Well this is just great..... Social Security and Medicare will run out of money in just over a decade

[a kennedy]

Social Security and Medicare will run out of money in just over a decade, a new report warned Monday, putting fresh pressure on Congress to address the nation’s financial health as federal debt rises and the population ages.

The trustees for the massive retirement programs project that Social Security will be insolvent by 2035, and Medicare by 2036, which would force benefit cuts. That’s better than many experts had expected, though — last year, federal actuaries said the programs could go belly-up sooner. The report said the roaring job market and low unemployment rate means more workers are contributing to the programs, shoring up their finances even while record numbers of retirees enroll for benefits.

https://www.washingtonpost.com/business/2024/05/06/social-security-medicare-taxes-2025/

[Arne]

1. Republican crooks like Rick Scott

will have to speed up the siphon.

[jimfields33]

2. The very age I turn 67. Wow. The timing on this.

I guess congress will have to address this at some point. I’m sure they will mess it up somehow. It wouldn’t be so bad if there were still pensions and/or people had fat 401K’s. Retirement will look very different for Gen X and beyond.

[dpibel]

11. Congress? Or the Republicans in Congress?

Who is it, exactly, you are sure will mess it up?

And the very year you turn 67!!

You are just right in the middle of everything, aren't you?

[jimfields33]

12. I am in the middle of everything.

I do believe congress is typically who sends bills to presidents so of course it’s the republicans in congress. Who else would it be?

[dpibel]

18. If that's what you meant, you should have said it.

And you do realize, I trust, that "Congress" means the House and the Senate. Do you believe the Republicans control both those bodies.

More to the point, I guess you are unaware of the ongoing, much discussed point that anyone who blames "Congress" is playing into right wing talking points, since the idea that it's just that undifferentiated body that is doing wrong really is pure bothsidering. I'm not sure what you forfeit by saying, "the Republicans in congress would mess it up somehow." Are you on a character limit?

[jimfields33]

22. I have seen millions of people talk about congress.

They never speak like that. Look at number 5 on this very page.

[dpibel]

59. You follow DU very closely

So I'm pretty sure you have seen more than one thread pointing out that blaming things on "Congress" is, at best, poor messaging.

There have, just in recent days, been discussions of how that framing lets the bad guys off the hook.

As for your viewing of what millions of people say, I'm very impressed that you have seem millions of people say something about any one subject! I'm not sure I've seen the opinions of millions of people, total, in my lifetime.

[jimfields33]

61. I will be more aware of my posting from now on.

I was a little defensive. But realize you were absolutely correct. I’ll do it correctly from here on out. Thank you.

[North Shore Chicago]

106. You have patience and grace, thank you. n/t

[jimfields33]

107. Have a great day!

[Marthe48]

43. The important thing here is that once again reports about SS and Medicare

being insolvent in our lifetimes.

Republicans in elected postions want to make it sooner rather than later. I know there are solutions to making SS and Medicare solvent, not sure if the solutions would ease the anxiety. I'm 71, and I don't know what to expect 11 years from now. OP is not the only person approaching retirement age who feels that the rug might get pulled out from under their plans and I think under the circumstances, using text shorthand to get a message posted on DU, can and should be overlooked. It is good of you to remind us to try to be concise, and I hope to remember to phrase every post as carefully as I possibly can.
If you are familiar with coments from the OP, they are good about staying on track and offering solid comments.

[Ritabert]

3. I heard that some cutbacks might be needed by 2035

...but not insolvency. How about letting the Feds pay back what they've stolen from their convenient piggybank?

[MichMan]

41. It's already been spent

Borrowed to fund record budget deficits

[dpibel]

58. Just like all other Treasuries have "already been spent"

You do know that the US government borrows money from many different places--basically anyone who wants to buy Treasury instruments. And that money is spent. To pay the government's bills.

So if the money owed Social Security has already been spent and is, thus, gone (which you seem to be saying), then the money owed to all domestic holders of US Bonds, and to any foreign government, and to anyone has "already been spent."

Are saying that the US government will default on the special Treasuries that evidence the debt to SS, but you are imagining that a default on that will have no effect on the value of all the other US debt?

I believe that is an incorrect belief.

