Social Security heading for insolvency even faster

[Omaha Steve]

Source: AP-Excite

By STEPHEN OHLEMACHER and RICARDO ALONSO-ZALDIVAR

WASHINGTON (AP) - Social Security is rushing even faster toward insolvency, driven by retiring baby boomers, a weak economy and politicians' reluctance to take painful action to fix the huge retirement and disability program.

The trust funds that support Social Security will run dry in 2033 - three years earlier than previously projected - the government said Monday.

There was no change in the year that Medicare's hospital insurance fund is projected to run out of money. It's still 2024. The program's trustees, however, said the pace of Medicare spending continues to accelerate. Congress enacted a 2 percent cut for Medicare last year, and that is the main reason the trust fund exhaustion date did not advance.

The trustees who oversee both programs say high energy prices are suppressing workers' wages, a trend they see continuing. They also expect people to work fewer hours than previously projected, even after the economy recovers. Both trends would lead to lower payroll tax receipts, which support both programs.

Read more: http://apnews.excite.com/article/20120423/D9UASMEO2.html

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Treasury Secretary Timothy Geithner listens during a news conference on the Social Security and Medicare Trustees Reports, Monday, April 23, 2012, at the Treasury Department in Washington. Trustees update forecasts for the government's two largest benefit programs, which are laboring under the weight of retiring baby boomers, revenue shortages and politicians' reluctance to take painful action to fix them. (AP Photo/Susan Walsh)

[orpupilofnature57]

1. Does he look very attentive? or waiting for a

Flight?

[onethatcares]

2. is it going to affect him?

for some reason, I think not.

[lib2DaBone]

3. Billions for Foreign Aid... Billions for War...Billions for China....

So sorry.. no money left for America.....

[TheWraith]

5. You know how little money we spend on foreign aid?

Less than one percent of the federal budget.

[maddiemom]

38. What we spend on unnecessary wars, however...

[Chemical Bill]

51. Much foreign aid is hidden in the military budget. n/t

[cstanleytech]

12. Its not so much as whats spent as whats not coming in.

They were dumb as nails in lowering the taxes the way they did because there was no stick so as to make the wealthy and the corporations to actually spend money to hire people, in fact they have been doing the opposite not to mention all the loopholes in place for said corporations and wealthy in place that they exploit.
In the end its no wonder the whole country is going to pot.

[TheWraith]

4. Don't take these projections too seriously.

It's like trying to predict the weather next August. There's far too many variables, which vary too quickly, to really make an accurate projection. Economic upturns push more money to the SSTF, downturns mean less, and there's room for a LOT of those over the next 20 years.

[customerserviceguy]

19. While it's folly to predict anything longer than ten years away

You can still look at the direction that we're going. Every year that passes, we're three years closer to seeing Social Security going broke, and that's assuming there is a political will to pay off the IOU's.

While there is nothing I would like to see more than an economic upturn, I'm afraid that at best all I can see is a muted recovery, where people who are trying to get back to work have to take lower paying jobs. This will put downwards pressure on all wages, and that's not good for the Social Security System.

[newspeak]

39. those are my thoughts

lower wages brings less into the pot. I also wish they'd take away the cap.

[0rganism]

48. projections' accuracy isn't the real story, IMHO

this is part of a long-term media campaign to undermine trust in the SocSec program, such that the American people will consider it a failed program and vote for those who will gut it. There are real solutions which could shore up the program at its current level of payouts pretty much indefinitely, but they involve raising taxes on the "job creators" and we just couldn't bear to do that, could we?

[fascisthunter]

6. and so it begins

[woo me with science]

14. Yup. Predictable as hell.

Last edited Mon Apr 23, 2012, 08:35 PM - Edit history (1)

Cue the scripted drama and faux angst-filled, impassioned "debate" from our rulers, insultingly costumed as "representatives."

We are in serious, serious trouble in this country.

[WHEN CRABS ROAR]

7. Increase the cap and bring in more funds.

MEDICARE FOR ALL!

[customerserviceguy]

20. Well, you can't just do that alone

For starters, you need to limit the amount of the maximum benefit based on additional FICA taxes for top earners. Right now, when you up the cap, you up the maximum benefit.

Here's an idea: Keep the cap reasonable (keeping the maximum benefit lowered) and make the sky the limit on the employer's share of FICA. If a bailed-out megabank wants to pay it's CEO ten million dollars to run the thing into the ground, let them pay FICA tax on all ten million.

[shcrane71]

45. I like your idea. It could induce a bit more

equity in distribution of wealth. I have a hard time believing that CEOs and managers who have run the world's economy into the ground are worth the millions upon billions of bonuses and compensation that they give themselves.

[newblewtoo]

8. and yet the payroll tax

holiday continues?

It is time to get real about taxation and means testing. Millionaires are laughing all the way to the bank. They are still getting their Bush tax cut. The forty dollar payroll tax cut is a drop in the bucket to them. Increase the cap and increase the rate progressively. Fully fund Social Security.

