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Social Security and Medicare are among the entitlements that are consuming an ever growing portion of the federal budget as the baby boom generation starts retiring.
Rep. Paul Ryan, R-Wis, has a plan for younger workers to switch to subsidized insurance, which sounds like a pretty good plan. Insurance companies negotiate contracts with hospitals and set reasonable doctors’ fees. Medicare is less discriminating, but politicians always seem to want to undercut the pay of doctors to the point that they don’t want to take Medicare patients. Subsidies — in the neighborhood of $15,000 — can buy some pretty good insurance.
In 2010 there were 47.5 million Medicare beneficiaries. In 2030 that will grow to 80 million, according to USA Today.
But what to do about Social Security? In 2010, there were 54 million people receiving Social Security benefits. Our preference would be for the government to open up federal land for oil and gas drilling. The resulting royalties would be enough to cover Social Security and reduce the debt.
Another option would be to increase the cap from $110,000 to $215,400. That would cover 90 percent of earning and would reduce the shortfall 36 percent, according to the June Bulletin of AARP. But eliminating the cap entirely “would end almost all the shortfall.” That would be a millionaires tax that would produce some real benefits.
Also, raising the retirement age to 68 would reduce the shortfall by 18 percent, according to AARP.
Some changes are in order. In 21 years the federal government will only be able to pay three-fourths of the promised benefits. It’s a crime that Congress has been spending the money that comes in for Social Security.
There are those who always try to claim that Social Security pays recipients more than they put in, but that’s a specious argument that doesn’t consider the interest earnings a person would have had if he had taken the 6.2 percent employers have been paying along with the 6.2 percent you have been paying and put it in the bank beginning with your first job. We would all be millionaires.
Unfortunately Social Security is not a saving plan with compounding interest. But don’t let anybody tell you that you make too much and it should only go to the poor. You paid for it. You earned it. You deserve it. Congress owes it to the American people to make Social Security and Medicare solvent.
What’s taking up all the money is the radical expansion of Medicaid and the 2009 stimulus bill that increased the maximum benefits for food stamps. That stimulus bill also gave states more money to administer the program. The result is it added 11.2 million more since 2009. There are almost as many people on Supplemental Nutrition Assistance Program as there are Medicare recipients — 44.7 million in fiscal year 2011 at a cost of $75.3 billion. Since 2008 the increase in people on food stamps has been 28.2 million and the cost has gone up $37.6 billion. This is a program that has gone out of control.
It’s time to dial back food stamps, quit extending unemployment benefits forever, quit using Medicaid as a backdoor universal health care plan and act to save Social Security and Medicare.
The Mountain Democrat does not necessarily condone the comments here, nor does it review every post. Read our full policy
Dink LaneJuly 07, 2012 - 3:09 pm
Let's see if I can explain in 7th grade terms.... Social Security --> paid by workers ( $$$ sit in a pot (SS Trust Fund)..... MORE $$$$ are coming in than GOING OUT.... Until 2022...... Wall Street wants to PLAY with those $$$$$ ....... Congress has pulled $$$$ out of fund to pay for TAX-Shortfall (YOUR payroll taxes paying for missing $$$ while people OVER $106,000 DO NOT PAY ANOTHER DIME)
Dink LaneJuly 07, 2012 - 3:23 pm
Another point: FOOD STAMPS.... Many states have STOPPED all welfare payments ($$$ went into STATE's pockets).... The poor didn't suddenly disappear. In the south and some Midwest states the only assistance comes in FOOD STAMPS (Federal govt)....That's why there are MORE people on Food Stamps now.... PLUS Losing jobs --> Foreclosure --> homelessness --> hungry children... It has NOTHING to do with SSI or OASI (Old-Age and Survivors Insurance)..... You want to dial back these programs.....Dial FOREWARD Jobs -- Poor people SPEND $$$$..... Not a single JOB was generated by an "Abortion Bill" and the Republicans pass -- 19 Abortion bills.. and not one jobs bill
TerryJuly 07, 2012 - 9:42 pm
Dink The SS Trust Fund is pure fiction. SS is a Ponzi scheme. Money paid in today goes out today. In 1984, we began overtaxing ourselves and depositing the surplus into the general fund where it was promptly spent. This theoretical trust fund has about $2.4T in paper IOUs. Unfortunately there are another $14T in IOUs that are owed to foreign countries and individuals. In essence, the country is broke. So the only way to recoup the $2.4T is to tax us all over again. In essence we now must pay twice for the same benefit. Not much of a deal in my book. Had we privatized the excess payments starting in 1984, everyone of us would have a tidy nest egg that would have grown at 5-8% compounded interest. The nest egg would be ours to bequeath to our children should we die early unlike SS in which the government benefits from an early death. I challenge you to do the math. Get your SS statement and calculate the compound interest. See how much you would have personally saved until retirement. Then consider that the money would still be drawing interest while you were withdrawing portions of it monthly to live on. If you foolishly lost the money, the culprit can be found in the mirror instead of the halls of Congress. I trust myself with my own money far more than I trust 537 elected officials in Washington.
Veterans benefits make them parasites" Paul Ryan R-WisJuly 07, 2012 - 10:25 pm
In a speech in Virginia Ryan told the crowd, “veteran’s benefits make them parasites." He was talking about our US Veterans, the ones who volunteer, risking their lives and limbs, those veterans......Paul Ryan, everything that’s wrong with our once Proud Republican Party.
NancyJuly 08, 2012 - 8:54 am
Here is how the government can fix Social Security and Medicare: 1. Give me back all the money I paid into it plus a little interest. I promise to never make an issue out of SS and Medicare ever again. 2. Put the politicians on SS and Medicare and take away their generous retirement and medical benefits. These programs will be fixed overnight. :)
TerryJuly 08, 2012 - 10:02 am
Nancy, they can not send the money back. Your FICA went to pay current retirees. What was left went into the general fund and was used to buy guns and ammo, or was redistributed to the poor, corporations, and congressional retirement. The only way to get the money back is to tax you again so they can give it back or to tax your children. Your second point is good. Congressional retirement should be SS and Medicare only.
Dink LaneJuly 08, 2012 - 12:22 pm
"The SS Trust Fund is pure fiction. SS is a Ponzi scheme. Money paid in today goes out today." ........ According to the ss.gov/oact & gpoacces.gov.....The Trust fund is a BANK Wall street wants to take over .... $2.7 trillion is OWED to the Trust Fund (middle-class workers have paid into) because CONGRESS robbed it to KEEP from RAISING TAXES on the rich guys who AREN'T paying into it... Nancy...You don't pay into FICA with your INVESTMENTS and any money over $106,000.... So if you don't want to pay into SS live on your investments...and not middle-class wages...
NancyJuly 08, 2012 - 2:10 pm
Terry, my comments were made in jest. Comment #2 has about as much of a snowball's chance as comment #1. Dink Lane, who will be able to live on their investments? Have you not heard that Obamacare will raise the dividend tax to over 40%?