[MichMan]

63. People who demand congress pay back all the money owed to SS or wanting a 'lockbox" don't understand it.

Never said there would be a default, did I? Just replying to those who think the money is sitting somewhere to be "paid back"

[dpibel]

64. The bonds are sitting there

to be paid back.

Maybe we're talking past one another.

I entirely agree that people who talk about how the money has been stolen are wrong. If that is what you are saying.

There's no pile of money anywhere.

There is a giant pile of US Treasuries evidencing the government's debt to SS.

Anyone who thinks (as Dubya Bush pretended to) that these are just a bunch of "worthless IOUs" does not understand how the bond market works.

I honestly have no idea whether you agree with that proposition or not.

[MichMan]

65. Thus why I posted that it has already been spent

"I entirely agree that people who talk about how the money has been stolen are wrong. If that is what you are saying.

There's no pile of money anywhere."

[dpibel]

66. Like credit card debt, right?

When the VISA bill comes, you make the payment, even though the money has already been spent.

Similarly, when bonds come due, the government doesn't get to say, "No pile of money here! It's already been spent!!" Rather, when the bonds are presented for payment, the government pays face value on the bonds. Usually by issuing more bonds, which money the government spends to make the payments on the old bonds.

Just trying to be clear what we're saying.

[NanaCat]

73. That's a myth

Myth #5: The government raids Social Security to pay for other programs

The facts: The two trust funds that pay out Social Security benefits — one for retirees and their survivors, the other for people with disabilities — have never been part of the federal government's general fund. Social Security is a separate, self-funded program. The federal government does, however, borrow from Social Security.

Here's how: Social Security's tax revenue is, by law, invested in special U.S. Treasury securities. As with all Treasury bonds, the federal government can spend the proceeds on a variety of programs. But as with all bondholders, Treasury has to pay the money back, with interest. Social Security redeems the securities to pay benefits.

This borrowing fuels the notion that the government is raiding or even stealing from Social Security and leaving it with nothing but IOUs. But the government has always made full repayment, and the interest increases Social Security's assets, to the tune of $66.9 billion in 2023.

https://www.aarp.org/retirement/social-security/info-2020/10-myths-explained.html

[dpibel]

91. Amazing isn't it?

How very hard this seems to be for people to understand.

George W. Bush: "It's just a bunch of IOUs!!"

Everyone who's paying attention: "So are the bonds held by private investors and foreign governments."

The amount of FUD around Social Security is amazing.

[Emile]

4. They been saying this shit for 50 years.

[NewHendoLib]

9. This.

[Srkdqltr]

10. Yes they have. Just a trick to gin things up

[LakeArenal]

16. ‼️

[leftstreet]

85. +1

[raccoon]

108. Yes, they have. In 1975, my boss said, "SS won't be worth a damn when we retire."

She was born in 1945, and me later, and we're both getting SS.

They've been spreading this shit for ages.

[CBHagman]

113. I heard the same thing around 1981 or so.

"You'll never see any of it," a professor said.

I'm not on Social Security, but the words have stayed with me.

[RANDYWILDMAN]

5. Congress knows what to do

Do it ! come on I dare you

[JohnSJ]

6. Give the Democrats a majority in both houses and the WH, otherwise

You will get everything you deserve coming with trump

[MOMFUDSKI]

7. Not if they take the cap

off!

[bahboo]

13. thank you...

[SarahD]

44. There we go!

We have known this for a long time.

[patphil]

8. Social Security is an easy fix. Just raise the limit of income that can be taxed.

I think 500K would get the job done for the foreseeable future.
Medicare's a bit more complicated, but future funding can be assured if the Democrats gain control of both Houses of Congress plus the White House.
Cuts in these vital programs should never happen.

[former9thward]

40. It is not an easy fix.

Which is why it is not done. If the taxable income level were raised then the benefit level would raise automatically which would cause even more funds to be spent.

[dpibel]

55. It's not a straight-line formula, as I'm sure you know

As it sits, there is not a one-to-one correspondence between dollars in and dollars out.

There are "bend points," which amount to progressive taxation for SS benefits.

IOW, there's nothing in the rules, or in the current implementation, that says there will be a one-to-one correspondence between contributions by high-earners and amounts paid out.

