SS, Medicare, Medicaid are running out of money sooner than previous estimates

[bdgan]

The two major reasons are:

• Biden expansion of Medicaid benefits and eligibility
• Biden's SS Fairness Act that expanded eligibility for government employees.

SS & Medicare trust funds are now expected to run out of money in 8 years.

What's the solution? So far all I've heard from dems is that we need higher subsidies and no work requirements which takes us in the wrong direction. Some might want to eliminate the SS tax threshold but $176k hardly makes somebody a billionaire. It would also add significant cost to corporations, hospitals, etc.

 

[baltimorened]

The two major reasons are:

• Biden expansion of Medicaid benefits and eligibility
• Biden's SS Fairness Act that expanded eligibility for government employees.

SS & Medicare trust funds are now expected to run out of money in 8 years.

What's the solution? So far all I've heard from dems is that we need higher subsidies and no work requirements which takes us in the wrong direction. Some might want to eliminate the SS tax threshold but $176k hardly makes somebody a billionaire. It would also add significant cost to corporations, hospitals, etc.

based on the inactivity in the government on the issue you'd think they have some plan for funding up their sleeves...but we know that's just a dream.

 

[dpic73]

There are other reasons for it too as less people are having babies due to affordability issues and people are signing up for benefits sooner because they expect Trump to fvkk it up. Not to mention when you deport all the immigrants who were paying into the fund without the ability to receive benefits, a perfect storm is brewing. Glad you got those tax cuts though.

 

[bdgan]

There are other reasons for it too as less people are having babies due to affordability issues and people are signing up for benefits sooner because they expect Trump to fvkk it up. Not to mention when you deport all the immigrants who were paying into the fund without the ability to receive benefits, a perfect storm is brewing. Glad you got those tax cuts though.

You are correct that the trust funds have been running out of money for some time for the reasons you mentioned. My post is that they're running out of money even sooner than previously predicted because of the items I mentioned.

My point is that the Trust funds will be out of money in 8 years and neither party has lifted a finger to address the problem. To the contrary, democrats have added new enhanced/expanded payments that only serve to make the financial hole bigger.

 

[TheValley91]

Where are you seeing it will run out in 8 years?

Also, I could make a simple assumption that having major tax cuts would also underfund these programs.

 

[baltimorened]

Where are you seeing it will run out in 8 years?

Also, I could make a simple assumption that having major tax cuts would also underfund these programs.

to the best of my knowledge the SS taxes haven't gone down in, like, forever. In fact the earnings applicable to the tax have increased. Tax rate has remained steady but amount of taxes for higher earners has increased.

On Medicare, I don't know about the tax rate, am pretty sure it has not been subject to any income tax reduction, it's based on income. and is separate from income tax.. but the user rate - amount Medicare users pay, which is means based, has been increasing annually

 

[TheValley91]

to the best of my knowledge the SS taxes haven't gone down in, like, forever. In fact the earnings applicable to the tax have increased. Tax rate has remained steady but amount of taxes for higher earners has increased.

On Medicare, I don't know about the tax rate, am pretty sure it has not been subject to any income tax reduction, it's based on income. and is separate from income tax.. but the user rate - amount Medicare users pay, which is means based, has been increasing annually

Looks like you are right. I think increasing the tax cap on SS or eliminating would be the biggest way to close the funding gap but higher earners won't go for it.

 

[baltimorened]

Looks like you are right. I think increasing the tax cap on SS or eliminating would be the biggest way to close the funding gap but higher earners won't go for it.

the answer might fall in creation of a donut hole...tax up to $176K......then pick up again at $400K and over. Nobody likes to be taxed.

They'll likely raise the eligibility age as well, we're all living longer.

Bottom line is nobody will be happy with whatever the government does. But they need to do something

 

[scotchtiger]

Looks like you are right. I think increasing the tax cap on SS or eliminating would be the biggest way to close the funding gap but higher earners won't go for it.

the answer might fall in creation of a donut hole...tax up to $176K......then pick up again at $400K and over. Nobody likes to be taxed.

Not just no, but hell no. It's a safety net program for the legitimately disabled + a retirement benefit with a cap. Once you have paid a certain amount, you have contributed all you need to contribute. I assume my payout won't go up unrestricted along with my tax liability...

I would have to pay substantially more than I do now under either of these scenarios. And I'm already significantly over-taxed. This is a huge **** no from me.

 

[scotchtiger]

This is exactly why we shouldn't be dependent on the government for income, ever... Your retirement should be funded from your savings, not some rob from Peter to pay Paul ponzi scheme.

 

[baltimorened]

Not just no, but hell no. It's a safety net program for the legitimately disabled + a retirement benefit with a cap. Once you have paid a certain amount, you have contributed all you need to contribute. I assume my payout won't go up unrestricted along with my tax liability...

