Just encase you missed this story on the nightly newscast (oh, who I am I kidding….the lamestream media did not think this little tidbit was worth reporting), the financial stability of both Medicare and Social Security has been updated…….to critical!
Social Security Finances Significantly Worse, Says 2012 Trustees Report
By David John
“There are risks and costs to action. But they are far less than the long-range risks of comfortable inaction.”
—John F. Kennedy
“Lawmakers should not delay addressing the long-run financial challenges facing Social Security and Medicare,” the trustees wrote. “If they take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare.”
—2012 Social Security trustees report
Social Security’s finances significantly worsened last year, according to the new 2012 trustees report, because of a weakened economy and structural problems with the program. The April 23 report shows that all people who receive Social Security benefits face about a 25 percent benefit cut as soon as 2033—three years earlier than predicted in last year’s report. The program’s long-term deficit is now larger than it was before the 1983 reforms. In order to pay all of its promised benefits, Social Security would require massive annual injections of general revenue tax money in addition to what the program receives from payroll taxes. These additional funds would be needed for the next 75 years and beyond.
Factors Dragging Down Social Security
The poor numbers come from a number of factors, including the continued weakness of the U.S. economy, high energy prices holding down wages, and a significant increase in the number of people who receive benefits from Social Security’s disability program (SSDI). SSDI has its own sub-trust fund that will be exhausted in 2016. While some SSDI costs will be paid from money that would have gone to pay retirement and survivors’ benefits, SSDI recipients face across-the-board benefit reductions in just four years. As this year’s report shows, the need to reform SSDI is as great as the need to fix the rest of the program.
Long-Term Financial Picture Worsens
In net-present-value terms, Social Security owes $11.3 trillion more in benefits than it will receive in taxes. This 2012 number consists of $2.7 trillion to repay the special-issue bonds in the trust fund and $6.5 trillion to pay benefits after the trust fund is exhausted in 2033. This is an increase of $2.2 trillion from last year’s report. This is the largest one-year drop in the program’s finances since 1994.
Net present value is the amount of money that would have to be invested today in order to have enough money on hand to pay deficits in the future. In other words, Congress would have to invest $11.3 trillion today in order to have enough money to pay all of Social Security’s promised benefits through 2086. This money would be in addition to what Social Security receives during those years from its payroll taxes.
The trustees report’s perpetual projection extends beyond the usual 75-year planning horizon. In net-present-value terms, the perpetual projection is $20.5 trillion, including money necessary to repay bonds in the trust fund. Last year’s number was $17.9 trillion.
This means that Social Security’s net-present-value deficit after 2086 is $9.2 trillion. These projections show that the program’s total deficit continues to grow well beyond the 75-year projection period. For that reason, a successful reform would need to eliminate the deficits over the 75-year window and address those that come after that period.
In actuarial terms, Social Security’s long-term financing declined sharply from a 75-year deficit of 2.22 percent of taxable payroll in last year’s report to a deficit of 2.67 percent. This 0.44 percent change resulted mainly from the economy’s continued weakness and the effects of high energy costs.
Social Security Ran Another Deficit Last Year
In 2011, the Old-Age and Survivors Trust Fund, which pays for retirement and survivors’ benefits, took in $698.8 billion, which includes $106.5 billion that came from a paper transaction that credited interest to the trust fund. Excluding the interest, the retirement and survivors program had income of $592.3 billion but paid out $603.8 billion in benefits, leaving a deficit for 2011 of $11.5 billion. Additional deficits were suffered by Social Security’s disability program.
Counting both programs together, in 2011, Social Security spent $45 billion more in benefits than it took in from its payroll tax. This deficit is in addition to a $49 billion gap in 2010 and an expected average annual gap of about $66 billion between 2012 and 2018. These deficits will quickly balloon to alarming proportions. After adjusting for inflation, annual deficits will reach $95 billion in 2020 and $318.7 billion in 2030 before the trust fund runs out in 2033. Now is the time to focus on solutions.
