[Ang]

Well, this just makes me feel warm and cozy all over ------ NOT!
What do our resident economists think of this?

http://finance.yahoo.com/news/Social-Secur...f-15219531.html

Social Security, Medicare dwindling in recession
Recession hits Social Security, Medicare, too -- funds face insolvency faster than expected
Stephen Ohlemacher, Associated Press Writer
On Tuesday May 12, 2009, 6:35 pm EDT

WASHINGTON (AP) -- Social Security and Medicare are fading even faster under the weight of the recession, heading for insolvency years sooner than previously expected, the government warned Tuesday.

Medicare already is paying out more money than it receives, something that happened for the first time last year. And Social Security will be by 2016, a year sooner than had been projected, the trustees' annual report said.

Unless changes in Social Security are enacted, the retirement fund will be depleted in 2037, four years sooner than projected last year. The Medicare trust fund is in even worse shape. It is projected to become insolvent in 2017, two years earlier than expected.

More immediately, the trustees do not expect Social Security recipients to get cost-of-living increases in 2010 or 2011, something that hasn't happened since automatic adjustments were adopted in 1975. The Social Security Administration will set next year's cost-of-living adjustment in October, based on inflation over the previous year.

"We should neither be casual nor hysterical about the revised insolvency dates," Social Security Commissioner Michael Astrue said. "The Social Security system will weather this recession. However, the sooner we get on with the task of reforming the system, the easier it will be to make the tough choices."

The recession is hurting both funds, which are financed by payroll taxes. The U.S. has lost 5.7 million jobs since the recession began, meaning fewer payroll taxes are flowing into the funds. At the same time, aging baby boomers and rising health care costs are adding to expenditures.

The trust funds -- which exist in paper form in a filing cabinet in Parkersburg, W.Va. -- are bonds that are backed by the government's "full faith and credit" but not by any actual assets. That money has been spent over the years to fund other parts of government. To redeem the trust fund bonds, the government would have to borrow in public debt markets or raise taxes.

Treasury Secretary Timothy Geithner, the head of the trustees group, said reducing health care costs is the key to saving Medicare.

"The most effective entitlement reform measure will be a major health reform that helps bring down the growth rate of national health care spending," Geithner said.

President Barack Obama and Congress have been working to overhaul the health care system with the goal of increasing coverage and lowering costs. But there is no consensus on how to pay for it.

"This report underscores the urgency of action on comprehensive health care reform this year," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "As costs continue to rise, the Medicare program so important to so many American families is put in jeopardy."

Republicans agreed that health care reform is urgent, but they warned against creating another government-run system.

"When we can't afford the public health plan we have already, does it make sense to add more?" asked Sen. Chuck Grassley of Iowa, the top Republican on the Finance Committee.

House Republican leader John Boehner said the trustees report "confirms what we already knew: Our nation cannot afford to continue this reckless borrowing and spending spree."

Geithner said the Obama administration plans to tackle Social Security once it health care is addressed. The options for fixing Social Security are simpler than for Medicare, though just as politically daunting: either raise revenues or cut benefits.

Workers fund Social Security by a paying 6.2 percent payroll tax on the first $106,800 of their earned income. Employers match the payment. Increasing revenues could be accomplished by increasing the tax rate or increasing the amount of earnings that are taxed.

Workers can currently retire with full benefits at age 66. The retirement age is scheduled to gradually rise to 67 for those born in 1960 or later. One option for cutting benefits would be to raise the retirement age even further.

"Social Security is really a math problem," said David Certner, director of legislative policy for the AARP. "Can you make sure that the money coming in is the same as the money going out?"

The trustees report projected that Social Security's annual surpluses would "fall sharply this year," then remain at a reduced level in 2010 and be lower in the following years than last year's projections. The report said that the Social Security annual surplus would be eliminated entirely in 2016, reflecting increased demands from the wave of 78 million baby boomers retiring.

That means Social Security will have to turn to its trust fund to make up the difference between Social Security taxes and the benefits being paid out beginning in 2016. After the fund is depleted in 2037, annual Social Security taxes collected would be enough to pay for three-fourths of current benefits through 2083.

