Medicare Gets New Lease On Life; Social Security Remains Healthy

[one...two...tree 2,762]

by Dan Froomkin

The new health care law has significantly improved the prognosis for Medicare, extending the life of its trust fund by 12 years until 2029, and thereby delaying any need for dramatic changes in benefits or revenues, according to a new report.

The annual check-up from government actuaries overseeing the nation's two central safety-net programs also found that Social Security continues to be much less of a problem than Medicare, and will remain in strong financial shape at least through 2037.

"The financial outlook for the Medicare program is substantially improved as a result of the far-reaching changes in the Patient Protection and Affordable Care Act," concludes the Medicare report -- although the trustees warned that the improvements depend on the successful implementation of the law.

Social Security, according to its annual report, is expected to pay out slightly more in benefits than it receives in payroll tax this year, for the first time since changes were made in 1983. But payroll taxes are only one source of income for the program, and with the others -- including interest income on its $2.5 trillion trust fund, held in special issue U.S. Treasury securities -- the program is expected to continue to run a surplus until 2024.

The program will need to start spending from its trust fund in 2025, with that fund becoming exhausted in 2037, which is consistent with last year's estimate. But at a press conference Thursday, Social Security Commissioner Michael J. Astrue, one of the government trustees releasing the report, begged reporters not to scare the public by exaggerating the significance of trust fund exhaustion

"That does not mean that there will be no money left," Astrue said. At that point, even if Congress took no action, Social Security could still pay out 78 percent of expected benefits from annual revenues. "That would be a bad result, but it is a far cry from having no benefits at all," he said.

Inaccurate reporting on the topic tends to "make young people despair about Social Security," he said.

The program, signed into law in 1935 by Franklin Delano Roosevelt, has served as an economic lifeline for millions over the past 75 years. "I'm excited about the next 75 years of Social Security, and you should be too," Astrue said.

Astrue said that both reports taken together, along with recent analyses by other groups such as the Congressional Budget Office, show that the new health care law will result in "very, very, very substantial improvements in the rate of growth of health care costs... on a scale that make a very substantial impact on that piece of our long-term fiscal challenges."

Astrue and the three cabinet members -- Timothy Geithner of Treasury, Hilda Solis of Labor, and Kathleen Sebelius -- who serve as trustees of the two program all spoke positively of the fiscal commission that President Obama has commissioned to suggest ways to reduce the long-term federal deficit.

But the new reports seem to cast doubt on the commission's current direction, which is widely interpreted to be an assault on social programs.

Robert Greenstein, a leading liberal budget expert who directs the Center on Budget and Policy Priorities, called attention to what he called the "huge reduction" in Medicare's long-term budget problems. The new report projects an 80 percent reduction in the 75-year shortfall for the Medicare trust fund, from 3.88 percent of taxable payroll to a much more manageable 0.66 percent.

That means Medicare "is in dramatically better financial shape than it was prior to the enactment of the health reform law," even as the law simultaneously improves coverage and reduces premiums, Greenstein told the Huffington Post.

And these are reliable numbers, he said. "These are not political numbers. These numbers are based on the work of the Social Security and Medicare actuaries. Political officials can put whatever spin they want on the numbers, but the numbers themselves are generally not subject to political influence."

Nancy Altman, co-chairman of the Strengthen Social Security Campaign, said in a statement: "Every year, the trustees' reports become an excuse for fear mongering by those who should know better. This year, the news is especially good for Medicare, thanks to the enactment of health care reform. The news for Social Security is even better...

"Unfortunately, we know there are some in Washington, including a few members of the Administration's fiscal commission, who will use this report to try to advance their agenda of cuts to Social Security benefits, including raising the retirement age. Politicians should stop scaring the American people. Social Security is strong and should be strengthened, not cut."

link

[Obama 2012 1,714]

Ah, typical Steve.... praising tax increases on everyone and praising womb to death babysitting by the government.

[one...two...tree 2,762]

Ah, typical Steve.... praising tax increases on everyone and praising womb to death babysitting by the government.

Don't feel obliged to post in every thread you don't like. Either respond with something of substance or ignore the thread.

