Sunday, May 15, 2011

Fixing SS & Medicare is "easy".

The Clarion-Ledger published a letter from Mary Troupe a week ago filled with economic nonsense and ignorance. Instead of telling you what it says, I'll let you read it for yourself.

"Challenging Social Security and Medicare's fiscal soundness has been a regular activity in since the 1950s.

The current attack is a virtual replay of 1983, with a few new twists. Each time they attack, the unstated but likely intentional consequences are to instill fear in older and disabled Americans, and people who will be retiring in the future.

Advocates for older and disabled Americans must take the offense and fight back.

One of the new twists is to repeat the mantra that Social Security and Medicare are "entitlements." This short-hand suggesting the programs are simply government largess, "welfare," and charity.

In our current climate, such branding supports reducing or even eliminating these programs.

But neither Social Security retirement/disability nor Medicare is an "entitlement." Both were enacted as insurance programs. Payments come out of our wages pursuant to the Federal Insurance Contributions Act (FICA), and are deposited in four separate trust funds: Old-Age and Survivors Insurance; Disability Insurance; Hospital Insurance (Part A of Medicare); and Supplementary Medical Insurance (Part B).

Throughout our working lives, insurance payments or "premiums" (a percent of our earnings), are deducted from our paychecks and deposited into the government-sponsored insurance trust funds so when we no longer have earnings, due to retirement or disability, we will receive these insurance benefits - the same way any private insurance program is supposed to work.

Folks, wake up. It's your insurance benefits on the chopping block; it's your money. Don't buy into the politico-hysterical rhetoric.

A second twist alleges that these programs are in deep financial trouble and are the cause of our national deficits. One of the biggest difficulties we face is to know which "facts" are accurate and which are thrown out to frighten us.

Easy and relatively painless remedies exist to address future Social Security concerns. For example, we pay Medicare payroll taxes (1.4 percent) on our total earnings, but Social Security payroll taxes are do not apply to earnings above $108,800.

Why should earnings above $108,800 not be subject to Social Security payments? Why should people who earn less pay on their entire earnings but people who earn more do not?

An honest public discourse without rhetoric and myths might lead to proposals that really address how to continue and improve these programs.

In 1983, President Ronald Reagan appointed Alan Greenspan to head a commission which proposed numerous changes that resulted in nearly 30 years of security.

Stop the rhetoric and scare tactics - get a plan.

Mary Troupe
Executive Director
Miss. Coalition for Citizens with Disabilities

Not even one week passed and Bloomberg published this story about Medicare and Social Security running out of money:

"May 13 (Bloomberg) -- Medicare, the U.S. health insurance program for the elderly and disabled, and the Social Security trust for the disabled and retirees are running out of money sooner than the government had projected.

While Medicare won’t have sufficient funds to pay full benefits starting in 2024, five years earlier than last year’s estimate, Social Security’s cash to pay full benefits runs short in 2036, a year sooner than the 2010 projection, the U.S. government said today in an annual report
." Article

In fact, here is what the report published by the Obama Administration, not the mean ole Republicans said:

"The financial conditions of the Social Security and Medicare programs remain challenging. Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided.

The long-run financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected have adequate time to prepare. Earlier action will also afford elected officials with a greater opportunity to minimize adverse impacts on vulnerable populations, including lower-income workers and those who are already substantially dependent on program benefits.

Both Social Security and Medicare, the two largest federal programs, face substantial cost growth in the upcoming decades due to factors that include population aging as well as the growth in expenditures per beneficiary. Through the mid-2030s, due to the large baby-boom generation entering retirement and lower-birth-rate generations entering employment, population aging is the largest single factor contributing to cost growth in the two programs. Thereafter, the continued rapid growth in health care cost per beneficiary becomes the larger factor...

After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Through 2022, the annual cash deficits will be made up by redeeming trust fund assets from the General Fund of the Treasury. Because these redemptions will be less than interest earnings, trust fund balances will continue to grow. After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2085.
" Report

Of course for Ms. Troupe the answer is "easy": jack up the taxes. Never mind that that equates to an additional increase of 7.65% on wages over $108,000. Seems like a lot of money in Mississippi but in Massachussetts, New York, or California, that's nothing. Won't even get you into a decent house. Then there is the matter of self-employed. Yes Mary, that means you are advocating a 15% tax on self-employed people making above $108,000. When social security withholding taxes are discusses, rarely is the effect on the self-employed mentioned but it does exist. Doesn't matter though, the answer is still "easy." And by the way, Mary doesn't want you to worry about any financial reports on the solvency of Medicare and Social Security. They are just the same ole "attacks" heartless conservatives have been making for decades. Never mind if the Obama administration says they are running out of money, doesn't matter to Miss full-time professional advocate here who doesn't know how to read an actuarial table.