[PSPS]

15. No means testing

Social Security is not a welfare program so it should never be means tested. It's a retirement insurance plan into which we all pay premiums for a defined benefit. Means testing was specifically prohibited when it was created because it was never intended to be a welfare program.

[msongs]

9. our president/congress have loads of $$$ for the military industrial complex

for which they really work, so all you seniors and working people can just eff off

[Throd]

10. Yay! The whole thing is going tits up the same year I become eligible!

[customerserviceguy]

21. If Congress does nothing

It will be busted way before you get there. I have little faith of it being there for me, and I'm 56.

[mike_c]

11. what "painful action?"

For cryin' out loud, just raise the cap on earnings taxed. The only people who will suffer "pain" are people who make decent salaries exceeding $107,000. The vast majority of Americans would feel no pain at all, because we make less than that and already pay withholding on our entire earnings. This is just further proof that you and I are not our congress persons' real constituents. We're not rich enough to matter.

[MannyGoldstein]

27. Obama's "Deficit Commission" (Simpson-Bowles) recommended a $50,000 cut in lifetime benefits

per retiree to fix this fully-fake crisis.

[dflprincess]

33. And wasn't that before Obama cooked up the 2% cut in Social Security taxes?

We've been had and badly.

[Fire Walk With Me]

13. Monsters desperately want to steal the SS pool of funds.

Watch them come up with ANOTHER excuse to try.

[customerserviceguy]

23. Here's a secret: It's been stolen.

Congress has zero intention of ever redeeming those IOU's. That's the same thing as stolen, in my book.

[happyslug]

25. Congress has been paying it back since 2009

2009 was the last year we had a Social Security Surplus, in 2010 and 2011 we had a deficit that the Treasury had to "make up" i.e pay.

For details see:
http://www.socialsecurity.gov/OACT/TR/2012/lr4b1.html

[customerserviceguy]

34. They're paying interest on the principle

not repaying the principle. At some point, the borrowing for that is going to get expensive, but at today's ultra-cheap interest rates, it's not a major part of the Federal budget.

Get the interest rates to where they have historically been, when a savings account would pay three to five percent, and you'll see a new unwillingness to put that bulge in the budget. Add that to the tax-holiday that will never go away, and you have the basics of a really big problem.

[melm00se]

50. debt service

for the US Federal public debt is approaching 20% of tax revenues.

Fiscal Year...............Federal Tax Revenue...........Cost to Service debt.........%
2011........................$2,303.5 B...........................$454.4B....................19.7%
2010........................$2,162.7 B...........................$414.0B....................19.1%
2009........................$2,105.0 B...........................$383.1B....................18.2%
2008........................$2,524.0 B...........................$451.0B....................17.9%
2007........................$2,568.0 B...........................$430.0B....................16.7%
2006........................$2,407.0 B...........................$406.0B....................16.9%
2005........................$2,154.0 B...........................$353.4B....................16.4%
2004........................$1,880.0 B...........................$321.6B....................17.1%

woe be tide us when interest rates go up.

[Fire Walk With Me]

36. :(

[radarluv]

37. Better hide your book or they'll steal that too.

You bring up a good point. They've been borrowing money from Social Security for years, everyone forgets that and they want it that way. First they get rid of your pensions, then you lose the value of your 401K, they strip the union gains, then they get rid of your medicare, then your social security. When does the class warfare start, and where do I sign up?

[closeupready]

40. They can default on the treasury bonds held by SS, but

then the US' credit rating dips into junk bond status. How likely are the oligarchs going to like that prospect?

[ieoeja]

42. Except that those bonds are not marketable.

Since the bonds held by SS can not be bought/sold on the open market, defaulting on them affects nobody except social security.

Once upon a time SS held the same bonds into which you and I could invest. They shifted it to special only-SS bonds in theory to guarantee better yields.

In doing so they made it possible to get rid of SS without impacting the market where the wealthy play. But I'm sure that was just a coincidence.

[closeupready]

44. Nope. Default on them, and our credit rating is kaput.

No way around that.

[Igel]

46. So don't "default."

Just order the SSA to rip them up.

Or issue a check to the SSA for the full amount, and then order SSA to turn the money over to Congress.

Same thing.

All the bonds we're talking about are held by the SSA and only by the SSA, by law. Given that, there are lots of ways of doing the same thing as "defaulting" which have the exact same outcome.

[customerserviceguy]

49. Long before they would default

They will raise FICA taxes, cut benefits, print money, or some combination of those things.

[madrchsod]

16. well i guess i`ll be dead by then so i`ll get mine!

tough shit to the rest of you!




just kidding..




put people back to work and raise the tax on the 1% and it should be fine for years

[RebelOne]

17. I'll be dead then too.

I am already collecting social security and have been for the past 8 years. But I worry about my kids and grand kids.

