Social Security - 2013 Report and Statement

[bluedeathray]

This link is to the federal Government's annual report on Social Security.

http://www.socialsecurity.gov/OACT/TR/2013/tr2013.pdf

The board of Trustees make no statements about the repayment of the $2.5 Trillion ($2,500,000,000,000.00) owed to the Fund by the Federal Government. Proposed solutions are limited to reducing benefits. Or increasing the ages at which benefits commence. Social Security disability payments of course have no age limitations on a personal level. Survivor benefits have their own regulations.

This link is to Treasury Secretary Jacob Lew's statement concerning the annual report. It seems to me that he and the board of Trustees both seem to make the implicit assumption that the huge IOUs placed in the SS fund will never be repaid.

http://www.treasury.gov/press-center/press-releases/Pages/jl1963.aspx

This link is to the "Cat Food" interview by Alex Lawson. Interviewing the outspoken former Senator Alan Simpson. And reported in this article by Jane Hamsher.

http://fdlaction.firedoglake.com/2010/06/17/alan-simpson-cutting-social-security-benefits-to-take-care-of-the-lesser-people-in-society/

Among quotes other than eating catfood (not Simpson's), former Senator Simpson makes the valid observation that in order to repay the IOUs in the fund, the Government would have to borrow the money.

This link helps explain the $2.5 Trillion IOUs, and their effect on Seniors.

http://www.usmoneytalk.com/finance/seniors-federal-gov-now-owes-2-5t-to-the-social-security-trust-fund-903/

Finally, this link is to the reports (SSA & Medicare), as well as a summary of both, plus the Secretary's statement.

http://www.treasury.gov/resource-center/economic-policy/ss-medicare/Pages/social_security.aspx

[newfie11]

1. K&R

To bad MSM doesn't report the type of info you posted.

[Cryptoad]

2. Time to start calling SS what it mrophed into,,,,

a Government service , it is no longer a old age pension fund.

Time to remove the Cap and make FICA a progressive tax so the poor old folk's benefits can be increased!

[FarCenter]

9. It is not and never was an old age pension fund. It is insurance.

In the United States, Social Security is the Old-Age, Survivors, and Disability Insurance (OASDI) federal program.

http://en.wikipedia.org/wiki/Social_Security_(United_States)

Current benefits are paid out of current tax receipts with a trust fund set up to compensate for the fact that age cohorts vary in size.

[Cryptoad]

10. If its a insurance

then it should be completely separate from the Federal Budget. which it is not.... call it what you like, but it has become a government service.... an a damn good one at that!

[FogerRox]

15. SS has been separate fron the General fund since Lyndon Johnson

[bluedeathray]

14. Sad but true

I love your tag line.

[winter is coming]

3. "The board of Trustees make no statements about the repayment of the $2.5 Trillion"

So debt is bad, unless we're talking about repaying the SS fund.

[bluedeathray]

4. Nobody characterized "debt" one way or the other.

The only point was that SSA IOUs weren't being factored into future benefits.

Do you enjoy putting words in people's mouths?

Translating statements to the silliest degree?

Or do you just like to watch the rolley eyes?

[winter is coming]

5. I enjoy paying attention to the big picture as well as the details.

Chained CPI is being floated again as a possibility in the upcoming budget talks. The recurring meme is that the deficit is a huge, pressing problem and that cutting SS will help with that debt. Sidestepping the fact that SS is owed money makes it a lot easier to mischaracterize as a burden, thus playing into that meme.

[Yo_Mama]

7. Except this is not true

The report assumes that the trust funds will be repaid. The benefit date cuts given in the report occur after the trust funds are depleted. Those dates are 2026 for HI (Medical hospitalization), 2035 for SS alone, 2033 for DI & SS, and 2016 for DI alone.

In practice, the common belief is that we cannot repay the trust funds in later years when the draw becomes more severe due to the need to borrow more and more money to do so. But the Trustees are not assuming that the trust funds will not be repaid, and the need to cut benefits and the timeline given for when that must happen under current law assume that the Trust funds WILL BE REPAID.