The immediate cash-flow deficits are largely due to the effects of the recession on the program’s finances. The recession increased the amount of benefits paid out by Social Security, as older workers who lost their jobs chose to file for benefits earlier than they might have otherwise. Meanwhile, younger unemployed workers did not pay Social Security taxes, while workers who suffered a drop in their incomes paid lower amounts. However, this year’s projections show that these effects will continue. Higher energy prices are expected to dampen income increases, while the longer-term effects of the recession are likely to hold down the number of hours individuals can work.
Moreover, the condition of Social Security continues to deteriorate in future years so that the overall estimate is further worsened in 2012, when the 75-year financial window shifts to include 2086—a year when Social Security is expected to run a very large deficit.
The Trust Fund Does Not Make Social Security Healthy
The existence of a trust fund does not make Social Security healthy. Although those assets are guaranteed by the full faith and credit of the United States, the bonds it contains must be repaid using general revenue that would otherwise go to other programs. Similarly, the interest that Social Security receives on existing trust fund balances is not spendable income. It merely inflates the numbers in the trust fund and increases the amount that Social Security will eventually receive from general revenue. The only part that counts today is the cash that Social Security receives from the Treasury to cover its annual operating losses.
Many opponents of reform claim that raising payroll taxes by about 2.7 percent (the average percentage difference between revenues and outlays over the 75-year period) would permanently solve Social Security’s problems. The reality, however, is that the program’s future deficits are projected to be both large and growing, so this tax increase would still leave a huge shortfall. Modest changes will not fix the current system.
Delay in Fixing Social Security Will Only Make Matters Even Worse
Congress could have fixed Social Security several years ago but delayed because it feared making the difficult decisions. A further delay in addressing Social Security’s financial problems will only make the situation even worse. The new trustees report is not based on conjecture; it is based on a firm understanding of the economy and the U.S. population. Almost every new taxpayer who will begin a career before 2033 is living today and can be counted. Similarly, all the people who will face approximately 25 percent across-the-board benefit cuts starting in the year 2033 if Congress does nothing to fix the program are alive now, and most of them are paying taxes.
Social Security’s problems are based on demographics that do not change from year to year. The people who will be hurt if nothing is done to fix Social Security are not unknown people of the future: They are the nation’s children and grandchildren of today.
David C. John is Senior Research Fellow in Retirement Security and Financial Institutions in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
U.S. Social Security Administration, “The 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds,” April 23, 2012, http://www.socialsecurity.gov/OACT/TR/2012/index.html (accessed April 23, 2012).
Trustees: Medicare Will Go Broke in 2016, If You Exclude Obamacare’s Double-Counting
The Trustees of the Medicare program have released their annual report on the solvency of the program. They calculate that the program is “expected to remain solvent until 2024, the same as last year’s estimate.” But what that headline obfuscates is that Obamacare’s tax increases and spending cuts are counted towards the program’s alleged “deficit-neutrality,” Medicare is to go bankrupt in 2016. And if you listen to Medicare’s own actuary, Richard Foster, the program’s bankruptcy could come even sooner than that.
Here’s how the Centers for Medicare and Medicaid Services summarize the findings, which carry the formal title “2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds” :
[Medicare Hospital Insurance Trust Fund] expenditures have exceeded income annually since 2008 and are projected to continue doing so under current law in all future years. Trust Fund interest earnings and asset redemptions are required to cover the difference. HI assets are projected to cover annual deficits through 2023, with asset depletion in 2024. After asset depletion, if Congress were to take no further action, projected HI Trust Fund revenue would be adequate to cover 87 percent of estimated expenditures in 2024 and 67 percent of projected costs in 2050. In practice, Congress has never allowed a Medicare trust fund to exhaust its assets.
The financial projections for Medicare reflect substantial cost savings resulting from the Affordable Care Act, but also show that further action is needed to address the program’s continuing cost growth.