[former9thward]

75. People who contribute more have far more benefits than the average SS recipient.

As I am sure you know. This would escalate dramatically if the income level were raised.

[dpibel]

80. Bend points, man

It would escalate as dramatically (or undramatically) as the adjustment in the bend points.

Sorry you didn't know about this.

[former9thward]

83. I know a number of people in this category and what they collect.

You can throw out "bend points" all you want but it does not affect the amounts they are collecting. This will not solve the SS problem but of course everyone on the internet knows more than the SS trustees.

[dpibel]

87. Gotta admit

No idea what you just said.

You'll not be surprised.

You're saying the SS trustees are against raising the cap?

Evidence for that?

[former9thward]

88. Here is their conclusion:

The Trustees recommend that lawmakers address the projected trust fund
shortfalls in a timely way in order to phase in necessary changes gradually
and give workers and beneficiaries time to adjust to them. Implementing
changes sooner rather than later would allow more generations to share in the
needed revenue increases or reductions in scheduled benefits. Social Security
will play a critical role in the lives of 68 million beneficiaries and
184 million covered workers and their families during 2024. With informed
discussion, creative thinking, and timely legislative action, Social Security
can continue to protect future generations

https://www.ssa.gov/OACT/TR/2024/tr2024.pdf

Any evidence they support raising the cap?

[dpibel]

90. Any evidence they don't?

"address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them."

And to you that is evidence that they resist raising the cap?

ESP is cool!

[former9thward]

98. You are the one who brought up the issue of whether the trustees

favor raising the cap. I didn't. I don't know what they favor. I know they did not mention the issue in the report. But if they favored raising the cap why would workers and beneficiaries need "time to adjust to them"?

[dpibel]

112. This would be a nifty dodge

Were it not for the fact that it's pretty easy to read the thread and discover that it's an erroneous assertion.

[Gore1FL]

84. This assumes they would get significnatly greater benefits from the contributions.

It's a social program.

[former9thward]

86. They would.

Everyone on SS gets far more benefits than they contributed assuming they live a few years on the program.

If you were an employee, you typically need to collect benefits for about 3 to 5 years to be ahead of the game and receive more in benefits than the taxes you paid into the program while working

https://www.smobserved.com/story/2021/10/13/lifestyle/how-long-does-it-take-to-recoup-the-social-security-you-paid-into-the-system/6058.html

[Gore1FL]

92. Assuming we don't extend the top benfits past what they are now other than on a COLA basis

We should be groovy.

Reagan created a wealth gap. There isn't a law that states we cannot undo it.

[VMA131Marine]

102. Kind of like if you put money in a 401k

or IRA you can generally take more out than you put in because of the interest that accrues. The SS trust fund, by law, has to invest its funds in US bonds that do accumulate interest.

There are also a lot of people who put money in who die before they can recoup any of it.

[PufPuf23]

95. Tax corporate capital gains, siphon from inheritances, and tighten corporate tax avoidance schemes.

Funds to SSI and SSDI.

Does not raise wages.

Means to help high income parties pay to allow a safe life for others.

[former9thward]

99. Well, SS has never been set up that way.

It is set up to tax worker's earnings to pay current beneficiaries.

[PufPuf23]

110. But what I suggest is more egalitarian than status quo and solves any funding problems. nt

[VMA131Marine]

103. I'm not sure what you mean.

The SS benefit is capped above a certain income level. There is a maximum an individual can receive and a household maximum.

[former9thward]

104. Th benefit is capped because the upper income which is taxed is capped.

If the income level is raised the benefit level is also raised. That is the law.

[Captain Zero]

101. I say put a hole in the tax.

Apply Social Security Tax to all income to whatever it is now 135k? Then don't tax it from 135k to 500k then from 500k and up tax it again. Problem solved. It could be funded into perpetuity and no longer political football.

You could play around with the stop and start numbers.

Stop at 200k start again at 1.2mil.
Ok see what that does to the funds and adjust again. Adjust as and when needed. Could even add a provision that the funds can't be borrowed for war. Thats a separate tax on the rich as needed.

[MichMan]

105. What is the logic for exempting all income from $135k to 500K?

If the desire is to remove the cap, just remove the cap

[Rebl2]

14. After a person

makes around $250,000 (or so)a year, a person no longer pays into SS. Why in the world do they not up that amount to around $800,000 a year. It would certainly help SS out I would think.

