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CBO predicts Social Security cash deficits in 2010-11

Don't Tase Me Bro

Don't Tase Me Bro

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Hot Air has received a report from the Congressional Office Budget that has been sent to legislators, but not yet released to the public, showing that Social Security will go broke not in ten years, or 20 years, or 50 years, but next year. The report, which you can view here, shows Social Security running a deficit next year and then permanent deficits getting larger and larger starting in 2016.

Now you may recall that in 2005 then President Bush tried to reform Social Security by allowing younger workers to invest 4% of the payroll tax they pay into private accounts so that we would actually get back some of the what we put into the system since our parents are going to blow it all. You may also recall that the Democrats had a hissey fit and then went running around the country scaring old people into believing Republicans were trying to take away their Social Security, which anyone with common sense knew was a lie. Being the horrible communicator that Bush was, he naturally failed to make the case as to why reform was necessary and the Democrats got away with scaring grandma and the Republicans ran away from the plan with their tail between their legs being the usual wimps that they are. Harry Reid, in particular, said that there was absolutely nothing wrong with Social Security and it was rock solid for another 50 years. The Republicans just wanted to get rid of it because they've always hated it.

JIM LEHRER: Okay. Social Security: How does what Federal Reserve Chairman Greenspan said yesterday about personal savings accounts, how is that going to affect the debate in the Congress, particularly in the Senate?

SEN. HARRY REID: Well, I think it’s going to help what we’re saying. What we’re saying is there is no crisis. This is a manufactured crisis.

Social Security, if we don’t do anything, it’s safe for approximately the next 50 years. When I mean safe, people will draw 100 percent of their benefits.

And if we still decide to do nothing after that, people will still draw 80 percent of the benefits. We have to do something to take care of the out years, but it’s a manufactured crisis.

And the president, you know, all you have to do is see what some of the real right-wing groups have talked about over the years. They don’t like Social Security. They want toe get rid of it.

This is an effort to get rid of Social Security. What the president is talking about these private accounts — I was interested to see in his press conference, I read before I got here what he said in his press conference. He talks about $2 trillion.

Well, it’s going to be money we’ll save. The $2 trillion just makes Social Security worse. It doesn’t help at all the solvency of Social Security. Privatization is a bad idea. It’s been proven in Chile; it’s been proven in Great Britain.

We also know that he’s talking about benefit cuts — benefit cuts, as much as 40 percent. That’s very, very bad. Of course, we know that it would increase the debt significantly.

We need — there are a lot of problems we have in America today with pensions. We have airlines that are in effect going broke unless we give them some relief with their pension programs, but that’s separate and apart from what the president’s talking about with Social Security.

I believe that not only is it a program that is designed to do away with the most successful social program in the history of the country, but it’s also, I think, an effort to divert attention from issues that are important, from Iraq, from health care, from this huge deficit we have.

PBS
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I like at the end how Reid says Bush’s plan was an effort to steer talk away from the huge national debt we have. My, how his attitude has changed on that one.

So I wonder now what the excuse will be as this report becomes more public. It’s already been whipping through the Internet today.

Social Security is going broke next year. Medicare is set to go broke in less than ten years and somehow we will magically come up with a trillion dollars to pay for health insurance for five percent of the American population.
 
Don't Tase Me Bro said:
So I wonder now what the excuse will be as this report becomes more public. It’s already been whipping through the Internet today.
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Umm did you forget that we're in the middle of a big recession?

Don't Tase Me Bro said:
Social Security is going broke next year. Medicare is set to go broke in less than ten years
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Running a deficit is not the same as "going broke." In fact, social security could be made solvent for decades with a few minor tweaks: Make it means-tested, raise the retirement age, and eliminate the cap on taxation.

Don't Tase Me Bro said:
and somehow we will magically come up with a trillion dollars to pay for health insurance for five percent of the American population.
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An effective health care plan would help CONTROL Medicare costs.
 
What a mischaracterzation.....It has nothing to do with going "broke".

It means they will start dipping into the trust fund earlier.