The fact, and I do mean fact, is so-called entitlements are the fastest growing part of the federal budget. You can only tax so much income to fund these programs. Many people have warned for years there was going to be a problem funding Medicare and Social Security and the latest report proves it. There is no "easy" answer and pointing out the current deficit in the programs is not an "attack".


Anonymous said...

If this woman is an Executive Director of an agency, someone better see about getting her out of there! She obviously has no business trying to run anything.

Anonymous said...

I taught in Mississippi Public Schools for 34 years. The paltry pay for teachers makes it impossible to fund a juicy 401k for retirement. I believe this fact is also true for law enforcement officers. Social Security and PERS is all the retirement many of us will ever have. Mary Troupe is way off base; but then she probably does have that juicy retirement package.

Anonymous said...

This, from a woman who runs a charity funded by bingo proceeds? All the gambling money could much better be used for people's retirements instead of blowing it on gambling. Perhaps she'd like to give up part of her $50,000 or so salary to help out those with no SS or Medicare.

Anonymous said...

Just follow Mary around the Capital during the Legislative Session. it won't take long for you to realize that she is a self serving idiot.

Kingfish said...

Should have seen her at the last Medicaid hearing. Complete dupe.

Anonymous said...

The reason SS taxes are capped at $108,000 is because benefits are capped. That's how Roosevelt got it passed originally.

Now, if she wants to tax Warren Buffet on every dime he makes, and give him $2,000,000 a year as a SS benefit when he retires, I'd like to see her persuade Congress that's a good plan.

Just because someone works hard and makes money doesn'r mean idiots like this troll are entitled to as much of the first person's money as they want.

Frugal Gal said...

I don't agree with Mary's take on SS but she is anything but a self-seving idiot. She was shot by her abusive husband and paralyzed. Instead of staying in bed for rest of her life, she created a new life for herself advocating for others who are stuck in wheelchairs. She has worked to try an ensure polling place access for people in wheelchairs -- Adams county used to require voters in chairs from one precinct to make an appointment to vote and then wait at the back door of building, Mary was part of the effort to stop that. She's worked to get the City of Jackson to make their sidewalks not-quite-as-dangerous for people in wheelchairs.

And, by the way, when national disability advocates come to Mississippi and urge her to file federal civil rights lawsuits against segments of Mississippi government, she refuses -- she'd rather work with others than file against them.

Mary is a tireless advocate for Mississippi's disabled, a group that very few people seem to care about. If advocating on their behalf makes her self-serving, then OK.

I think she's wrong in her letter, but I have seen too much of the good she's done to ever question her motives or demonize her for ONE opinion.

Anderson said...

Social Security is not "in trouble" by any reasonable measure. It can be tweaked here and there and do fine for the foreseeable future.

For this lady to compare SS and Medicare as if they were at all similar is just silly. Medicare growth has been rampant and is going to increase with the aging baby boomers.

The Dems' healthcare law will actually do some good things to rein in Medicare spending if future Congresses -- Dem or GOP -- have the political courage to do what the law says and not amend it. We will see.

Anonymous said...

The Dems' healthcare law will actually do some good things to rein in Medicare spending if future Congresses -- Dem or GOP -- have the political courage to do what the law says and not amend it.

And your expertise Anderson beyond being an attorney is what?

Anderson said...

"And your expertise Anderson beyond being an attorney is what?"

I had thought one premise of a democracy is that all citizens, whatever their professions, have some duty to familiarize themselves on questions of public policy. Was I mistaken?

Anonymous said...

" don't agree with Mary's take on SS but she is anything but a self-seving idiot....."

All of the Jesse Jackson-types of this world mask their self servance with a resemblance of public good. Mary is one of those types. I don’t argue her ability and initiative for not, “staying in bed for the rest of her life”, after the abuse she faced, but turning that situation into personal profit is simply wrong.

Anonymous said...

The actual impact of raising the contribution limit for Social Security is 6.2% of salary in excess of $108,800. The 7.65% is the sum of the Social Security contribution of 6.2% and Medicare at 1.45%. There's no limit on Medicare, so that doesn't change.

This would increase the benefit for high income earners according to the AIME formula that Social Security uses, but only a little bit. The net would be more $$ in the Social Security funds.

The Butterknife said...

I don’t argue her ability and initiative for not, “staying in bed for the rest of her life”, after the abuse she faced, but turning that situation into personal profit is simply wrong.

I sort of thought that was the "American Way". Its AMAZING to me how you people can even denigrate a woman in a wheel chair (through no fault of her own) who is attempting to help disabled people and Seniors and turn that into "wrong". If this was a Republican man turning some unfortunate situation into a "profit" everybody would be back slappin' and ass grabbin'.

Kingfish said...

Butterknife, no one denigrated her for being in a wheelchair. She wrote a letter to the editor and that letter is more than subject to criticism. If you had seen her at the Mississippican hearings, you would not exactly have be defending her, either.

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