Current round of Social Security discussion

[campbell]

Originally Posted by bdschobel

Watch for an updated version of that issue brief, pretty soon.

Bruce

[campbell]

http://www.tuscaloosanews.com/articl...ty-health-care

TUSCALOOSA | Social Security could face a deficit within two years, according to U.S. Rep. Spencer Bachus who met with The Tuscaloosa News editorial board Tuesday.

“The situation is much worse than people realize, especially because of the problems brought on by the recession, near depression,” said Bachus, R-Vestavia Hills, in an interview with the Tuscaloosa News editorial board.

.

Bachus, the ranking member of the House Committee on Financial Services, said most people seem unaware of the impending crisis. He initially said Social Security could face "default" within two years, but his staff responded later saying the Congresssman intended to say "deficit."

“What this recession has done to Social Security is pretty alarming,” he said. “We’ve known for 15 years that we were going to have to make adjustments to Social Security, but we still thought that was seven or eight years down the road. But if things don’t improve very quickly, we’re going to be dealing with that problem before we know it.”

The solvency of Social Security, which provides pensions for people older than 65, has not played a major role in the current debate about health care in Congress. Bachus said it will not likely be addressed in any health-care bill the House eventually passes, although if a Social Security bailout is needed, it will invariably have an impact on government health-care programs.

[campbell]

http://www.rasmussenreports.com/publ...ocial_security

Forty-nine percent (49%) of U.S. voters say working Americans should be allowed to opt out of Social Security and provide for their own retirement planning.

A new Rasmussen Reports national telephone survey finds that 37% disagree and do not believe Americans should be able to opt out of Social Security. Fifteen percent (15%) are not sure.

A majority of voters under 50 say workers should be allowed to opt out. A plurality of those over 50 disagree.
....
Sixty percent (60%) of voters are not confident that the Social Security system will pay them all promised benefits during their lifetime, with 36% not very confident and 24% not at all confident. Thirty-eight percent (38%) express confidence in Social Security, including 13% who are very confident and 25% who are somewhat confident in the system.
....
Beyond making all income taxable, however, the tax option does not appear politically attractive. Voters by a two-to-one margin – 54% to 27% - don’t believe Social Security taxes should be increased to insure that all promised benefits are paid. Twenty percent (20%) are not sure which course is best.

Voters are fairly closely divided over whether Social Security is a good deal for working Americans, findings that have been largely the same in all recent surveys on the topic. A plurality (47%) say Social Security is a good deal, but 38% disagree. Fifteen percent (15%) are not sure.

A majority of voters over 50 say Social Security is a good deal for workers. A plurality of younger voters take the opposite view.

[campbell]

http://news.yahoo.com/s/ap/20090823/...smaller_checks

WASHINGTON – Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975.

By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.

"I will promise you, they count on that COLA," said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. "To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal."
....


Kennelly's group wants Congress to increase Social Security benefits next year, even though the formula doesn't call for it. She would like to see either a 1 percent increase in monthly payments or a one-time payment of $150.

The cost of a one-time payment, a little less than $8 billion, could be covered by increasing the amount of income subjected to Social Security taxes, Kennelly said. Workers only pay Social Security taxes on the first $106,800 of income, a limit that rises each year with the average national wage.

But the limit only increases if monthly benefits increase.
....


"Seniors may perceive that they are being hurt because there is no COLA, but they are in fact not getting hurt," Biggs said. "Congress has to be able to tell people they are not getting everything they want."

Social Security is also facing long-term financial problems. The retirement program is projected to start paying out more money than it receives in 2016. Without changes, the retirement fund will be depleted in 2037, according to the Social Security trustees' annual report this year.

President Barack Obama has said he would like tackle Social Security next year, after Congress finishes work on health care, climate change and new financial regulations.

[bdschobel]

Much ado about nothing. And let's not forget the 5.8-percent COLA effective in December 2008. That reflected price inflation that is no longer present. Prices dropped, but the beneficiaries still get those higher checks. No sympathy from me!

Bruce

[campbell]

Not disagreeing. But you never know what's going to cause political heartburn.

I went back up and bolded a particular statement. I agree that Congress has to tell people that no, they can't get the pony. Sorry.

It may be that people understand that now. The danger is an electorate voting themselves free skittles and unicorns, and any politician telling them no ice cream will get voted out. But perhaps a little bit of reality has crept in, with regards to living beyond one's means, whether in terms of individuals or a government. My hopes aren't high, but they're higher than they were previously.

[WellThen]

http://www.zerohedge.com/article/sst...august-deficit

Originally Posted by Zerohedge

In August the US Treasury had to borrow an additional $6 billion in the public market to finance the cash shortfall of Social Security. We already have too much paper for sale to fund the budget deficit. SS added to the supply problem last month.

Originally Posted by Zerohedge

In 2007 the SSTF produced a surplus of $191b that it invested in the US economy. This year it will be closer to $100b. Based on the current trends that surplus will be gone by 2012. Six years earlier than the Trustees forecast in June of this year.

I don't understand why taxpayers would need to borrow money to pay Social Security recipients if the SSTF has surpluses every year. How can there be a cash shortfall when there are $100B surpluses? Is Zerohedge disinforming/misleading (wouldn't be surprised), or does surplus not mean what I think it does?

[bdschobel]

The cash flow was expected to remain positive on an annual basis through 2016. The economic situation may have advanced the crossover date. I'm not sure when it is now. And even if the annual cash flow is positive, there can be monthly fluctuations. Maybe August was one of those.

The larger positive figures are not really cash flow at all. They include interest on the bonds held by the trust funds, but such interest is really just the issuance of more bonds. I prefer to look at actual cash flow, not including interest. Of course, even that supposedly simple concept gets pretty complicated, due to such things as government contributions on the earnings of Federal employees.

Bruce

[campbell]

From a political blog:
http://hotair.com/archives/2009/09/2...ts-in-2010-11/

Four years ago, George W. Bush attempted to reform the entitlement program Social Security, warning that the system was accelerating into collapse and would soon run deficits. Democrats scoffed and claimed the Social Security system was solid and wouldn’t have problems for at least 50 years, as Harry Reid told PBS’ Jim Lehrer in June 2005. Just last year, the CBO — under the direction of Peter Orszag, now budget director in the Obama administration — claimed that the first cash deficits in Social Security would not come until 2019.

Now, however, the CBO has determined that Social Security will run cash deficits next year and in 2011, and by 2016 will be more or less in permanent deficit mode. Hot Air has exclusively obtained the summer 2009 CBO report sent to legislators on Capitol Hill but not yet made public, which shows that outgo will exceed income for the first time since the 1983 fix on an annual basis in 2010
.....
The situation at Social Security is much worse than this administration and Democrats in Congress want to admit. They want to continue busting the deficit and creating new entitlements while the existing ones careen towards collapse. The new data shows that time has almost run out for reform. Seniors will still get their checks, but those will increasingly rely on injections from the general fund and not revenues from Social Security payments. At this point, one has to wonder when SSA becomes a flat-out Ponzi scheme, and who the suckers will be when it blows up.

[SirVLCIV]

Originally Posted by campbell

From a political blog:
http://hotair.com/archives/2009/09/2...ts-in-2010-11/

I really hope you can find another source on this that blows a little less hot air.

The political bias is blinding.