That's what the trust fund was there in the first place for....to be used at a later date!

Do you even know how SS works?
 
SS right now is nothing more than a glorified ponzy scheme
 
Quote Dragon Dad:
What a mischaracterzation.....It has nothing to do with going "broke".

It means they will start dipping into the trust fund earlier.

That's what the trust fund was there in the first place for....to be used at a later date!

Do you even know how SS works?




You do understand there really is no trust fund just a bunch of IOUs?
 
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Don't Tase Me Bro said:
Hot Air has received a report from the Congressional Office Budget that has been sent to legislators, but not yet released to the public, showing that Social Security will go broke not in ten years, or 20 years, or 50 years, but next year. The report, which you can view here, shows Social Security running a deficit next year and then permanent deficits getting larger and larger starting in 2016.
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The change isn't quite that dramatic. Previously, the SSA trustees predicted that income would start falling short of outlays in 2016. Now, they're saying that it will happen for a 2 year period, right itself for a few years, and then go back into the deficits in 2016

dragondad said:
What a mischaracterzation.....It has nothing to do with going "broke".

It means they will start dipping into the trust fund earlier.

That's what the trust fund was there in the first place for....to be used at a later date!

Do you even know how SS works?
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Please explain where this trust fund is located and how Congress will tap it. This should be amusing.

Kandahar said:
Running a deficit is not the same as "going broke." In fact, social security could be made solvent for decades with a few minor tweaks: Make it means-tested, raise the retirement age, and eliminate the cap on taxation.
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To fix the $17.5T unfunded liability that Social Security faces will require those tweaks to be quite significant. Furthermore, making SS means tested and eliminating the cap on taxation will fundamentally change a core-principle of the SS program by changing it from a forced retirement fund for all to just another welfare program funded by the wealthy that benefits the poor.
 
Please explain where this trust fund is located and how Congress will tap it. This should be amusing.

Oh yes it's me who doesn't know what the trust fund is. Nor where to find out anything about it. Nor do I know what it would take to correct the long term deficit.

You caught me! I thought the trust fund was just a very big bank acount where we stored the money! Ha!

http://www.debatepolitics.com/break...ocial-security-payments-5.html#post1058210402

Only those who refer to SS as "broke" and just some "IOUs" or a "Ponzi Scheme" these are the serious people.....lol
 
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RightinNYC said:
To fix the $17.5T unfunded liability that Social Security faces will require those tweaks to be quite significant. Furthermore, making SS means tested and eliminating the cap on taxation will fundamentally change a core-principle of the SS program by changing it from a forced retirement fund for all to just another welfare program funded by the wealthy that benefits the poor.
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Honestly, if we're going to have social security at all (and I don't see any way to put that genie back in the bottle at this point), that's what it SHOULD be IMO. Wealthy people don't need a forced retirement; they're doing fine. It's just gratuitous spending that the government shouldn't be involved in.

I completely support anti-poverty programs to help people with health care, education, food, and (in some cases) even housing. But those things are necessities, whereas comfortable retirement is a luxury. As long as we have SS, I'd rather it be an anti-poverty program. I don't see any other rationale for its existence that makes any sense.
 
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You do understand there really is no trust fund just a bunch of IOUs?

You do realize if the US were to default on these what you call "IOUs", Social Security benefits will be the least of your problems?
 
dragondad said:
Please explain where this trust fund is located and how Congress will tap it. This should be amusing.

Oh yes it's me who doesn't know what the trust fund is. Nor where to find out anything about it. Nor do I know what it would take to correct the long term deficit.

You caught me! I thought the trust fund was just a very big bank acount where we stored the money! Ha!

http://www.debatepolitics.com/break...ocial-security-payments-5.html#post1058210402

Only those who refer to SS as "broke" and just some "IOUs" or a "Ponzi Scheme" these are the serious people.....lol
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I have no clue what you're trying to say here, nor do I understand what you think that link is proving.

dragondad said:
You do understand there really is no trust fund just a bunch of IOUs?