[FogerRox]

16. The 2.7 trillion is held in Treasuries

No money is owed to the SSTF.

[Yo_Mama]

6. Actually they do plan on repaying the trust funds

Part of the SS, DI & Medicare payments are coming from the trust funds even now.

The exhaustion date for SS & DI combined of 2033 (20 years from now) is the date when the DI & SS funds together become depleted and so under current law benefits are cut.

Under current law, in 2016 the DI fund will be depleted and by 2017 those receiving disability benefits will see cuts of over 17%. Everyone expects that before that happens, Congress will change the law so more of the FICA is allocated to disability, but that advances the date when SS benefits are cut by a few years to 2033.

And in 2026 Medicare HI Trust funds will be depleted.
http://www.ssa.gov/oact/TRSUM/tr13summary.pdf

Your statement that the foreseen cuts are due to not repaying the trust funds is flatly untrue. I'd encourage everyone to read at least the summary:
http://www.ssa.gov/oact/TRSUM/tr13summary.pdf

[sabrina 1]

8. Is there some problem with the Borrower having to do whatever is

necessary to repay the money they borrowed? If the Fed Govt is finding itself in a position where it cannot repay its loans, then it is the Fed Gov that has created a problem and there is no reason on earth why anyone should be projecting cuts for present or future beneficiaries in order to make life easier for the out of control spenders.

Here's a thought the Treasury Sec might want to consider. Assuming the report is factual, right now is the time for the Borrowers to end the costly wars, cut Pentagon Spending in half at least, eliminate the cap on SS, START CREATING JOBS here in the US instead of rewarding the outsourcing of jobs.

Why in the world are they looking at making the LENDERS pay when there a few easy steps, (the Pentagon Budget is the obvious place to begin) that would ensure the fiscal stability of SS for decades to come.


No one is going to buy this 'solution', I hope they realize that. It's like having an out of control teenager who has borrowed from his friends, unable to control his spending, then forcing the friends to take a financial loss rather than making him sell his toys, get a job instead of playing video games all day, and start taking responsibility for his debts.

[Yo_Mama]

11. They are not projecting cuts in order not to repay the trust funds

The trust funds are not sufficient to pay benefits as scheduled, okay?

Benefits will be cut BECAUSE THE TRUST FUNDS HAVE BEEN REPAID AND ARE THEN EXHAUSTED. With no further law changes, DI benefits will be cut a minimum of 17% in 2017 because THERE IS NO MORE MONEY IN THE TRUST FUND.

That's what the trustees' report says. Read it. The disability trust fund deficit is expected to be made up by Congress shifting money from SS to DI, just as Congress has done before. That leaves SS benefit cuts by 2033 or 2034. Maybe a year or two earlier, depending on economic performance.

The issue is not non-repayment of trust funds. The issue is that there is not enough money in the trust funds to fund these programs for the next 20 years.

[sabrina 1]

12. They borrowed trillions from the fund. The Fed Govt went on a wild

spending spree around the world, with bailouts for Wall St. Criminals and two trillion dollars worth of Bush Tax Cuts for the wealthy.

And worse, they have REWARDED and still are, Big Corporations with subsidies and tax cut incentives to take jobs out of the country.

They can eliminate the cap on those currently IN the work force.

They can do the most important job they have, bring jobs back to this country instead of paying to outsource them.

This report is based on the CURRENT situation with high unemployment and little effort to change that situation where people are earning livable wages.

And considering all this, why did they cut the FICA tax for two years?? I remember being slammed for speaking out against it.

From the report:

A temporary reduction in the Social Security payroll tax rate in 2011 and 2012 reduced payroll tax revenues by an estimated $222 billion in total. The legislation establishing the payroll tax reduction also provided for transfers from the General Fund to the trust funds in order to “replicate to the extent possible” payments that would have occurred if the payroll tax reduction had not been enacted. Those General Fund reimbursements amounted to about 15 percent of the program’s non-interest income in 2011 and 2012. The temporary payroll tax reduction expired at the end of 2012.