[Mr. Big Dog 10,747]

... although the trustees warned that the improvements depend on the successful implementation of the law.

That's the key. The numbers assume full implementation of the law and full realization of the estimated cost benefits. We already know that it's only going to be a few months down the road where we will see that this won't happen. There will be another doc fix come November (after the last one passed just this June), and then there will be another one, and then another one. And the rosy picture will, all of a sudden, not be all that rosy anymore. Better than what we had but I am not as optimistic as those that compiled or now celebrate the report.

[SMR 368]

by Dan Froomkin

The new health care law has significantly improved the prognosis for Medicare, extending the life of its trust fund by 12 years until 2029, and thereby delaying any need for dramatic changes in benefits or revenues, according to a new report.

The annual check-up from government actuaries overseeing the nation's two central safety-net programs also found that Social Security continues to be much less of a problem than Medicare, and will remain in strong financial shape at least through 2037.

"The financial outlook for the Medicare program is substantially improved as a result of the far-reaching changes in the Patient Protection and Affordable Care Act," concludes the Medicare report -- although the trustees warned that the improvements depend on the successful implementation of the law.

Social Security, according to its annual report, is expected to pay out slightly more in benefits than it receives in payroll tax this year, for the first time since changes were made in 1983. But payroll taxes are only one source of income for the program, and with the others -- including interest income on its $2.5 trillion trust fund, held in special issue U.S. Treasury securities -- the program is expected to continue to run a surplus until 2024.

The program will need to start spending from its trust fund in 2025, with that fund becoming exhausted in 2037, which is consistent with last year's estimate. But at a press conference Thursday, Social Security Commissioner Michael J. Astrue, one of the government trustees releasing the report, begged reporters not to scare the public by exaggerating the significance of trust fund exhaustion

"That does not mean that there will be no money left," Astrue said. At that point, even if Congress took no action, Social Security could still pay out 78 percent of expected benefits from annual revenues. "That would be a bad result, but it is a far cry from having no benefits at all," he said.

Inaccurate reporting on the topic tends to "make young people despair about Social Security," he said.

The program, signed into law in 1935 by Franklin Delano Roosevelt, has served as an economic lifeline for millions over the past 75 years. "I'm excited about the next 75 years of Social Security, and you should be too," Astrue said.

Astrue said that both reports taken together, along with recent analyses by other groups such as the Congressional Budget Office, show that the new health care law will result in "very, very, very substantial improvements in the rate of growth of health care costs... on a scale that make a very substantial impact on that piece of our long-term fiscal challenges."

Astrue and the three cabinet members -- Timothy Geithner of Treasury, Hilda Solis of Labor, and Kathleen Sebelius -- who serve as trustees of the two program all spoke positively of the fiscal commission that President Obama has commissioned to suggest ways to reduce the long-term federal deficit.

But the new reports seem to cast doubt on the commission's current direction, which is widely interpreted to be an assault on social programs.

Robert Greenstein, a leading liberal budget expert who directs the Center on Budget and Policy Priorities, called attention to what he called the "huge reduction" in Medicare's long-term budget problems. The new report projects an 80 percent reduction in the 75-year shortfall for the Medicare trust fund, from 3.88 percent of taxable payroll to a much more manageable 0.66 percent.

That means Medicare "is in dramatically better financial shape than it was prior to the enactment of the health reform law," even as the law simultaneously improves coverage and reduces premiums, Greenstein told the Huffington Post.

And these are reliable numbers, he said. "These are not political numbers. These numbers are based on the work of the Social Security and Medicare actuaries. Political officials can put whatever spin they want on the numbers, but the numbers themselves are generally not subject to political influence."

Nancy Altman, co-chairman of the Strengthen Social Security Campaign, said in a statement: "Every year, the trustees' reports become an excuse for fear mongering by those who should know better. This year, the news is especially good for Medicare, thanks to the enactment of health care reform. The news for Social Security is even better...