You do realize if the US were to default on these what you call "IOUs", Social Security benefits will be the least of your problems?
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And you do realize that in order to cash in those IOUs, we will be paying out of general revenues, right? Which is sort of the whole point of the entire thread? Which you very clearly don't understand, given your reference to "dipping into the trust fund"?

Kandahar said:
Honestly, if we're going to have social security at all (and I don't see any way to put that genie back in the bottle at this point), that's what it SHOULD be IMO. Wealthy people don't need a forced retirement; they're doing fine. It's just gratuitous spending that the government shouldn't be involved in.

I completely support anti-poverty programs to help people with health care, education, food, and (in some cases) even housing. But those things are necessities, whereas comfortable retirement is a luxury. As long as we have SS, I'd rather it be an anti-poverty program. I don't see any other rationale for its existence that makes any sense.
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I would be fully behind a complete retrofit of SS to turn it into a safety net that would be much smaller than what we have now. I just don't think the country would be okay with that.
 
dragondad said:
Only those who refer to SS as "broke" and just some "IOUs" or a "Ponzi Scheme" these are the serious people.....lol
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You're right, SS is no Ponzi scheme.

Ponzi schemes don't take your money from you without your permission, and they generally try to hide the fact that you won't be getting your money back.
 
RightinNYC said:
And you do realize that in order to cash in those IOUs, we will be paying out of general revenues, right? Which is sort of the whole point of the entire thread? Which you very clearly don't understand, given your reference to "dipping into the trust fund"?
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You obviously aren't familiar with the Monopoly™ theory of money.
 
RightinNYC said:
I have no clue what you're trying to say here, nor do I understand what you think that link is proving.



And you do realize that in order to cash in those IOUs, we will be paying out of general revenues, right? Which is sort of the whole point of the entire thread? Which you very clearly don't understand, given your reference to "dipping into the trust fund"?



I would be fully behind a complete retrofit of SS to turn it into a safety net that would be much smaller than what we have now. I just don't think the country would be okay with that.
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No the point of the thread is to spread typical scary tale about how Social Security is a big "ponzi scheme" and how it's going "broke"

You of course cannot make the case for this this using objective sources so you're left with taking exception to the phrase "dipping into the trust fund"....LOL

It must be hard to take when a right wing myth gets deflated in front of your very eyes.
 
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dragondad said:
No the point of the thread is to spread typical scary tale about how Social Security is a big "ponzi scheme" and how it's going "broke"

You of course cannot make the case for this this using objective sources so you're left with taking exception to the phrase "dipping into the trust fund"....LOL

It must be hard to take when a right wing myth gets deflated in front of your very eyes.
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What the **** are you talking about?

Go here, read a trustee report or two, and then come back here when you have a rudimentary understanding of how Social Security works and the problems that it faces.

edit: Nice. Now take your own advice and read what is in those reports.

Why is Reform to Improve the Social Security and Medicare Financial Imbalances Needed? Concern about the long-range financial outlook for Medicare and Social Security often focuses on the exhaustion dates for the HI and OASDI Trust Funds—the time when projected finances under current law would be insufficient to pay the full amount of scheduled benefits. A more immediate issue is the growing burden that the programs will place on the Federal budget well before the trust funds are exhausted.

The difference between the cost of scheduled benefits and tax income for the HI and OASDI Trust Funds is shown in Chart E, together with the Federal general fund revenues provided under current law for SMI. During 2009-17 for HI, general revenues (the red bars in the chart) must be used to cover the interest earnings and asset redemptions required to offset the shortfall of HI tax revenues. Similarly, general revenues cover these offsets for the OASDI deficits during 2016-37 (blue bars). In addition, general revenues pay for roughly 75 percent of all SMI costs under current law (green bars).

In 2017 and later for HI, and in 2037 and later for OASDI, there is no provision in current law that would enable full payment of benefits, once the trust funds are exhausted. If asset exhaustion actually occurred, benefits could be paid only up to the amount of ongoing dedicated revenues. Further general fund transfers could not be made to finance the deficits.
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Here are the facts that you don't seem to understand:

-Social Security, like Medicare, has an unfunded liability in the tens of trillions. While Medicare's is over $80T, Social Security's is a mere $17.5T.