[getagrip_already]

19. Its $160k.... not $250k

Just saying....

[Rebl2]

24. Thanks for info

$160,000 is way to low. Definitely should be higher than $160,000.

[drray23]

20. Its 168000 not 250.

Last year if you made more than 168000 , the 6.2 % for social security is not applied above that threshold. I am in this category. I will be happy to pay that on my entire compensation should congress manage to raise it. It's an easy fix to social security.

[MichMan]

42. You don't have to wait for congress.

People can pay in more if they like at any time

[dpibel]

93. To the extent that's an argument...

it's remarkably weak.

"If you oppose nuclear weapons, why don't you not pay taxes?????"

[MichMan]

109. Evading taxes is illegal

The poster said he would be happy to pay more if the cap were lifted. Just reminding people that paying in more than you owe is permitted. The IRS has a mechanism for doing just that.

[ProfessorGAC]

21. It's Far Lower Than That

For 2024, the SS wage cap is $168,000.
That's $82,000 worse than you thought!
I like your $800k figure. I also think that total compensation should be included. That way a 7 figure salary can't be configured as $200k salary and a million & a half in other compensation, thereby avoiding 5% of $600k.

[Rebl2]

25. $168,000

way to low. Needs to be far higher.

[ProfessorGAC]

30. It Does, Indeed

[captain queeg]

33. Very good point. All compensation should be used for calculations.

Lower paid workers are mostly paid by salary or per hour or something. They don’t have all the loopholes that high paid employees enjoy.

[ProfessorGAC]

34. Earlier Today A Post About Wendy's...

...closing stores. It included this:

As President and CEO at WENDY'S CO, Todd A. Penegor made $8,005,313 in total compensation. Of this total $1,134,384 was received as a salary, $1,588,725 was received as a bonus, $2,099,999 was received in stock options, $3,149,967 was awarded as stock and $32,238 came from other types of compensation. This information is according to proxy statements filed for the 2022 fiscal year.

Out of around $8 million in total compensation, his "salary" was 14%.
Even if the cap was eliminated totally, this guy would avoid SS contributions on 86% of total income.

[Silent Type]

32. The simple answer is that if we could raise taxes that much it needs to be distributed among many needs--

healthcare, infrastructure, childcare, climate change, bolstering SS and Medicare, jobs, education, now funding wars, deficit reduction, debt reduction, procecuting trumpsters, and add your own special projects.

If taxes were that easy to raise, would have been done long ago.

[Hermit-The-Prog]

36. Repukes sure find it easy to lower taxes when they're in power.

[Silent Type]

45. They do, and us middle- and lower-class people took our share of tax cuts. Raising taxes ain't as easy.

Wasn’t much of a cut for us, but we took it when we should have just said no to any tax cuts period.

Understand, not way I want it to be. But I think it’s reality as far out as I can see.

[Hermit-The-Prog]

48. bothsiderism doesn't work

[Silent Type]

49. What does that even mean when it comes to the odds of getting a big tax increase?

[WhiteTara]

15. If Congress would repay those IOUs

the funds would be flush.

[Rebl2]

26. Will never happen

[WhiteTara]

71. I know

[dpibel]

17. "Run out of money" and "benefit cuts."

Can you reconcile those two concepts?

If SS runs out of money, the benefits, I guess would be cut. To zero.

And yet, that's not what they're saying, is it?

What this really means is that, as of the currently projected date (and this scare story does come around at least once a year, y'know) the SS Trust Fund will be drawn down to zero, and benefits will then be paid out of current receipts.

Lower benefits, but still benefits.

Couple of additional fun facts:

That great big trust fund? Know where that came from? You're right! From us selfish, hoarding boomers, for whom the FICA withholding was right about doubled just as we entered the workforce, so that we would not bankrupt Social Security. Fun Fact: It worked! We paid for our parents and for ourselves.

