Posted on 01/21/2010 6:12:29 AM PST by Libloather
Obama Cuts Deal that Will Reduce Social Security, Medicare and all Entitlements
by James Ridgeway
20 January 2010
The Obama administration literally collapsed yesterday. Any pretense of liberal change was washed away in a closed door deal to cut entitlements. While the Massachusetts voters were casting their ballots to install the upstart Republican Scott Brown to Ted Kennedy’s Senate seat, President Obama was hammering out an agreement with Democratic leaders to support a plan to issue an executive order to cut entitlements, including Social Security, Medicare and Medicaid.
The effect of this plan, if accepted by Congress, will be to override the already weakened health care reform legislation.
It represents a capitulation to conservatives in both parties, and would leave Democratic liberals accepting unconditional surrender not only on health care, but on the most basic of all New Deal programs. It reaches far beyond actions by the Reagan and Bush administration.
As the Washington Post explains this morning:
Under the agreement, President Obama would issue an executive order to create an 18-member panel that would be granted broad authority to propose changes in the tax code and in the massive federal entitlement programs — including Medicare, Medicaid and Social Security — that threaten to drive the nation’s debt to levels not seen since World War II.
(Excerpt) Read more at baltimorechronicle.com ...
Under the agreement, President Obama would issue an executive order to create an 18-member panel that would be granted broad authority to propose changes in the tax code and in the massive federal entitlement programs — including Medicare, Medicaid and Social Security
Oh yeah. Well think again Barry
~~~ all insults intended ~~~
It goes beyond that - a pox on all of them. I remember when they raised the contribution rate for social security over 30 years ago. This was supposed to ensure that there would be enough money to support the baby boom retirees. They also raised the age for full retirement.
For years, they collected more than was spent on social security and put it in the trust fund. They immediately wrote an IOU to the trust fund and spent the money.
They also continually found ways to let people who never paid in to social security to draw it -further undermining the system.
If they had let me invest even a portion of that money, I would not need their stupid social security anyway. Now they have essentially borrowed money to distribute to the fat cats, and they are going repay it on the backs of the poor and elderly.
Plenty of politicians from both parties have participated in this fiasco.
This is what happens when liberals run out of other peoples money!
Well then the 2010 and 2012 RNC ads are just waiting to be made. You take what was said in 2005-06 by the dems about how social security wasn’t in trouble and then put it next to what they say now, then ask if you “trust” this person to fix it? It would’ve been easier to fix a few years back but I do not trust the dems to do anything that doesn’t benefit them somehow or takes control, so hands off.
SS is a pay as you go system. The 2041 or 2037 dates are when the last IOUs from the SS Trust Fund are cashed in using money from the General Fund. The system is unsustainable unless you raise taxes or cut benefits or both.
I was on the committee in 1983 the last time we reformed it. We raised the payroll tax, we raised the age because we knew the baby boomers were coming. So no, Social Security is not going bankrupt. Do we have a problem right now? We have a fiscal problem. We’ve got a deficit problem
It was "reformed" by raising taxes and reducing benefits. That just kicks the can down the road. The 1983 "solution" P.L. 98-21, (H.R. 1900) was supposed to make SS solvent for 75 years. Instead, 33 years later we will be back in the same situation, i.e., in 2016. We have a structural problem of having fewer workers for every retiree (2 to one in 2030 compared to 3.3 now and 16 in 1950) and the fact that SS COLA increases are not linked to revenue. The system is on automatic pilot.
Do we have a problem right now? We have a fiscal problem. We’ve got a deficit problem. We don’t have a Social Security problem because we have that surplus. Think of the good years we had in 2005, 2006, 2007, 2008. So much more money was coming in to Social Security from payroll taxes than was going out. That built up the surplus. So that’s the base we have right now. That’s why we can go up to 2037 and say Social Security can still pay its benefits.
Pure sophistry. This is the way SS works. The "surplus" is just the difference between benefits payed out and what is left over each year. The "surplus" is deposited into the General Fund. In return, Treasury issues non-market T-Bills in the amount of the "surplus" (IOUs) and they are deposited into the SSTF. The SSTF represents an unfunded liability, which is why it is included in our current $12.1 trillion national debt under intragovernmental holdings.
This year and last, some of those IOUs are being cashed in because there is no surplus. It is temporary due to the economic downturn. But by 2016, SS goes permanently into the red, i.e., it will be paying out more than it is taking in. The SSTF really just represents the full faith and credit of the USG to pay SS benefits. It is a gimmick meant to fool and deceive.
SS is unsustainable as currently structured. The data are clear. It is a Ponzi scheme. Those of us collecting benefits now are getting far more than we ever payed into the system.
Sounds like a plan to get a lame duck congress to shove a telephone pole down our throats.
That simply is not true. I personally have received far more back than I ever paid into SS and that includes the employer contribution. And my wife receives a payment and she never paid anything into the system.
Please tell me that Republican lawyers are all over this!
And the wage base [cap] for the tax has rised from $3,000 in 1937 to $106,800.
This also is true.
Well said.
Early on, until his staff no doubt whispered in his ear, the Obummer was always dropping the term “the non productive citizens”...of course, seniors, the disabled, were who he meant.
Of course, Juan Gonzoles and his wife and 8 kids will get their medical care.
” To cut and reduce SS for seniors in any election year would be the kiss of death for those who support it.”