"Unfortunately, we know there are some in Washington, including a few members of the Administration's fiscal commission, who will use this report to try to advance their agenda of cuts to Social Security benefits, including raising the retirement age. Politicians should stop scaring the American people. Social Security is strong and should be strengthened, not cut."

link

Cook the numbers however you want to change the date at which the program will collapse. The fact is that even the most favorable estimate you can find still predicts that, like any Ponzi scheme, social security will eventually collapse or require a major overhaul.

[Pinocchio Liberal 268]

Don't feel obliged to post in every thread you don't like. Either respond with something of substance or ignore the thread.

Thats the problem. there is no substance.

[one...two...tree 2,762]

Cook the numbers however you want to change the date at which the program will collapse. The fact is that even the most favorable estimate you can find still predicts that, like any Ponzi scheme, social security will eventually collapse or require a major overhaul.

Social Security is not a Ponzi scheme, no matter how many times that Right Wing talking point gets repeated.

[mawilson 2,133]

Social Security is not a Ponzi scheme, no matter how many times that Right Wing talking point gets repeated.

Well it is if they keep looting the fund.

[one...two...tree 2,762]

Well it is if they keep looting the fund.

The looting would be then be the scheme, not the program itself.

[mawilson 2,133]

The looting would be then be the scheme, not the program itself.

Sure, but the end result is the same - the program is broke because the government can't keep their

hands out of the Social Security cookie jar.

[Texanadian 10]

Social Security is not a Ponzi scheme, no matter how many times that Right Wing talking point gets repeated.

How is it not a ponzi scheme?

A bank account is not a ponzi scheme. The money that goes into it has your name on it. Everything in the account is your's. It doesn't matter what happens with future economies or birth rates. The money is 100% yours.

Social Security requires you to put money in year after year and not a penny of it goes to a dedicated fund with your name on it. 100% of it is spent on older people. 100% of your "benefits" come from future younger people.

What do you define as a ponzi scheme?

[one...two...tree 2,762]

How is it not a ponzi scheme?

A bank account is not a ponzi scheme. The money that goes into it has your name on it. Everything in the account is your's. It doesn't matter what happens with future economies or birth rates. The money is 100% yours.

Social Security requires you to put money in year after year and not a penny of it goes to a dedicated fund with your name on it. 100% of it is spent on older people. 100% of your "benefits" come from future younger people.

What do you define as a ponzi scheme?

Fortune Magazine Refutes 'Social Security Ponzi' Claim

First, in the case of Social Security, no one is being misled. Madoff allegedly falsely claimed to have discovered a "black box" method of earning impressive results, and by doing so enticed individuals and organizations to invest with him. Social Security is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns. (Of course, it's true that if Madoff had the power to require participation, he would have had an easier time keeping his alleged scheme rolling.)

Second, Social Security isn't automatically doomed to fail. Played out to its logical conclusion, a Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted. That's when the last people to participate are out of luck; the music stops and there's nowhere to sit.

Third, Social Security is morally the polar opposite of a Ponzi scheme and fundamentally different from what Madoff allegedly did. At the height of the Great Depression, our society (see "Social") resolved to create a safety net (see "Security") in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones. That might rankle, but it's not fraud.

Charles Ponzi, for whom the scheme is named, was unencumbered by such high-minded ideals. When he came to fame in 1920 -- 15 years before Social Security's creation, by the way -- he was a charming, likeable Bostonian who convinced himself that he had found a way to make himself and his investors rich using foreign exchange rates and international postage coupons. When he realized that his method wouldn't work, he should have come clean, but instead he tried to find a legitimate way to deliver on his promises, only to bring ruin on many of his investors and himself.

Edited August 6, 2010 by El Buscador

[Mr. Big Dog 10,747]

How is it not a ponzi scheme?

In the civilized and less hysterical world, people tend to refer to public retirement arrangements as intergenerational contracts.

Edited August 6, 2010 by Mr. Big Dog

[Pinocchio Liberal 268]

In the civilized and less hysterical world, people tend to refer to public retirement arrangements as intergenerational contracts.

Oh my what a nice word.

[Ban Hammer 13,427]

In the civilized and less hysterical world, people tend to refer to public retirement arrangements as intergenerational contracts.

intergenerational contract sounds like an old geezer with a young wife.