Additional fun fact: As others on this thread have noted, the fix to this is not to kill SS. It is to adjust the earnings cap so that it is equivalent to the earnings cap when we all started paying for ourselves. Check it out: The percentage of earnings subject to SS withholding was much higher back then than it is now. A simple adjustment fixes it. No low-earnings person would have to pay an additional penny. The rate would not change. It would just be applied to a higher earnings ceiling.l

[Silent Type]

50. Actually, SS Trustee says if we do nothing by early 2030s, all SS beneficiaries take a 20+% cut.

You can read the SS Trustee’s Report.

[dpibel]

60. You agree with what I said

Did you think you did not? Or were you supporting my statement?

I said, "Lower benefits, but still benefits."

Which is what you just told me. I didn't even have to read the Trustee's Report.

What's more, this demonstrates that everyone's hair is catching fire, not over a need to totally re-fund SS. It's a question of how to make up a 20% shortfall.

As many on this thread have said (along with such noted ignorami as Bernie Sanders and Paul Krugman and Dean Baker) the simple solution is to raise the cap. That will make up the 20% without costing low-income people a solitary dime.

[Silent Type]

62. Wasn't disagreeing with you, simply putting a number on the potential cut if we do nothing.

Admittedly, starting the sentence with “Actually” might have sounded confrontational. Sorry.

[bhikkhu]

78. It's not when the SS trust fund is drawn down to zero

It's when we stop adding to the trust fund and will have to start withdrawing from it, as money-in will be less than money-out. Which creates a bunch of economic problems so is well worth avoiding, but at least stating the problem honestly would be a good start.

[dpibel]

81. This could be of interest to you

We're already drawing down the trust fund.

That's what it was created for: To pay for the baby boomers' retirement. And that's what it's doing. About the time the final boomers shuffle off the mortal coil, the trust fund will be exhausted.

Check it out.

It's not a question of when we start to draw it down. That horse done departed the horse housing.

[lynintenn]

23. Remember Al Gore's LOCKBOX

someone should have listened to him.

[misanthrope]

27. Ah, the dream of America's ruling class since the early 20th century

Little warms the hearts of American conservatives like the idea of further starving those already exploited and increasing the suffering of the downtrodden.

[Warpy]

28. They've been saying THAT all my life

My dad said the Republicans have said that since the 1930s, when we got it.

They're full of shit.

They've underfunded it every way they could. However, the labor shortage will continue as we Boomers retire and die off. Wages will have to rise and with that rise, more money will flow into the system. You might even see a reduction in the OASDI premium taken out of your paycheck, something Reagan jacked up six times so he could use the overpayments to cover up what his tax fuckups did to the treasury without inconveniencing the rich men who put him into office.

Remember, this is an insurance plan, no matter what Republicans have tried to call it. Their rich masters want it all in the stock market so they can look even richer. They don't need that. We need the insurance.

[former9thward]

38. Who is "they"?

This is a report by the Biden appointed trustees for SS.

[Warpy]

46. Maybe they want to raise that ridiculuously low earnins cap

or they haven't considered things like rising wages increasing the contributions. I don't know why they said that.

Maybe they're a bunch of Republicans, you just never know.

What you do need to know is that there is a 90 year history of saying this garbage.

[dpibel]

68. Biden appointees write for WaPo?

This is a newspaper article purporting to present a trustees' report.

The WaPo, not the trustees for SS, use such language as, "last year, federal actuaries said the programs could go belly-up sooner." Now, you may read "belly-up" as "paying 80% of benefits." But I think that's a stretch.

This particular instance is particularly good, because the WaPo is reporting this impending catastrophe while saying that the current report says we're better off than we were last year.

So I'd say that "they" could include: Newspapers looking to get eyeballs with sensationalistic headlines and breathless reportage, along with the business and governmental interests that have been trying to kill SS since it started.

Just a couple of nominees. Not sure that's who the person you asked had in mind. Just trying to help with some apparent confusion between a newspaper and the US Government.

[former9thward]

76. Well here it is since you seem to have a quarrel about how it was reported.

https://www.ssa.gov/OACT/TR/2024/tr2024.pdf

[dpibel]

94. Search "belly-up"

My search engine says it's not in that guvmint report.

See how that works?

[MichMan]

79. Reagan had a Democratic House for the entirety of his presidency

They passed everything he signed into law

[dpibel]

96. Remind me the compositon of the Senate

Remind me how many houses of Congress are required to pass a bill.

