The annual Trustees’ Report on the Status of Social Security and Medicare was released on Friday. Due to the weakened economy, slower economic recovery than was assumed in last year’s report, lower estimates for death rates and increasing number of baby boom beneficiaries, the year in which the Social Security Trust Fund will be exhausted has been moved up by one year to 2036.
“Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2085,” states the Trustees’ Summary.
Although the Trustees, by tradition, do not make recommendations for solving the problems they report, the Summary does state:
”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.”
No kidding. At least as far back as 2005, when President George W. Bush tried unsuccessfully to privatize Social Security, there were a lot of good ideas for keeping Social Security solvent. They are still there. Two I think make the most sense:
• Raise or eliminate the salary cap
• Increase FICA contribution by 1.1 percent to 8.3 percent
We don’t get anywhere with fixing Social Security because Democrats in Congress are afraid they will lose elections if they advocate workable fixes and Republicans want to eliminate the program they have hated since its inception. The longer we wait to make adjustments, the more expensive it will be.
The full Trustees’ Report on Social Security is here.
Medicare is in greater peril although it is in somewhat better shape now due to the Affordable Care Act (health care reform bill) passed last year. As Maggie Mahar reported Friday in her highly respected Health Beat blog,
”Before Congress passed the ACA, Medicare’s trustees had predicted that the Health Insurance Fund would begin running out of money in 2016 — just five years from now.
“After President Obama signed the legislation in March of 2010, the Trustees announced that thanks to cost savings and new money raised by the Affordable Care Act, the HI fund wouldn’t begin to run short until 2029.
“Today Medicare’s Trustees reported that a “slower than assumed economic recovery” has taken a toll on revenues, and they moved the turning point up to 2024.”
Maggie Mahar is optimistic that Congress will “eventually” create a public option to compete private insurers that would save money with lower administrative costs than the private insurers.
The full Medicare Trustees’ Report for 2011 is here [pdf].
What is absurd about all the cacophony in Washington about Medicare being unaffordable is that it is obvious to anyone not beholden to corporations and Wall Street that Medicare for All, single payer health care, universal health care – whatever you want to call it – is the answer.
But with the exception of a handful of Congress members, no one will consider anything but taking the costs out of the hides of elders.
When it’s bad news, it’s always the old folks first. To wit: Today, the federal government officially runs out of money – it hits the debt ceiling and Congress is no closer to raising the borrowing limit than I am to fitting into a bikini.
So Treasury Secretary Timothy Geithner will now begin borrowing from the federal workers’ retirement fund. I wonder why it doesn’t make me feel any better to know that the Treasury Department is legally required to reimburse the fund?
Oh, I remember now: that’s the pension a bunch of Republicans in Congress thinks is too generous to postal workers, security guards, administrative assistants and all the workers who answer the phone so patiently when we call with questions about Social Security or Medicare.
[EDITORIAL UPDATE] In previous posts, I have lamented that the 2 percent FICA tax holiday for 2011, cuts Social Security revenue by 15 percent. I was wrong. The shortfall is being made good from general revenues.]
At The Elder Storytelling Place today, Mickey Rogers: To All the Cows I’ve Milked Before