Social Security: Become Informed-Avoid Disaster

Delay in Medicare's New Durable Medical Equipment Competitive Bidding Program Affecting Certain Areas of the Country

What's Changing

Congress has acted to delay the new competitive bidding program that started on July 1, 2008.

What You Need to Know

You now can continue to get your Medicare-covered equipment and supplies from any Medicare-approved supplier. If you changed your supplier when this new program started, you can continue to use the new supplier, or choose another supplier.

Medicare is continuing to make sure you can get the supplies and services you need. We will post more information about the new program in the future.

The trustees, issuing a once-a-year analysis of the government's two biggest benefit programs, said the resources in the Social Security trust fund will be depleted by 2041.

The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped out by 2019.

Both those dates were the same as in last year's report. But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes.

For Medicare, that threshhold is projected to be reached this year and for Social Security it is projected to occur in 2017.

Even this warning doesn't go far enough.

The so-called trust fund is a fund that has nothing but IOU's. It is paper that has replaced the money congress has stolen from the social security yearly excess revenues. Congress has spent the money on pork barrel projects among other horrors.

Social Security and Medicare Reports

The Secretary of Treasury is the Chairman of the Boards of Trustees of the Social Security and Medicare trust funds.

He serves with five other trustees, three from the Federal government (the Commissioner of Social Security, the Secretary of Health and Human Services and the Secretary of Labor) and two public trustees who are appointed by the President and confirmed by the Senate.

Each year the trustees provide Congress with a detailed accounting of the current and projected financial status of the Social Security and Medicare trust funds.

Two reports are issued, one for Social Security and one for Medicare.

Below you can find the most recent trustees' reports and links to the Social Security Administration and the Center for Medicare and Medicaid Services for previous trustees' reports.

There is also a link to the Green Book published by the House Ways and Means Committee.

The Green Book provides background material and data on programs within the Committee's jurisdiction, including the Social Security and Medicare programs.

Trustees Reports Links

Trust Funds and the Federal Budget PDF icon 2007 Trustees Reports

Social Security Report PDF icon

Medicare Report PDF icon

Summary of Reports PDF icon

Secretary's Statement

Previous Trustees' Reports

Social Security Administration

Center for Medicare and Medicaid Services

Final Report PDF icon of the President's Commission to Strengthen Social Security Ways & Means Committee Green Book for background information

SOCIAL SECURITY'S FUTURE

COMMITTEE ON WAYS AND MEANSSOCIAL SECURITY SUBCOMMITTEE

JANUARY 26, 2004 BOCA RATON, FLORIDA

TESTIMONY OFJAMES B. LOCKHART, III DEPUTY COMMISSIONEROF SOCIAL SECURITY

...The trust funds would need an additional $3.5 trillion today to be able to pay all scheduled benefits for the next 75 years. That means that, in addition to current Trust Fund assets, a lump sum of $3.5 trillion today, earning interest at the Treasury bond rate, would be sufficient to meet annual revenue shortfalls over the next 75 years.

This $3.5 trillion is a figure roughly equal to the total public portion of the national debt. This measure of unfunded benefit obligations increased $200 billion in just one year. Absent any action to address this situation, this steady growth in the shortfall will continue, year after year.

The following appeared in Amy Ridenour's National Center Blog

October 15, 2007

The Debt Tsunami Begins: First Baby Boomer Files for Social Security

Kathleen Casey-Kirschling became the first baby boomer to file for Social Security retirement benefits today, prompting warnings from those in the know that both Social Security and Medicare are both desperately insolvent.

A Fox News report excerpt tells part of the story:

...David Walker, the comptroller general of the Government Accountability Office, Congress' legislative arm, warned the Social Security system will soon have more recipients coming than it can afford to pay out.

"We face a tsunami of spending due primarily to the retirement of the baby boom generation and rising health care costs," Walker said. "So what's happened is we've gone from 16 workers paying into Social Security for every person drawing benefits in 1950 to 3.3 to one today, and we're going down to two to one by the time the boomers retire in big numbers and that's about where it will stay over the long run.'

'We're going to have tens of thousands of baby boomers retiring every week over the next decade or so and that means that by time we get to 2017, just 10 years away, we will no longer be collecting enough payroll taxes to pay Social Security benefits,' said former Minnesota Democratic Rep. Tim Penny.

