What do you think of this article about social security and medicare (link at the bottom)?

Answers:3   |   LastUpdateAt:2018-11-03 00:27:10  

Question
Baslilon
Asked at 2012-08-02 17:48:03
Pay attention to the third paragraph, so I say that is not actually in two separate trust funds of the obligations and the money is spent.

This article is from the Associated Press (AP)

Social Security and Medicare finances worsen (title of article)

Social Security and Medicare, both to the depletion of trust funds sooner because of recession

Martin Crutsinger, AP Economics Writer
On Wednesday May 13 2009, 12:12 am EDT

WASHINGTON (AP) - Social Security and Medicare are fading even faster under the weight of the recession, heading for insolvency years sooner than expected, the government warned Tuesday. Social Security will start paying out more in benefits than it collects in taxes in 2016, a year sooner than projected last year, and the giant trust fund will be depleted by 2037, four years ago, the trustees reported.

Medicare is even worse. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year, as it did for the first time in 2008. The trustees project that the Medicare fund will be depleted by 2017, two years before the date specified in last year's report.

Trust funds, which exist in paper form in a filing cabinet in Parkersburg, W.Va., are bonds that are backed by "full faith and credit" of the government, but not real assets. That money has been spent in recent years to fund other parts of government. To redeem the trust fund bonds, the government would have to borrow in public debt markets or raise taxes.

Treasury Secretary Timothy Geithner, the head of the trustees group, said the new reports were a reminder that "the longer we wait to address the long-term solvency of Social Security and Medicare, the sooner those challenges will be about us and the choices are more difficult. "

Geithner said that President Barack Obama is committed to working with Congress to find ways to control runaway growth of expenditure on public and private care health, taking into account the promise Monday by major providers of health care to reduce costs by $ 2 trillion over the next decade.

However, Republicans pointed to serious new assessments as evidence the Obama administration has failed to present a real reform the right to close the funding gaps.

"Instead of existing public programs in order right now, some are saying we should create a new government-run health insurance plan," said Sen. Chuck Grassley, the ranking Republican on the Finance Committee, in reference to the health of the administration proposals. "When you can not afford the public health plan we have already, does it make sense to add more?"

Republican leader John Boehner said the directors' report "confirms what we already knew:. Our nation can not afford to continue this reckless borrowing and spending spree"

The findings in the report of trustees, the annual checkup given the two benefit programs, did not come as a surprise. Private economists had been predicting that the dates of the programs that start to pay more than they receive and the dates the trust funds would be insolvent before due to the economic downturn.

The deep recession, the worst the country has suffered in recent decades, has resulted in a loss of 5.7 million jobs since it began in December 2007. The unemployment rate peaked at 25 years of 8.9 percent in April.

Fewer people working means less attention to the trust funds for Social Security and Medicare.

The Congressional Budget Office recently projected that Social Security will collect just $ 3 billion more in 2010 to be paid in benefits. A year ago, the CBO had projected that Social Security would have a much higher $ 86 billion cash surplus in the 2010 budget year that begins Oct. 1.

The trustees report projected that Social Security annual surplus would be "a sharp drop this year," then remain at a reduced level in 2010 and be lower in subsequent years are projected last year. The report said the Social Security surplus annual eliminated entirely in 2016, reflecting increased demand for the wave of 78 million baby boomers retire.

That means Social Security will rely on its trust fund to compensate the difference between Social Security taxes and benefits paid from 2016. The trustees projected the trust fund would be exhausted in 2037, four years before the 2041 date in last year's report.

At that time, annual taxes collected for Social Security would be enough to pay for three-fourths of current benefits through 2083. To take advantage of the trust fund, the government would have to increase borrowing or raise taxes because Social Security bonds exist only as bookkeeping entries.
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  • Answer This Question:What do you think of this article about social security and medicare (link at the bottom)?