Can­di­dates whistling through po­lit­i­cal grave­yard on So­cial Se­cu­rity, Medi­care chal­lenges

Starkville Daily News - - FORUM -

STARKVILLE – Both here in Mis­sis­sippi and na­tion­ally, con­gres­sional can­di­dates are mak­ing no mention of the se­ri­ous chal­lenges faced by the present it­er­a­tions of the So­cial Se­cu­rity and Medi­care pro­grams. Baby Boomers poised to col­lect the en­ti­tle­ments are de­cid­edly not ig­nor­ing the is­sues, but are ner­vously reading dis­turb­ing warn­ings that fis­cal danger looms.

The So­cial Se­cu­rity and Medi­care Trustees re­leased their an­nual re­port ear­lier this month and doc­u­mented the fis­cal re­al­i­ties of the two pro­grams. The lat­est pro­jec­tions show that Medi­care Hospi­tal Trust Fund (Part A of Medi­care) will be de­pleted in 2026, three years ear­lier than pro­jected last year.

At the point, trustees project that Medi­care could con­tinue to pay out 91 per­cent of cur­rent ben­e­fits in 2026, then see that de­cline to 78 per­cent in 2039, then re­bound to 85 per­cent in 2092. Bot­tom line, less Medi­care ben­e­fits to cover sky­rock­et­ing health­care costs.

So­cial Se­cu­rity Dis­abil­ity in­sur­ance is pro­jected to ex­pe­ri­ence sim­i­lar dif­fi­cul­ties in 2032, which the So­cial Se­cu­rity re­tire­ment pro­gram is pro­jected to be im­pacted in 2034 – that is to say that the So­cial Se­cu­rity Trust Fund will de­plete its reserves by 2034.

What does that mean? It means that So­cial Se­cu­rity will in 2034 not be able to pay ben­e­fi­cia­ries in full and that ben­e­fi­cia­ries will face a 21 per­cent across the board ben­e­fit re­duc­tion from num­bers shown on the an­nual ben­e­fits pro­jec­tions from the So­cial Se­cu­rity Ad­min­is­tra­tion.

Those facts mat­ter only to vot­ers who have plans to ac­tu­ally re­ceive So­cial Se­cu­rity and Medi­care ben­e­fits from the same fed­eral govern­ment who de­ducted taxes sup­pos­edly ded­i­cated from their pay­checks ex­pressly for the pur­pose of fund­ing the pro­grams.

What re­tirees and Baby Boomers re­ally have in terms of that “nest egg” they thought they had in So­cial Se­cu­rity and Medi­care when FICA was be­ing de­ducted from their pay­roll checks is in re­al­ity a pile of con­gres­sional IOUs in a U.S. Trea­sury Depart­ment Bureau of the Pub­lic Debt's fil­ing cab­i­net in Park­ers­burg, W. Va. The bonds aren't backed by the cash we gave the govern­ment from our pay­roll de­duc­tions. SID SAL­TER


They are backed by the “full faith and credit” of the fed­eral govern­ment. But Congress long ago spent the ac­tual as­sets to fund other govern­ment func­tions and to re­deem the bonds, the govern­ment would now have to bor­row money or raise taxes.

Con­ser­va­tive Repub­li­can former So­cial Se­cu­rity and Medi­care pub­lic trustee Charles Bla­hous re­cently wrote: “What's re­ally im­por­tant is the mag­ni­tude of the (So­cial Se­cu­rity and Medi­care) short­falls and the dif­fi­culty of cor­rect­ing them, which grows each year. Whether de­ple­tion is dis­tant or near, the prob­lem had to be con­fronted sooner rather than later. Un­for­tu­nately, later has come sooner than the trustees thought it would.”

Demo­cratic former chief economist to former Vice Pres­i­dent Joe Bi­den took this pos­ture on the en­ti­tle­ment pro­grams: “What is the way for­ward? Surely, the sooner we tackle th­ese short­falls, the bet­ter. Wouldn't it be awe­some to avoid yet an­other one of those fis­cal cliffs that we know is com­ing but are too dys­func­tional to ad­dress un­til the last minute, when we kludge to­gether some patch?”

The bot­tom line is that So­cial Se­cu­rity and Medi­care as we know it to­day is on bor­rowed time. “Sav­ing” the pro­grams – and even that con­cept is a stretch in the cur­rent fis­cal and po­lit­i­cal cli­mate in this coun­try – will re­quire ad­di­tional govern­ment rev­enues and aus­ter­ity mea­sures both in terms of health­care costs and in pro­gram eli­gi­bil­ity.

In other words, the en­ti­tle­ments have to be re­formed at the same time that new rev­enues are found to shore up the short­falls. And yet, while cruis­ing through con­gres­sional elec­tions, vot­ers aren't having con­ver­sa­tions with the can­di­dates about th­ese two vi­tal is­sues – and that fact is a true elec­toral mys­tery.

Sid Sal­ter is a syn­di­cated colum­nist. Con­tact him at sid­salter@sid­

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