Both Medicare and Social Security, For the First Time, Spent More than They Received

[The Straight Story]

Both Medicare and Social Security, For the First Time, Spent More than They Received

Last year marked a dark milestone for Medicare and Social Security, as both entitlement programs, for the first time in the same year, paid out more in benefits than they collected in revenue.

This development meant the federal government had to divert money from other government funds to make up the difference, thus adding to the budget deficit.

The Medicare trust fund is now projected to run out of money by 2024. After that, revenue from Medicare taxes will cover 90% of the program’s annual expenses. The percentage will decline to about 75% by 2045, before going back up to 88% by 2085.

Thanks to laws guaranteeing government funding, two aspects of Medicare, Part B of Supplementary Medical Insurance (SMI), which pays doctors’ bills and other outpatient expenses, and Part D, which provides access to prescription drug coverage, are not in danger of running out of money…unless Congress changes the law.

http://www.allgov.com/Top_Stories/ViewNews/Both_Medicare_and_Social_Security_For_the_First_Time_Spent_More_than_They_Received_110516

[Vinca]

1. Easy fixes. Open Medicare to everyone, raise SS cap.

[eShirl]

2. +1

[Champion Jack]

3. +1,000,000,000

[hobbit709]

4. Where's the jobs, Boner?

[WinkyDink]

5. Catapulting the propaganda.

[Fumesucker]

6. There really isn't any "trust fund", the money has long since been spent..

A lot of it on several unnecessary wars and a lot more on tax cuts for those who least need such tax cuts.

[minavasht]

7. How

was the money spent on tax cuts?

[hobbit709]

8. they robbed the kitty and left IOU's

[Fumesucker]

10. Actually they left "youoweme's"

Because those who received the largesse are not those who will be paying it back.

[exboyfil]

12. That is why I am always irritated

when someone says that a change like increasing the retirement age does not impact current retirees or the soon to retire. I was at a Congressional budget townhall, and rasiing the age from 67 to 70 was one of the topics discussed at one of our tables. The vote to do it was 4-3 with the 4 retirees voting in favor of it. They joked about it, but I was tempted to say most of your earnings life was done when S.S. was at 1/2 or 2/3 of the current withholding rate. Current retirees better bring something to the table as well. In addition we have an obligation to the future generation to not increase withholding rates.

From a fairness standpoint I am in favor of eliminating the cap but reducing the withholding rate for those above the current cap level for that income. Currently the $50K to $105K (approx.) income is benefitted at 15%. The folks earning that salary are subsidizing the entire system.

Also why should those working class people who paid for this build up be less of a creditor of standing than the Chinese? The whole 1983 build up was just a cover to spend more than what we took in. Part of that agreement should have been significant constraints on running deficits.

[minavasht]

16. If I had $10 last year

and did not get any more this year, I should still have $10 this year.
Tax breaks don't "spend" money.

[Fumesucker]

9. Welcome to DU..

I hope you enjoy your stay.

[Luciferous]

11. Yeah well if people could find jobs and pay into the fund

this wouldn't be a problem. Maybe if we had Medicare for all, we could lower the cost of healthcare.

[Generic Other]

13. So really the first year the government wasn't able to divert the funds?

So we weren't robbed and they had to repay some of the money they previously stole? GOOD.

[OHdem10]

14. With high unemployment what can we expect. Millions not paying

Medicare Tax.

I would have more respect if the doomsayer explained
this.

Instead they leave us to believe we are going to have
permanent unemployment. The Job situation will not improve
and salaries will be close to minimum wage.

Calculating and throwing out the fear card as if
this if final may scare some but builds more distrust.

Create a crisis so we can cut Medicare.

[Fumesucker]

15. A lot of us here on DU think that what we have today is the "new normal"..

I'm one of them, I don't think the economy will ever recover to where it was before Bushie took office.

Energy costs alone are going to kill any strong economic recovery, as soon as the economy seems to take off a bit then the fuel prices rise precipitously thus halting the progress.

[sad sally]

17. No chance the President's deal w/Repubs last December is the accelerant for this news?

But whether or not the tax holiday makes economic sense, it represents an enormous change—and threat—to Social Security. There has never before been a payment from the nation’s general fund into Social Security. Maintaining the distinction between the two is critical, according to Nancy Altman, co-director of Social Security Works, speaking in the same press conference. Altman’s credentials include acting as Alan Greenspan’s assistant when he chaired the commission that amended Social Security in 1983. “I think it’s unfathomable that this is only going to last a year,” Altman said. “If this gets extended, we’ll have increasing costs. Congress will then have an unpalatable set of choices: Either extend funding and cut other spending, or cut Social Security.”

It’s ironic that this is being sold as a temporary cut in the context of extending the Bush administration’s supposedly temporary tax cuts. In fact, Republican legislators have already announced that, when it comes time for the payroll tax holiday to expire, they’ll be calling it a tax increase, and fighting to extend the decrease.

There’s even a great way to make it seem like a really scary increase: The tax holiday will take the worker’s share of payroll taxes from 6.2 percent to 4.2 percent, a 2 percent decrease. But when comes time for the holiday to end, it’s going to be called a 50 percent increase. That’s mathematically correct, since two is about half of 4.2. But that sounds much worse than an increase of two percentage points.

Not to mention that, as we’ve learned from the extension of the Bush tax cuts, there’s no traction for the argument that letting a tax cut expire is just a return to the status quo. “It’s easy to enact tax cuts, and very hard to turn them around,” said Barbara Kennelly, President and CEO of the National Committee to Preserve Social Security and Medicare.

“There’s no reason to do it this way other than as an assault on Social Security,” Kennelly said.

http://www.yesmagazine.org/new-economy/dont-compromise-social-securitydu