On the Net: Social Security Administration: http://www.ssa.gov

[IndyTransplant]

Well, this just makes me feel warm and cozy all over ------ NOT!
What do our resident economists think of this?

http://finance.yahoo.com/news/Social-Secur...f-15219531.html

Looks like they will run out of money just before I am eligible to collect. So what else is new?
I have spent my life paying taxes for others' benefit. Every time Congress passed a credit (child care, college, etc) we had already finished and paid for the things (passed those stages of our lives) for which they passed the credits.

OK enough whining by me....I am relatively healthy and happy and have my family and friends. What more can you ask for really?

[davew]

I think if our lazy do little but spend congress were on the same social security plan it would get fixed and right

[mcstumper]

I think if our lazy do little but spend congress were on the same social security plan it would get fixed and right

I call for a do over on this post.

[kharris]

Looks like they will run out of money just before I am eligible to collect. So what else is new?
I have spent my life paying taxes for others' benefit. Every time Congress passed a credit (child care, college, etc) we had already finished and paid for the things (passed those stages of our lives) for which they passed the credits.

OK enough whining by me....I am relatively healthy and happy and have my family and friends. What more can you ask for really?

The retirement age is scheduled to gradually rise to 67 for those born in 1960 or later. One option for cutting benefits would be to raise the retirement age even further.

I was born before 1960 and cannot collect fulle benefits until I am 67 or 67 1/2. Correct me if I am wrong, but I believe the problem lies in the fact that the social security and medicare funds have been mishandles for years. I have read in the past that monies are borrowed from this fund but never paid back. What happens in the private sector if retirement funds are mishandles in this fashion? I think the government needs to correct the manner in which these funds are handled instead of forcing hard working people to work past the traditonal retirement age.

[Southsider2k12]

Social Security is the worlds biggest ponzi scheme, of course it is going to go broke. The whole system is totally dependent on there being more people paying in than are retired. With people living longer and the baby boom leaving the work force, the numbers don't work anymore.

[IndyTransplant]

Social Security is the worlds biggest ponzi scheme, of course it is going to go broke. The whole system is totally dependent on there being more people paying in than are retired. With people living longer and the baby boom leaving the work force, the numbers don't work anymore.

Yes, I agree. Unfortunately it was originally sold to the public as a savings plan, not a benefits plan (nonvoluntary) as they choose to call it today or welfare plan. My grandmother went to her death bed convinced that the social security money she collected was the money she contributed herself (set aside in a federal govt savings plan), plus interest. I did not have the heart to tell her that the little more or less than a $1 a pay period she contributed during her working days, would never have earned enough interest to allow them to pay her the amount she received each month after she retired (and she lived until she was almost 91 years old). Someone once told her it was not a savings plan and that the current workers were paying the money she was getting and she became so angry, she almost had a stroke. However it was her generation that they sold the original idea to and told them it was a savings plan.

Of course with today's economy, many baby boomers are not retiring as quickly as they planned.

I am in the same boat as kharris. As of right now I am scheduled to collect at approx age 67. As a mid babyboomer, I am quite sure I will be working forever, since there will be no money available by then. The younger generation will rightly rise up in revolt if they try to force them to pay enough to provide us with social security anywhere near equal to today's benefit.

[JHeath]

I absolutely understsand and empathize with everyone's concerns about retirement income, but what about the many individuals receiving disability benefits? What's to become of them when there's no funding left?

[Ang]

Good point.

[mcstumper]

Social Security is the worlds biggest ponzi scheme, of course it is going to go broke. The whole system is totally dependent on there being more people paying in than are retired. With people living longer and the baby boom leaving the work force, the numbers don't work anymore.

U.S. Federal Government...

The Original Bernie Madoff

[Tim]

I think if our lazy do little but spend congress were on the same social security plan it would get fixed and right

May I suggest -

[Ang]

Where's Roger?!?!?

[Tim]

Where's Roger?!?!?

Roger has left the building. There's a new sherrif in town.

[davew]

May I suggest -

Duly noted, my brevity may be my only excuse, but there is no excuse for it.

Thanks

[Dave]

Roger has left the building. There's a new sherrif in town.

Gaudere's Law:
Any post made to point out a spelling or grammar error will invariably contain a spelling or grammar error.

[Tim]

QUOTE(Tim @ May 15 2009, 08:14 PM) *

Roger has left the building. There's a new sherrif in town.


QUOTE
Gaudere's Law:
Any post made to point out a spelling or grammar error will invariably contain a spelling or grammar error.

__________________

Okay - so my new position as sherriff needs a little work.