Hi everyone, welcome back to Fiscal Friday. This is Bess Byers with A Generation Empowered. This week the Social Security and Medicare Boards of Trustees released their 2015 annual report and as you can imagine, I read that bad boy from top to bottom. So today we’ll look at the reports key findings, and why social security is anything but secure.
Finding #1: Social Security’s total trust fund reserves will be depleted one year later than previously predicted, in 2034. The administration’s total expenses have exceeded non-interest income since 2010, and the projected annual cash-flow deficit will average $76 billion between 2015 and 2018. Interest income and trust fund assets from the Treasury’s General Fund keep Social Security afloat until 2034. After that, taxes will cover roughly 75 percent of scheduled benefits through 2089.
Finding #2: Taxable earnings will go up… Because someone has to pay for this. Workers’ annual taxable earnings for social security benefits will increase from 11.3 percent in 2007 to an estimated 16.7 percent in 2038.
Finding #3: Medicare is mediocre. The Trustees predict the Medicare Hospital Insurance Trust Fund will be depleted by 2030. After that, HI will only have enough revenue to pay 86 percent of benefits. Supplementary Medical Insurance Parts B and D will be financed indefinitely due to current laws which provide funding from general revenues. Total Medicare costs are projected to grow from 3.5 percent the GDP in 2014 to 5.4 percent of GDP by 2035. Sorry grandma, and more importantly, sorry Millennials.
Last year nearly 60 million Americans received OASDI benefits. This number will only increase as baby boomers retire. Even the Trustees Report admits, “projected long-range costs are not sustainable with currently scheduled financing.” Legislative action must be taken ASAP to allow for a broader range of solutions and avoid disruptions in payments to beneficiaries.
Last week President Obama spoke at the White House Conference on Aging to discuss the importance of retirement. According to the president, “one-third of the workforce lacks a retirement plan.” Unfortunately Obama’s solution is government intervention through mandated IRA’s because “middle class,” “fair play” and “progress.” Maybe he hasn’t heard of that boondoggle called Social Security?
Once again, I’d like to remind millennials we are the largest generation in American history. Liberals, Conservatives and Moderates agree, we won’t get all our social security benefits back… If any. At what point does my docile generation rise up? Why should the federal government forcibly take our income under the guise of retirement!? Let us keep our earnings and have the freedom to save for our future.
So before you point fingers and yell “Republican!” let’s get two things straight. First, I’m a Libertarian. Second, all my numbers came directly from the Social Security admin. So don’t hate the player, hate the politicians.
Before I bounce, I need to call out the Huffington Post for their hack job journalism. Nancy Altman, Co-director of Social Security Works, wrote an article saying the report proves “Social Security has a large and growing surplus, and its future cost is fully affordable.” She includes two skewed graphs before jumping on the Bernie wagon, suggesting we expand Social Security by “requiring millionaires and billionaires to pay their fair share.” Altman compares Social Security spending and our GDP to military spending, so I guess liberals support war money when it’s convenient for their message. She also brags we have funds for the next 15 years, but doesn’t mention in 19 Social Security is kaput. The Huffington Post blatantly ignores the Trustees’ dire warning in lieu of pushing an agenda.
Millennials, let’s hear your thoughts on Social Security. Our generation will face this financial mess. How do we solve it? Increase payroll taxes or the age at which people can collect benefits? Do we decrease Social Security payments? Should we scrap the program entirely and privatize it? Sound off in the comments, and while you’re at it, subscribe to my channel.
This is Bess Byers, signing off, and remember, it’s your generation and you’re empowered!