 26, 2008
I agree. Something must be done and soon. But the HOW is the big issue. I don''t trust mandates that have no maneuverability or negotiating room and I don''t trust Congress to be good stewards of any programs regarding our health. Besides all the potential spending abuse, experience indicates that many needs will not be covered or abused and there will be no recourse. How far do most people get when they try to sue the government?
b-easy of course you are right about big pharma being in bed with the politicians and current plans to mandate coverage through the for profit industries isn''t going to address the underlying issues. Still, the insured are paying for the uninsured through higher premiums and taxes. CEOs are getting rich while hospitals close at an alarming rate. We as a nation must decide if we have a moral mandated to care for all of its citizens or if we are willing to let those unfortunate enough to be unable to afford it go off somewhere and die. The current system, as the article alludes to, is in big trouble.
Posted by omega39 at 09:17 AM : Mar 26, 2008
and they will still do it under UHC. Know why? Because many of the legislators are in bed with those companies--take a good look at donors even to HRC and Obama. Who are they getting money from? They don''t get money just to be President, they will be fielding and sheparding their interest. I would bet that Hilary is the darling right now of the Health care and Big Pharm industry--because with her UHC that is supposedly for all our goods, she can deliver a captive consumer base and all the graft and stealing that comes with massive government spending accounts--enough at least for her and them to become amazingly rich before the country realizes they really must cap the industries. Note she is not talking about caps right now--she is just talking about a magic system where everyone is covered and it is paid for by mandate--from your pockets. Very few people see the really big picture, they are too consumed and overwhelmed by their small part--but the big picture could herald the collapse of ANY system in this country. We are not Europe or Canada, imposing a system by force on top of an already strapped economy could be the recipe for a revolt of almost an entire nation.
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