Under current law, Social Security won't have enough money to pay promised benefits in 2041 but there is another crunch much, much sooner, the result of the the federal government relying on Social Security to pay for its annual spending.

When Social Security gets payroll taxes it pays out most of the money in benefits. The rest is supposed to go into a trust fund. Instead the government has been spending the money on other government programs, and putting IOUs into the trust. When Social Security needs the money it'll turn to the government waiting for the payback. But the government won't likely have any.

'This money has been borrowed, it's been spent, and there's no easy way to put it back,' Penney said.

The loan is expected to be called in 2017, when the largest bloc of the boomers — those born between 1946 and 1964 — will be retiring. By the mid 2020s, the federal government will have to fork over more than $200 billion a year, and then it climbs to more than $300 billion a year.

At the same time, all that is money that was being used for federal programs will no longer be available, meaning everything — from education to defense to the environment — will face a financial crunch.

Walker said over the next 75 years between Social Security, Medicaid and other entitlements, the federal government will be in a $50 trillion hole.

'Social Security represents about $6.4 trillion of that. Medicare represents $32 trillion of that. The surprising thing is that Social Security is the easy thing to fix,' Walker said. Fifty trillion dollars, to put it in perspective, is 95 percent of the estimated net worth of every American including every billionaire. Fifty trillion dollars is $440,000 per American household.'

For years, lawmakers on Capitol Hill, as well as the Bush and Clinton administrations, have been making alternate proposals for saving Social Security. They include raising taxes, reducing spending, limiting benefits or delaying the retirement age.

Walker noted that despite the term 'entitlements,' which comprise about 62 percent of government spending, government payouts are nowhere guaranteed in the Constitution.

'That 38 percent (of discretionary spending) represents all of the main functions outlined by the founding fathers of the United States for the federal government in 1787, and yet that 38 percent is being squeezed every year by mandatory spending programs,' Walker said."

So is Congress putting is the issue of Social Security rescue and reform on the front burner? Heck, no. The key committees with jurisdiction over the insolvent Social Security and Medicare systems, Senate Finance and House Ways and Means, have instead spent their time this year adopting an underfunded SCHIP expansion. And, although President bush put Social Security on the top of his domestic priority list for his second term, matters weren't any better when the GOP ran the House and Senate.

One gets the strong impression that all Congressmen and Senators know how to do is spend, spend, spend.

Here are the websites of the two committees:

Committee on Ways & Means, U.S. House of Representatives

United States Senate Committee on Finance

Call or write their memberships and ask them why they supported expanding SCHIP beyond what's needed to keep current benefits while Social Security and Medicare are insolvent. And ask them when they plan to start earning their paychecks and very generous benefits by tackling the joint Social Security/Medicare funding crisis. Few domestic issues are more critical to the American people._____

Posted by Amy Ridenour at 10:48 PM

CBS and ABC Admit Social Security In Trouble

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The amount of taxes paid on social security has now increased 42 times

In 1965 the tax on Medicare was added to FICA taxes.The breakdown now is 6.2% social security and 1.45% Medicare from employee and employer for a total of 15.3.

So a much, much higher rate on all taxable income up to $94,000 plus and a 1.45% on all taxable income.

In 1950, there were 16 workers paying taxes into the Social Security system to support each recipient.

Today there are slightly more than 3 workers to each recipient.

Very soon, there will be just 2 workers for each recipient.

As the worker-to-retiree ratio shrinks, the higher the tax will be, to those paying, in order to maintain present benefits.

Important Facts:

-In 1935, the tax was 2%, on the first $3000 of earnings, a maximum of $60 per year.

-In 1960, the tax had risen to 6%, with a much higher maximum.

-Today it is 12.4%, up to nearly $100,000

Without action from you, Congress will let it get much worse.

The taxes collected to pay for the system show up on your paycheck as FICA taxes. FICA stands for Federal Insurance Contributions Act.

Almost eighty percent of American families pay more in FICA taxes than they do in federal income taxes.

In addition to all taxes now paid, the FICA tax will soar from the present 12.4% to nearly 20%, in order to maintain present payments to recipients.

Interestingly the system is and has been taking in trillions more than is owed in payments each year but Congress has spent those extra trillions.

By the year 2017, it is now projected, there will no longer be a surplus. Thereafter, a deficit will start to build.

To see these figures go to Social Security To The 2006 Trustees Report

We must rein in Congress now.