Congressman Steve King is a great patriot, and a man who may be too honest for Congress. Congressman King has been relentless, and has maintain his integrity while holding the Obama Administration accountable for their actions and their failures. It has made Congressman King a target of the Democratic Party….a role he was born for.
Rep. Steve King torches Obama admin’s selective enforcement of law for political and racist reasons
Originally posted: Posted by The Right Scoop
During a press conference on SB1070 today, Rep. Steve King ripped the Obama administration and the Justice Department for selective enforcement of the law solely for political and racist reasons. After citing example after example of how the Obama administration has done this, he went to the nub of it and spelled it out rather bluntly for the press:
There’s a political motive for this and it should be very clear to all of us. It’s not a mystery! This isn’t about somebody else’s idea of what the rule of law is, this is about somebody’s idea on what’s going to benefit them politically. … We cannot be a successful nation if we’re going to let politics flow from the Justice Department and from the White House and usurp the rule of law.
Watch below, it’s excellent:
Congresswoman/National DNC Chairperson Wasserman-Schulz rivals even her New Hampshire counterpart for exaggeration. Schulz is prone to hyperbole, to the point at times it makes me laugh. Schulz is truly the perfect spokesperson for her party…….
Sigh: DWS’ Lie of the Day
Guy Benson is Townhall.com’s Political Editor. Follow him on Twitter @guypbenson.
We could probably make this a daily installment, although I’m not sure I have the bandwidth to keep up with the DNC Chairwoman’s endless distortions. Her latest whopper came on CNN this morning, during a spat with conservative contributor Will Cain:
Ignore, for a moment, the crux of their dispute, and focus on this snippet:
“I’m a member of Congress in the minority, unfortunately, which I plan to help change in November,” Schultz shot back. “But the people who control the agenda right now in the House of Representatives are the Republicans. Ask them why they haven’t brought a single jobs bill to the floor since they took over the majority. Ask them why they are getting ready to allow the student loan interest rates to double.”
The House Republicans “haven’t brought a single jobs bill to the floor” since January 2011? This is a wildly false claim. Case in point: The House recently passed something called, um, the JOBS Act — which cleared the Senate and was signed into law by President Obama. At the time, I noted that the bill wasn’t the first bipartisan jobs legislation this GOP-controlled House helped implement (numerals added):
Let the record show that as of today, the “do nothing,” “Republican” Congress has worked with the president by (1) extending the payroll tax cut extension, (2) passing patent reform, (3) repealing a counter-productive withholding rule, and (4) approving three free trade agreements. These were all elements of President Obama’s jobs agenda. Now he’s (5) signed a job creation bill championed by House Republicans. Remember this roster of bipartisan accomplishments as our desperate president castigates his Congressional opponents as unflinching ideological obstructionists — as he’s guaranteed to do for the next seven months. The truth is that Republicans cooperate with this president when it’s sensible to do so; they attempt to jettison his worst ideas, like cap and trade, Obamacare, higher taxes, and a second slush fund stimulus.
Keep in mind that those are just the bipartisan successes. My list doesn’t include the dozens of addtional job-related bills that House Republicans have passed, only to be thwarted by the Democratic Senate and president. Unsurprisingly, DWS’ statement on national television this morning was thoroughly and comprehensively untrue. And as for her indignation over her opponents’ supposed plan to let student loan interest rates to double, perhaps she should direct her exasperation at those responsible for engineering the legislation to do exactly that:
While Obama blames Republicans for voting against new ways to make college more affordable for middle-class families, it was House Democrats who cut interest rates on the school loans in 2007 and included an expiration provision that placed the looming increase in the middle of an election year.
It was a Democrat-controlled Congress that intentionally made this mess, in order to paint Republicans as anti-student and uncaring in an election year. Go figure. I guess we’ve answered DWS’ two “questions.” Anything else we can help you with, Debbie?