[MannyGoldstein]

18. The bipartisan war on Social Security continues

Another "crisis" based on cooked estimates.

The 1% want those trillions bad.

Real bad.

Wake up, DU. This Republican/Third Way bullshit needs to stop.

[JoePhilly]

22. I thought Obama killed Social Security 2 years ago.

Oh wait ... didn't happen.

But its absolutely, definitely gonna happen!!!

I hear Obama is also going to take everyone's guns if he gets a second term.

Yup ... not doing it in his first term is part of his secret evil plan.

He'll kill SS and take everyone's guns in his second term.

Yup. Definitely.

[MannyGoldstein]

26. I thought Obama killed the Bush tax cuts 2 years ago.

Oh wait ... didn't happen.

But its absolutely, definitely gonna happen!!!

I hear Obama is also going to end job-obliterating "free" trade agreements if he gets a second term.

Yup ... not doing it in his first term is part of his amazing chess game.

He'll kill the Bush tax cuts and end job-obliterating "free" trade agreements in his second term.

Yup. Definitely.

[JoePhilly]

28. The difference is, my post is ON TOPIC. Yours, not so much.

But thanks for playing.

You were predicting the death of SS under Obama ... he was going to gut, cut, slash ... yet it has not happened.

But any time a fear mongering story on SS hits the media, like the one here .... BAM!! You are there to reinforce that nonsense.

So stick with it ... you'll only have to put up with President Obama for about 4.75 more years.

[MannyGoldstein]

29. Rep. Conyers: Obama Demanded Social Security Cuts--Not GOP

Rep. Conyers: Obama Demanded Social Security Cuts--Not GOP

I've simply pointed out that Obama is working to slash Social Security and predicted that he'd openly call for it - and he has.

I think that you're better than abetting politicians using fabricated projections to steal tens of thousands of dollars from from retirees and throwing millions into poverty.

[JoePhilly]

31. Except your first claim is false.

"Obama is working to slash Social Security".

Its BS.

He gave the GOP some rope. And they've tried to hang themselves.

They attacked SS under Bush, and they continue to do so. They won't stop after Obama wins a second term. And they won't stop after we get a new President in 2016.

And so ... for the next few years ... you'll be here to remind us about how you think Obama is planning to kill SS, even as no such thing actually happens.

Stick with it ... it works for you.

[MannyGoldstein]

32. So appointing the two biggest foes of Social Security to run a "deficit commision"

was... what?

Calling for Social Security to be cut was... what?

Using cooked projections to show that Social Security will become insolvent is... what?

[closeupready]

41. Super secret maneuver!!!

So secret, nobody knows what's going on.

[happyslug]

24. Just able to pay 75% of expected beneifts is "Exhaustion"????

That is what the actual table indicate.

http://www.socialsecurity.gov/OACT/TR/2012/lr4b3.html

It sounds like what SSA will pay NOTHING, when all actual table say SSA will be only able to pay 75%. That is NOT exhaustion of the Social Security, just of the surplus that has been built up since Reagan.

What is upsetting the GOP, is that at the present time the surplus is no longer becoming bigger, Social Security has to go to the Treasury and ask for the money the Treasury borrow under, Reagan, Bush, Clinton, Bush jr and Obama. Social Security is no longer a cash cow, it is a drain on the Treasury.

Part of the report that shows that the surplus is no longer getting bigger, but SS is costing the Treasury since 2009.
http://www.socialsecurity.gov/OACT/TR/2012/lr4b1.html

The complete report if you want to research it:
http://www.socialsecurity.gov/OACT/TR/2012/lrIndex.html

[Igel]

47. "Trust fund exhaustion."

That's precisely what the data in the table indicate.

It's also precisely what the article said.

[grahamhgreen]

30. We simply need to raise the cap on SS funding, and eliminate the Reagan tax cuts.

[unkachuck]

35. capitalists and their political stooges....

....are trying to force us to give our retirement security to the crooks and gamblers on wall-street so they steal it legally rather than have us pay taxes into a guaranteed government program that will actually deliver retirement benefits....

....it ain't gonna work, it wouldn't be prudent....if they think we're going to believe and go along with this bullshit they're sadly mistaken....there's going to be hell to pay if anyone, I mean anyone, touches Social Security or Medicare....

[4th law of robotics]

43. Set a fixed amount for everyone

maybe a bit more than what half of recipients are getting currently to gain support.

Increase that amount yearly to cover inflation and some reasonable amount on top of that (1% a year? I dunno, something manageable). Also slowly work the retirement age downward to a better age.

Set taxes on current workers to be whatever is necessary to cover last years expenses so it will never be insolvent (no cap on income, probably include capital gains and whatnot) and there won't be any vast reservoir of money laying around to be raided for other projects (tax and spend immediately).

Might work, I don't know. Just spit-balling here.