by Steve Gold
Challenging Social Security and Medicare's fiscal soundness has been a
regular activity of conservatives in this country since the 1950s. The
current attack is a virtual replay of 1983, with a few new twists. Each
time they attack, the unstated but likely intentional consequences are to
instill fear in older and disabled Americans, and people who will be
retiring in the future. Advocates for Older and Disabled Americans must
take the offense and fight back.
One of the new twists is to repeat the mantra that Social Security and
Medicare are "Entitlements." This short-hand label suggests the programs
are simply government largesse, "welfare," and charity. In our current
climate, such branding supports reducing or even eliminating these
programs.
But neither Social Security retirement/disability nor Medicare is an
"Entitlement." Both were enacted as insurance programs. Payments come out
of our wages pursuant to the Federal Insurance Contributions Act's FICA,
and are deposited in four separate trust funds: Old-Age and Survivors
Insurance; Disability Insurance; Hospital Insurance (Part A of Medicare);
and Supplementary Medical Insurance (Part B).
Throughout out working lives, we pay insurance payments or "premiums" (a
percent of our earnings) into these government sponsored insurance trust
funds so that when we no longer have earnings, due to retirement or
disability, we will receive these insurance benefits - the same way any
private insurance program is supposed to work.
Folks, let's wake up. It's our insurance benefits on the chopping block;
it's our money. Don't buy into the politico-hysterical rhetoric.
A second twist alleges that these programs are in deep financial trouble
and are the cause of our national deficits. One of the biggest
difficulties we face is to know which "facts" are accurate and which are
thrown out to frighten us.
The 2010 actuarial annual report of the Trustees' of Social Security and
Medicare shows assets of $2,540.3 billion in Social Security and $380.8
billion in Medicare, Part A and B. The Trustees report that "the outlook
for Medicare has improved substantially." Part A "is now expected to
remain solvent until 2029, 12 years longer than was projected last year."
Part B's program costs are "down 23 percent relative to costs projected"
earlier.
Due to the current deep recession, the Trustees point out that short-term
outlook for Social Security is not good. Social Security expenditures
will exceed receipts this year for the first time since 1983. Even so,
the Trustees expect the deficits to "shrink substantially for 2011 and to
return to small surpluses for years 2012-2014 due to the improving
economy."
What if the economy does not improve as much as the Trustees assume?
Rather than unsupported fear mongering, advocates must initiate a public
discussion regarding how we might address this problem.
Easy and relatively painless remedies exist to address future Social
Security concerns. For example, presently we pay Medicare payroll taxes
(1.4%) on our total earnings, but Social Security payroll taxes are do not
apply to earnings above $108,800.
Why should earnings above $108,800 not be subject to Social Security
payments? Why should people who earn less pay on their entire earnings
but people who earn more do not? Raising the Social Security's taxable
amount of earnings to include all of our earnings the same as Medicare
does will have no impact on the rate withheld, presently 6.5%, but will
ensure that we all pay our fair share.
A variant of this proposal came from The National Commission on Fiscal
Responsibility and Reform in December 2010 which recommended we pay
different Social Security payment rates on all of our income depending on
the earnings. The Commission estimated their recommended changes would
close nearly half of any shortfalls over the next 75 years.
An honest public discourse without rhetoric and myths might lead to
proposals that really address how to continue and improve these programs.
In 1983, President Reagan appointed Alan Greenspan to head a commission
which proposed numerous changes that resulted in nearly 30 years of
security. Hmmm. Reagan and Greenspan????
Steve Gold, The Disability Odyssey continues
Back issues of other Information Bulletins are available online at
http://www.stevegoldada.com with a searchable Archive at this site divided
into different subjects.
Information Bulletins are also be posted on my blog located at http://stevegoldada.blogspot.com/
To contact Steve Gold directly, write to stevegoldada@cs.com or call
215-627-7100.
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