So when the fund needs it most, they deliberately reduce its source of revenue?? What were they thinking and why should we trust anyone who would make THAT kind of disastrous decision to 'fix' anything?

[Yo_Mama]

13. Okay, now you are talking reality about increasing the wage cap

That's the sort of thing we need to do to actually fund the SS, Medicare and DI programs.

But you are still obsessed with the trust funds, and so far no one is planning on not repaying them. We are withdrawing from all three to fund benefits, and we have been for years. The problem is that there is not enough money in the trust funds to pay benefits. But the reason that there is not enough in the trust funds has nothing to do with the US government borrowing from them. The bookkeeping was accurate, and there hasn't been any actual money in the trust funds for decades. I think it was changed under Kennedy so that the federal government could borrow all the money.

The FICA wage tax cut did not affect SS, Medicare or DI because it was repaid by the federal government. It did drive up the federal debt by over 200 billion, and yes that could become a future problem. But it has nothing to do with these programs currently, or with the looming 2016 Disability benefit crisis.

There is no indication that the US GDP growth rate will pick up in the future, although the official stats are assuming that it will. It is likelier that another recession will intervene and lower these rates - two or three recessions by the 2030s.

We have to raise taxes to fund these programs.

[FogerRox]

18. Many falsehoods in your comment

The SS Trust Fund holds 2.7 trillion in US Treasuries. No money was ever borrowed from the SSTF.

This is the process, SS collects FICA, the FICA is paid to the US Treasury to buy US Special Treasury Bonds. Then the Treasuries puts that Money in the General Fund. When those Treasuries come due, the Money is taken from the General fund to redeem the Treasury Bond.

The payroll tax holiday was 100% paid for, the SSTF lost no revenue because of the payroll tax holiday.

[sabrina 1]

19. I'm not going to bother to take your post apart and point out all the

false claims contained within it. So I'll provide this for those who are likely to read this thread so they can decide for themselves whether or not approx two trillion dollars has been borrowed from the SS Fund.

Federal Government Borrowed Two Trillion Dollars From the Social Security Fund

Lol, but I give you credit for creativity in your presentation.

[FogerRox]

23. But the 2.7 trillion is in the SS Trust Fund.... in the form of US Treasuries.

http://en.wikipedia.org/wiki/Social_Security_Trust_Fund
http://www.aflcio.org/Issues/Retirement-Security/What-Is-Social-Security
http://www.ssa.gov/oact/progdata/assets.html

What actually happens is that FICA money is used to purchase Treasuries, the Treasury takes the money from the proceeds and spends it. When the Treasuries mature they can be rolled over or the Federal Government can pay to redeem the Treasury.

Now if you want to call that borrowing, fine. But its a far cry from being remotely accurate.

[FogerRox]

17. The Federal Gov. owes nothing to SSTF

The SSTF holds 2.7 trillion in US Treasuries.

[sabrina 1]

20. That's why the Fed Govt pays interest on what you claim is a non-existent loan?

[Yo_Mama]

21. Treasuries are loans.

The US pays interest on all Treasuries.

If the federal government hadn't used the money, and instead they had put the money out on deposit in banks, it would be getting less in interest income than it now is.

Nothing in the Trustees report has any dependence on how the trust funds are funded. Benefit cuts are entirely due to not enough money having been accumulated to keep paying full benefits.

[sabrina 1]

22. There is no need for benefit cuts, in fact, it would stimulate the economy to

increase benefits.

the Fed Govt spent two trillion of the funds for SS on wars and bailouts for the wealthy and Bush tax cuts for the wealthy.

here is plenty of money for SS. Just a teen % of the Pentagon Budget would easily pay for SS.

[FogerRox]

24. The 2.7 trillion is in the SS trust fund. No one spent it.

Bush's wars ran up the deficit and debt, but as you know SS has nothing to do withe deficit or the debt.

http://www.ssa.gov/history/InternetMyths2.html