Segment One: Pro-Life Advocate Rebecca Kiessling
This week I am pleased to be interviewing one of my personal, modern day heroes, Rebecca Kiessling.
Rebecca will be speaking in New Hampshire on April 22, during the New Hampshire Right to Life – Knights of Columbus – Annual Pro-Life Seminar, and in advance of that appearance we wanted to chat with her about:
Her Story – Conceived in Rape – From Worthless to Priceless
Her conversation with Governor Rick Perry
In defense of ‘personhood’
The Presidential Election
For more information about Rebecca: http://
For more information about NH Right to Life Seminar: http://nhknights.org/
4/22/12, Sun., noon – 4 p.m., New Hampshire Right to Life Knights of Columbus annual Pro-Life Seminar, St. Joseph’s Cathedral, Manchester, NH
Segment Two: Gubernatorial Candidate Jackie Cilley
During the second half of our show we will be joined by Democratic Gubernatorial Candidate Jackie Cilley (http://jackiecilley.com/)
Who is Jackie Cilley?
Why is she running for Governor?
What makes her different from other Democratic Candidates?
Top Three Policy Concerns
Segment Three: It s Tea Time
Some (mostly those that have not been paying attention) have been asking – ‘Where is the Tea Party?
The media has tried very hard to diminish the viability of the Tea Party, or divert attention to the false movement known as the Occupy ‘Fill-in Blank’.
We are joined by one of New Hampshire’s leading liberty leaders, Jack Kimball of the Granite State Liberty PAC (GSLP), as we talk about the state of the Tea Party and the upcoming Tea Party event:
The Granite State Patriots Liberty PAC
Saturday, April 21
168 Portland Ave. (Rt. 4), Dover
ALL Patriots, Liberty Groups, 912 Groups,
And Tea Parties are invited to participate
For additional information
Statistics in the hands of a government agency are a lot like the ‘shell game ‘run by a scam artist on the street…………. misdirection and trickery.
President Obama and his willing accomplices have unique way of reducing unemployment…merely stop counting 88 million able body workers. I guess President Obama only cares about the people he can see.
From Hope to Hopelessness: Obama’s Economy Has 88 Million “Not In Labor Force”
It was less than a year ago that Barack Obama’s senior adviser, David Plouffe said:
After 2½ years in office, President Obama now “owns” the economy as an issue, according to top adviser David Plouffe, who added he was confident that voters understand that recovering from a devastating recession Mr. Obama inherited takes time.
“Of course he does,” Mr. Plouffe told NBC’s “Today” show host Matt Lauer when asked point-blank if Mr. Obama owns the economy.
“But the American people understand that we — it took us a long time to get to this mess,” Mr. Plouffe said. “It’s going to take us some time to come out. We are making progress.”
Well, after Friday’s jobs numbers came out (the economy added 120,000 jobs) Labor Secretary Hilda Solis promptly proclaimed: “That’s a noteworthy achievement.”
In fact, for the man who campaigned on the message of “hope” in 2008, the 120,000 jobs added is much fewer (about half) than expected and the edging down of the unemployment to 8.2% is not from job creation but from hopelessness.
There are now 88 million Americans who are “Not In Labor Force,” according to Department of Labor statistics, which the St. Louis Federal Reserve put into this
Obviously, others are seeing past Obama’s cheerleaders.
The Wall Street Journal stated:
But mostly, the picture was disappointing at a time when all eyes are on the U.S. to help keep global growth humming. The jobless rate, which is obtained from a separate survey of households, edged down to 8.2% from 8.3%, its lowest point in three years. However, that decline was due less to new hiring than people abandoning their job searches.
“I’m nervous,” said Jared Bernstein, former chief economist for Vice President Joe Biden.
Although Bernstein is not really an economist, he is right to be nervous.
And, so should the Obama Administration. The hard truth for Barack Obama is:
People have given up.
They have gone from ‘Hope’ to Hopelessness.