True. But eventually SS will be cut because there’s not enough money. So if I thought BO had a sincere plan to do that without all the nasty extras the left throws into everything, I would support it (and I’m close to seniorness).
we are talking averages here- many won’t get what they paid in- many die before they ever start receiving- you personally are getting more- others too- however, the average is that most won’t get what they paid in- yes, some individuals rack up big bills, however, it’s offset by those that don’t and won’t receive anyhting
[[SS is a pay as you go system. The 2041 or 2037 dates are when the last IOUs from the SS Trust Fund are cashed in using money from the General Fund. The system is unsustainable unless you raise taxes or cut benefits or both. ]]
This isn’t true- the system is not unsustainable as it is- it’s unsustainable becuase congress is spending it when they hsouldn’t be touching it at all- that’s how the banks got in trouble- spending money (on the premise of ‘making money’) that wasn’t their’s to spend- they lost money, and the people putting their money in the banks were the victims
[[But by 2016, SS goes permanently into the red, i.e., it will be paying out more than it is taking in.]]
Your predictions are based on CURRENT economic climate- not on average economic climates which fluctuate (soemtimes wildly- bust and boom)
[[We have a structural problem of having fewer workers for every retiree (2 to one in 2030 compared to 3.3 now and 16 in 1950) and the fact that SS COLA increases are not linked to revenue. The system is on automatic pilot.]]
‘2030’? Based on who’s calculations? Again- timing- We’re currently in a MASSIVE unemployement period- peoplel osing jobs all over the place in them illions- is that prediction based on CURRENT unemployment? Or the averages over he years? I suspect it’s based on current unemployement, because as stated- the fear-monguering “SS is goign bankrupt by year... (fill in the blank)” claims keep changing year to year
[[SS is a pay as you go system. The 2041 or 2037 dates are when the last IOUs from the SS Trust Fund are cashed in using money from the General Fund. The system is unsustainable unless you raise taxes or cut benefits or both.]]
Andby the way- the more cuts are made, the more peopel will be FORCED to go back to work (those hwo currently are not working and probably should be ie: a lot on Medicaid, soem retirees who are stil lfit etc), forced to pay into the system, the more $$ SS will have again- it’s an equalizing system- right now, many don’t really have to work, and so don’t, but when times get tough, they iwll be forced to work, and paying back into the system.
SS was set up both as a system to help those who retire, AND to help the needy who for various reasons truly can’t work- the problem is that a lot of people milk the system, claiming dissability, who have no right being on it, which also drains the system- however, had congress kept htier greedy fingers out of the till, we would have had a sustainable system that covered even those deadbeats who could but refused to work- again, the system itself isn’t broken, and is a good system that TRULY does help those who need it, and is somethign I htink most citizens don’t mind paying into to ensue those hwo can’t work are helped-
But whatever- doesn’t nmatter what we say or htink- Congress has their eyes on the $$ and they aren’t goign to stop until they get it one way or another
It is a Ponzi scheme. Those of us towards the top of the pyramid make out. Those at the bottom don’t. I was referring to those who are already receiving SS benefits. The CBO study provides the data. It is clear. There is a reason why seniors love SS and Medicare and will fight tooth and nail to keep the benefits. And they vote in higher percentages than the young. By 2030, one in 5 Americans will be 65 or older. These has huge consequences, politically and economically.
You don't seem to understand how the system works. Congress could have borrowed the money from the public [including foreign investors] or from the SS "surplus." In the arcane world of federal budgeting, Congress did not take any money from SS. They provided the SSTF with interest bearing T-bills in return for the "surplus" SS money. Here is how the SSTF is administered and its rationale.
The dirty little secret is that SS is really a form of income tax and a stealth way to hide the true nature of our deficits. It is a funding mechanism. The idea that the SS surplus shouldn't be touched is nonsense. Should it be placed under a matress? The surplus is invested in interest bearing T-bills.
Your predictions are based on CURRENT economic climate- not on average economic climates which fluctuate (soemtimes wildly- bust and boom)
It t may flucuate by a few years one way or another, but very little. The 2016/2017 dates have been around for some time. The figures are based primarily on demographic and actuarial data. Just like insurance policies can be based on flucuating data, SS is pretty easy to predict. It does not vary widely.
2030’? Based on who’s calculations? Again- timing- We’re currently in a MASSIVE unemployement period- peoplel osing jobs all over the place in them illions- is that prediction based on CURRENT unemployment? Or the averages over he years? I suspect it’s based on current unemployement, because as stated- the fear-monguering “SS is goign bankrupt by year... (fill in the blank)” claims keep changing year to year.
Why don't you read the trustees report and see how the data are calculated. It is pretty cut and dried with three basic scenarios. We could get hit by a meteor or an earthquake could swollow California. Any projection cannot account for all circumstances or possibilities, just the mostly likely ones. We can only plan based on what we know or what is likely to happen. SS revises its estimates yearly. They have not varied widely.
"Because the future is inherently uncertain, three alternative sets of economic, demographic, and programmatic assumptions are used to show a range of possibilities. The intermediate assumptions (alternative II) reflect the Trustees' best estimate of future experience. The low-cost alternative I is more optimistic for trust fund financing, and the high-cost alternative III is more pessimistic; they show trust fund projections for more and less favorable conditions for trust fund financing than the best estimate. The assumptions are reexamined each year in light of recent experience and new information about future trends, and are revised as warranted. In general, greater confidence can be placed in the assumptions and estimates for earlier projection years than for later years. The statistics and analysis presented in this Summary are based on the intermediate assumptions.
Nonsense. Even if more people go back to work, that will be more than offset by the doubling of our senior population in the next 20 years and the fact that people are living longer. And inflation will increase benefits payed and hyperinflation will drive costs thru the roof. SS is not an "equalizing system." We have increased the tax rate more than 40 times since the system started in 1937 and have raised the earnings cap every year. Benefits are not tied directly to revenue. They are distinctly separate.
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