[MichMan]

100. Yes, Reagan had bipartisan support for all legislation signed into law

Both chambers of congress were equally responsible.

[Silent Type]

29. This has been known for over a decade. Obama tried to do something about it and was severly bashed by his own Party

even though people on the lower end of the SS totem pole would have gotten a substantial increase.

There is absolutley no chance the FICA cap will be lifted completely as many tout as the easy solution, although a small surcharge might be added assuming we haven't waited too long to get something done (with GOPer opposition).

Both parties have been kicking this can down the road too long, although I'd definitely point my finger at GOPers.

[dsc]

31. For decades SS ran a surplus which the rest of the government has gladly spent and used to keep deficits

lower than they otherwise would be. But now, when SS needs to get money back it is tough shit no money for you. Well forget that.

[GreenWave]

35. SO WAPO is suddenly the voice of reason?

What business is solvent for over a decade? Yet no doom and gloom for them.

Pro-tip: US businesses will do anything to sabotage a government program that is functioning well.

[Marcus IM]

37. "We have to look at cutting it all, SS, Medicare and Medicaid"

Good thing a certain politician has revised his position.

[littlemissmartypants]

39. Daily dose of FUD.

[dclarston13]

47. I find it ridiculous that there is a cap on wages that have to pay SSI

If you make a million a year you should pay the full percentage on that million.

[tinrobot]

51. Easy. Lift the cap. Done.

The solution is easy.

Getting it passed is hard.

[Rocknation]

52. Simple solutions: Medicare for all/single payer healthcare and deletion of the SS salary cap

Last edited Mon May 6, 2024, 11:53 PM - Edit history (1)

Both programs remain solvent forever and EVERYONE gets to pay in LOWER rates.


Rocknation

[marble falls]

53. Maybe if Congress stayed out of the piggy bank, and there was means testing so guys like ...

... TFG couldn't draw his check.

But this has been announced at least every couple of years since the eighties.

[FalloutShelter]

54. Cut the crap, raise the CAP!

Everybody!

[Runningdawg]

56. Every election we hear this. One of these days it will be true.

The day the church has been waiting for since I was a child. Either fight for us and we will feed you or die and burn in hell.

[lame54]

57. And Trump's health plan will be out in 2 weeks

[Tree Lady]

67. Roll of paper towels

and a bottle of bleach.

[Xolodno]

69. They'll probably do what they usually do.

Raise the retirement age after a certain year and lower benefits after that year as well. They just keep kicking the can down the road. Eventually they'll have to raise the tax cap and increase contribution. And it would also help out if they force a company match on 401k's with employee's above a certain level, part time or not.

[oasis]

70. Greedy Oligarch Pirates will snatch

away any and all entitlements they can get their paws on.
The people must hold their feet to the fire on the question.
PRESS THEM REGULARLY.

[Oopsie Daisy]

72. I'll likely be dead.

[edisdead]

74. Been hearing this my entire life.

[ecstatic]

77. It doesn't have to be this way

We still have some of the largest corporations on the planet that could be paying their fair share of taxes.

But noooo... according to the corrupt six supremes and the gop, it's a much better idea to treat Americans who have worked all their lives like shit.

Why do they say they love America? What do they love about it? Because when they're done making all their changes, the America that they claimed to love won't be there anymore. No longer a shining city on the hill... It'll be something gross. Shameful.

[dpibel]

82. "will run out of money"

Just plain wrong.

Nobody says that. Not even the Pete Peterson foundation and all its evil spawn.

[DemocraticPatriot]

89. it would NOT "force benefit cuts"--- that is the decision of Congress!

Will Republicans cut the throats of many of their own constituents who rely on those benefits??
(and cut their own throats??)

Or will they finally agree to save their own necks, and support reforms
which will require more fair contributions from the more well-to-do ??

If nothing changes before then, they will have a tough decision---
but before then, they will certainly attempt to screw far future beneficiaries,
who are much younger and still working....

[pansypoo53219]

97. greenspan's biggest bubble. KILL THE CAP.

[SupportSanity]

114. Reassuring news. I just applied. I figure that if Trump is elected,

SS being insolvent in 10 years will be the very least of my worries. And that is depressing.