-Social Security, like Medicare has been taking in far more than it has been spending for years, thus accumulating a "trust fund"

-Rather than actually saving that money, that money has been spent on other things, leaving the programs with IOUS.

-Starting this year for Medicare and in 2016 for Social Security, the amount being taken in will fall below the amount being spent.

-When that happens, the money for those programs will come out of the federal budget.

-Those trust funds will eventually run out entirely, Medicare's in 8 years and SS in 28.

-The practical result of this will be an immediate increase in spending out of the federal budget in the short term and significant cuts to both programs or increased taxes in the long term.
 
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Yes using the term "dipping into the trust fund" is just crazy!

[ame=http://www.google.com/search?hl=en&q=%22dipping+into+the+trust+fund%22+%2B+social&btnG=Search&aq=f&oq=&aqi=]"dipping into the trust fund" + social - Google Search[/ame]
 
dragondad said:
Yes using the term "dipping into the trust fund" is just crazy!

"dipping into the trust fund" + social - Google Search
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[ame=http://www.google.com/search?hl=en&safe=off&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=2SK&q=%22what+the+hell+do+you+think+that+means%22&aq=f&oq=&aqi=]"what the hell do you think that means" - Google Search[/ame]

The fact that other people use the same incorrect terms that you do doesn't make you any less wrong.
 
I cannot get the man to post his credentials as an expert in economics

Nor can I get him to post objective experts opinion backing up his "own conclusions" about how perilous the SS situation is.

That's because there is none.

Other than from right wing organizations and think tanks that want to destroy Social Security along with most other social programs.

Fearmongering is what they do.
 
dragondad said:
I cannot get the man to post his credentials as an expert in economics

Nor can I get him to post objective experts opinion backing up his "own conclusions" about how perilous the SS situation is.


That's because there is none.

Other than from right wing organizations and think tanks that want to destroy Social Security along with most other social programs.

Fearmongering is what they do.
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At this point, I'm forced to conclude that you're just ****ing with me and can't actually believe what you're saying.

See that quote in my post right before yours? The one pointing out "Why is Reform to Improve the Social Security and Medicare Financial Imbalances Needed?" Yea, that one is from the Trustees Report.
 
QUESTION 1: Can I count on Social Security to be there?

You can. Despite what you may hear about the system going broke, the funds from workers' payroll taxes will cover all retirees' payments until 2016 even if no changes are made to the current program. After that the Social Security Administration can cover full benefits until 2037 by cashing in its Treasury bonds from the Social Security trust fund. And when the bonds run out, income from payroll taxes would be enough to cover about 75% of payments for decades.

That said, the government is looking at ways to shore up the system. President Obama has talked about imposing Social Security payroll taxes on income over $200,000 (currently, earnings over $106,800 are exempt). Other possible fixes: upping payroll taxes, raising the retirement age, and scaling back payments in some way.

The good news for anyone in or near retirement: "People 55 and over are likely to see no change or just a marginal change in benefits," says actuary Bruce Schobel, who worked on the commission headed by Alan Greenspan nearly 30 years ago that fixed the system (at least until now). But even younger workers can rest assured that drastic cuts are unlikely.
what-you-need-to-know-about-social-security.html: Personal Finance News from Yahoo! Finance
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I think we are safe for now.
 
Don't he know SS payments come from the general fund? Ain't nothing but a bunch of IOU's!.....Money magazine...phssshaw!

Dern liberul media!
 
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I'm all waiting for Dragondad to drop the bomb on this thread. You know the post that will substantiate all his bloviating and totally shut down everyone else. And I'm just concerned sort of now. So much talk about how everyone else is wrong and fear mongering and how he is in the know...all this blustering but nothing in the way of substantiating posts.

It's like he's sitting there laughing maniacally because he knows the secret...only I'm not sure he does.

So I'm hoping he really has some goods to deliver because the setup is just too big. /popcorn
 
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