Andrew McCarthy on the black-hole otherwise known as “Not in the Labor Force”
Posted by The Right Scoop
Andrew McCarthy explains why the unemployment rate has become a useless statistic and why there are better measures for our unemployment predicament:
NATIONAL REVIEW – Through the magic of Washington Math and the Obama Labor Department, the metric “unemployment rate” has become as nonsensical as “jobs created or saved” by the stimulus. The Obamedia creates a free campaign ad out of the purported drop from 8.3% to 8.2% (i.e., from appalling to marginally less appalling), but meantime millions have been added to the black-hole category of “Not In the Labor Force” — people who are so discouraged that they are not looking for work. That number is at an all-time high: 88 million. Thus the labor force participation rate, at under 64%, is lower than it’s been in 30 years. Mish Schedlock concludes, “Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.”
Instead of giving the Left ammunition by bizarrely implying that our outlook is improving, maybe the Romney campaign could give some thought to breaking through the fudged “unemployment rate” chatter. Something like:
Total Population of Germany: 82,000,000
Population of U.S. Not in Labor Force: 88,000,000
The 2012 Presidential Election is an extremely important election, but it may not be the most important election. What is happening in Wisconsin with the recall of Governor Walker is not an election; it is ‘mob-rule’ by way of the ballot.
Before Governor Walker, Wisconsin had a multi-billion dollar budget deficit and double-digit tax increases year-after-year. Governor Walker promised to balance the budget without increasing taxes. In one year Governor Walker eliminated a 3.6 Billion dollar debt, without a tax increase.
Governor Walker’s only crime was that he ask the public sector employees to share in the sacrifice that so many other Wisconsinites were committed to in order to help return Wisconsin to fiscal sanity. The Union Bosses response – thuggery.
Rasmussen: Wisconsin Voters Support Walker Recall
A majority of Wisconsin voters now support the effort to recall Republican Governor Scott Walker, according to a new Rasmussen Reports statewide survey.
The survey shows that if the recall election was held today, 52 percent of Likely Voters would vote to recall Governor Walker and remove him from office. Forty-seven percent would vote against the recall and let him continue to serve as governor.
The survey of 500 Likely Voters in Wisconsin was conducted on March 27, 2012 by Rasmussen Reports. The margin of sampling error is plus or minus 4.5 percentage points with a 95 percent level of confidence.
Continuing the irresponsible amplification that is inflaming an already volatile situation, another Democratic Congressperson is hoping to cash in on the Trayvon Martin tragedy.
On Thursday’s Ed Schultz Radio Show, Congresswoman Jan Schakowsky, D-IL, heated up the rhetoric surrounding the Trayvon Martin case by calling it “A Modern-Day Lynching”
Must Read: Is Jerusalem the Capital of Israel?
President Obama is no friend of Israel, period. Any illusion to the contrary is just that……a figment of our national imagination. But this is nothing new, merely a continuation of Obama’s overall policy approach to almost everything – say one thing, do another. The problem is that Obama has willing compatriots, a complaisant mainstream media and a naïve Jewish community here in the United States. Both provide Obama the cover he needs to advance his callous approach concerning one of America’s strongest allies…. Israel. The Obama Administrations contempt was on full display during a press conference held by the State Department:
It was a simple question with only one answer – ‘What is the capital of Israel?’ In what now looks like the diplomatic version of ‘Who’s on First,’ the exchange between AP State Department Reporter Matt Lee and State Department Spokeswoman Victoria Nuland would be laughable, if only the fate of a country did not hang in the balance.
The Obama Administration is not incompetent in a general sense, but is hopeless in their steadfast belief that you can negotiate with terrorist. Of course, you cannot. Appeasement did not work in 1938, and for many of the same reasons, it will not work in 2012. The Obama Administration is continuing down a path that will inevitably lead to war, most likely a World War. But this war will not be isolated to the Middle East. This pending conflict that President Obama’s policies are rapidly moving us towards will be fought in the streets of London, Paris, New York, and beyond.