For more than twenty years, Social Security’s benefit program has taken in more from employer and employee contributions than it has paid out in benefits. According to a report that will be released today, that is no longer the case.
Gathering and distributing the numbers
According to Associated Press, the government’s annual financial checkup is prepared by the Office of the Actuary, a group of nonpartisan professionals within the Health and Human Services Department.
Presenting the report
Treasury Secretary Tim Geithner, Health Secretary Kathleen Sebelius, Labor Secretary Hilda Solis, and Social Security Commissioner Michael Astrue will present the report.
While the administration is spending money to hire actors to sell senior citizens on how the health reform bill is going to make Medicare’s medical benefits better for them, it appears that it will be a detriment to those participating in Medicare. Money is being slashed from that budget to help finance coverage for the uninsured. The cuts may also affect enrollment in private insurance plans offered through Medicare. There is a strong medical lobby on Capitol Hill, and it is entirely possible Congress may have to change many of the intended adverse changes.
How many people will this directly affect?
Over 53 million people receive Social Security, with benefits averaging $1,100 monthly The plan, funded by a 7.65% mandatory deduction from wages, and a mandatory match by the employer, has expanded to cover other people who have never contributed. The tendency of many companies to move jobs out of the country, or hire people with no Social Security card (call them illegal aliens or undocumented workers; the result remains the same), or pay “under the table,” has led to a decrease in contributions for the program.
Medicare, covering more than 46 million retirees and disabled people, is funded through payroll taxes, the general fund, and premiums paid by beneficiaries.
What happened to the surplus?
The Federal Government has been “borrowing” from the 2.5 trillion dollar Social Security fund surplus for the past twenty-five years to spend on other programs. Now, to pay it back, the Government must borrow from public debt markets, which will increase the national debt even more.
Is there a solution?
Of course there is. President Obama has already formed a fiscal commission to review the problems and come up with a solution. I am certain that is an incredible group of intelligent, nonpartisan individuals. However, is a commission necessary? The Federal Government needs to be held accountable for actions, stop spending additional money, and eradicate government waste. That would be a good start to finding a way to repay money that should never have been touched.
Martin Crutsinger and Ricardo Alosno Zaldivar, AP, Social Security: Are we at a tipping point?,
Gail Russell Chaddock, Congress in no rush to fix Medicare and Social Security