New Trustee report for Social Security

[Vladd44]

http://ssa.gov/OACT/TRSUM/index.html

The financial condition of the Social Security and Medicare programs remains challenging. Projected long run program costs are not sustainable under current program parameters. Social Security's annual surpluses of tax income over expenditures are expected to fall sharply this year and to stay about constant in 2010 because of the economic recession, and to rise only briefly before declining and turning to cash flow deficits beginning in 2016 that grow as the baby boom generation retires. The deficits will be made up by redeeming trust fund assets until reserves are exhausted in 2037, at which point tax income would be sufficient to pay about three fourths of scheduled benefits through 2083.

Medicare's financial status is much worse. As was true in 2008, Medicare's Hospital Insurance (HI) Trust Fund is expected to pay out more in hospital benefits and other expenditures this year than it receives in taxes and other dedicated revenues. The difference will be made up by redeeming trust fund assets. Growing annual deficits are projected to exhaust HI reserves in 2017, after which the percentage of scheduled benefits payable from tax income would decline from 81 percent in 2017 to about 50 percent in 2035 and 30 percent in 2080. In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.

In the event anyone did not know, when it says "redeeming trust fund assets" the translation is, money out of the general treasury to replace the money stolen from the SS fund over the last 40 years. The "trust fund" has not assets, only IOUs from the treasury department.

These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits.

I personally do not think there is an overwhelming need to fix this problem, but that is only because I do not expect the Federal Government to last long enough for this particular chicken to come home to roost.

[April]

When Ronald Reagan was eligible to collect a full Social Security pension, while simultaneously collecting a salary as president of the United States, while vacationing on his ranch, living in the lap of luxury, with Nancy wearing custom designed clothing by Bob Mackie, collecting a Social Security check in which the amount for a single month was more than what the poorest of the elderly get in a full year, THAT was when I figured out the biggest problem that Social Security had from the very start...

It wasn't needs based. It wasn't a welfare system for the elderly poor incapable of earning enough to live on and never able to earn enough during their working years to have anything to put away for retirement.

Just how many people have they dished out un-needed cash to, since the very beginning? If the Social Security fund still had all of that cash, and it was needs based, would there be a problem?