Both here in Mississippi and nationally, congressional candidates are making no mention of the serious challenges faced by the present iterations of the Social Security and Medicare programs. Baby Boomers poised to collect the entitlements are decidedly not ignoring the issues, but are nervously reading disturbing warnings that fiscal danger looms.
The Social Security and Medicare Trustees released their annual report earlier this month and documented the fiscal realities of the two programs. The latest projections show that Medicare Hospital Trust Fund (Part A of Medicare) will be depleted in 2026, three years earlier than projected last year.
At the point, trustees project that Medicare could continue to pay out 91 percent of current benefits in 2026, then see that decline to 78 percent in 2039, then rebound to 85 percent in 2092. Bottom line, less Medicare benefits to cover skyrocketing healthcare costs.
Social Security Disability insurance is projected to experience similar difficulties in 2032, which the Social Security retirement program is projected to be impacted in 2034 – that is to say that the Social Security Trust Fund will deplete its reserves by 2034.
What does that mean? It means that Social Security will in 2034 not be able to pay beneficiaries in full and that beneficiaries will face a 21 percent across the board benefit reduction from numbers shown on the annual benefits projections from the Social Security Administration.
Those facts matter only to voters who have plans to actually receive Social Security and Medicare benefits from the same federal government who deducted taxes supposedly dedicated from their paychecks expressly for the purpose of funding the programs.
What retirees and Baby Boomers really have in terms of that “nest egg” they thought they had in Social Security and Medicare when FICA was being deducted from their payroll checks is in reality a pile of congressional IOUs in a U.S. Treasury Department Bureau of the Public Debt’s filing cabinet in Parkersburg, W. Va. The bonds aren’t backed by the cash we gave the government from our payroll deductions.
They are backed by the “full faith and credit” of the federal government. But Congress long ago spent the actual assets to fund other government functions and to redeem the bonds, the government would now have to borrow money or raise taxes.
Conservative Republican former Social Security and Medicare public trustee Charles Blahous recently wrote: “What’s really important is the magnitude of the (Social Security and Medicare) shortfalls and the difficulty of correcting them, which grows each year. Whether depletion is distant or near, the problem had to be confronted sooner rather than later. Unfortunately, later has come sooner than the trustees thought it would.”
Democratic former chief economist to former Vice President Joe Biden took this posture on the entitlement programs: “What is the way forward? Surely, the sooner we tackle these shortfalls, the better. Wouldn’t it be awesome to avoid yet another one of those fiscal cliffs that we know is coming but are too dysfunctional to address until the last minute, when we kludge together some patch?”
The bottom line is that Social Security and Medicare as we know it today is on borrowed time. “Saving” the programs – and even that concept is a stretch in the current fiscal and political climate in this country – will require additional government revenues and austerity measures both in terms of healthcare costs and in program eligibility.
In other words, the entitlements have to be reformed at the same time that new revenues are found to shore up the shortfalls. And yet, while cruising through congressional elections, voters aren’t having conversations with the candidates about these two vital issues – and that fact is a true electoral mystery.
Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com
Tuesday, June 12, 2018
Sid Salter: Whistling Through the Graveyard
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5 comments:
Sid Salter is a ultra conservative Republican. Social Security's problems will be worked out. Salter is a highly overpaid MSU employee who does nothing to earn his pay but write a few stupid press releases.
I stopped at 'iterations' and refuse to read Sid's sentences that contain thirty or more words. How did he develop this nauseous habit?
Trump is fixing this problem. Every move he is making foreign and domestic will bolster the tax base and get more people pulling the wagon than riding on it. Welfare recipients are now at the number they were 10 years ago, and corporations are incentivised to HQ at home rather than abroad. Billions to the tax base and there is more to come. Heard him the other day explaining how we built the interstate highway system out of cash flow, No Debt. The more I hear him talk the more I like the way he thinks.
Sid Salter is a ultra conservative Republican.
Your commenting privileges should be immediately revoked.
7:59 am Social Security Disability used to be Aid to the Aged and Disabled.
If we stopped using the money paid into SS by working people to pretend that those who haven't worked enough quarters aren't welfare recipients, Social Security would still be flush.
And, how come the projections for Social Security are so dismal if the economy and employment projections are so good? There should already be more revenues coming in ,right?
And, uh, you might bother to found out from whence " the cash flow" came for the Interstate highways. Hint: it was a tax that could only go into building the system so it was fully funded in advance and doled out to States accordingly. It's what a funding bill should be...not "pie in the sky".
Please, learn how things worked when they worked so you won't be so easily misled.
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