I would have to pay substantially more than I do now under either of these scenarios. And I'm already significantly over-taxed. This is a huge **** no from me.

I'm certainly not proposing it, just hypothesising that if you make changes to the outgo then they will also make changes to the income. The government has already done this "donut hole" thing before, so it's an easier "do" then something that they have to think up. I'm on social security. It's a good plan. I've never done the math to determine if saving on my own would have yielded the same or better results, but SS was not meant for people like me, I have enough savings to thrive without SS. The program was meant for those who fail to consider the future and SS is their main source of retirement income. There's a large % of people over age 55 who have less than $50,000 saved for retirement. Even with SS they're in financial trouble if they ever plan to retire.

 

[bdgan]

Where are you seeing it will run out in 8 years?

Also, I could make a simple assumption that having major tax cuts would also underfund these programs.

The managers of the SS & Medicare Trust Funds issue a report each year. Their most recent report said they would no longer be able to meet their obligations in 2033 compared to 20235 in last year's report.

SS & Medicare are primarily funded by payroll taxes (7.65% from both employer and employee). They are also funded by a supplemental 1% tax on earnings over $250k and an additional 3.8% tax on investment income over $250k. None of that has been cut.

 

[scotchtiger]

I'm certainly not proposing it, just hypothesising that if you make changes to the outgo then they will also make changes to the income. The government has already done this "donut hole" thing before, so it's an easier "do" then something that they have to think up. I'm on social security. It's a good plan. I've never done the math to determine if saving on my own would have yielded the same or better results, but SS was not meant for people like me, I have enough savings to thrive without SS. The program was meant for those who fail to consider the future and SS is their main source of retirement income. There's a large % of people over age 55 who have less than $50,000 saved for retirement. Even with SS they're in financial trouble if they ever plan to retire.

I've done the math and the ROI is horrendous. And not just for well-to-do retirees. If an entry level blue collar worker contributed their SS tax + their employer's SS tax to an investment account for the duration of their career, they would have millions by a65. That's money that can not only fund retirement, but also be passed on to the next generation to accelerate their success.

A forced savings model would be exponentially better for the vast majority of Americans. But it's government and we're stuck with what we have, so we have to deal with inefficiency and excess cost relative to return.

 

[Rastafarian]

I've done the math and the ROI is horrendous. And not just for well-to-do retirees. If an entry level blue collar worker contributed their SS tax + their employer's SS tax to an investment account for the duration of their career, they would have millions by a65. That's money that can not only fund retirement, but also be passed on to the next generation to accelerate their success.

A forced savings model would be exponentially better for the vast majority of Americans. But it's government and we're stuck with what we have, so we have to deal with inefficiency and excess cost relative to return.

SS has been corrupted as an interest free loan to the government. We would’ve been in a much better situation had Bush privatized SS. I hope the new investment accounts can be used to phase out social security.

 

[bdgan]

Looks like you are right. I think increasing the tax cap on SS or eliminating would be the biggest way to close the funding gap but higher earners won't go for it.

Adjustments have to be made and that probably has to be one of the adjustments. I don't like it because I think it's unfair and it provides the wrong motivation. The idea for SS was a forced savings plan for an individuals own retirement, not a tax so the individual can save for both himself and others. I don't like policies that punish success. That said we're in a predicament and there aren't many easy solutions.

FYI the tax cap has already been steadily increased for decades. 20 years ago the cap was $90k. 10 years ago it was $118k. Next year it's $184k.

Also FYI the SS tax rate was only 6% in 1960. Today it's 12.4%. The HI rate was 0% in 1960. Today it's 2.9%. Rates shouldn't have to go up because tax revenue would naturally rise with wage growth. The current predicament is due to continually expanding benefits above and beyond inflation.

 

[bdgan]

the answer might fall in creation of a donut hole...tax up to $176K......then pick up again at $400K and over. Nobody likes to be taxed.

Increasing taxes on people earning above $176k isn't the same as increasing taxes on billionaires. I've proposed something a bit different that your donut hole approach. My idea is that earnings above the cap ($180k) would continue to be taxed at 50% of the current rate. 6.2% for both employee and employer would become 3.1% for each.

I would also reduce COLAs by 25% because I think everybody should have a stake in this. Opponents will accuse me of tossing granny off the cliff but so be it. An employee earning $400k would pay an additional $6800 (($400k-180k) * 3.1%). A retiree who receives a $24,000 annual SS benefit might get a 3% COLA which would be $720. I'd cut that back to $540.

A $30 million celebrity or Wall Street Banker would pay and extra $924k. The $400k guy would pay an extra $7k. The retiree would give up $540. That seems more than fair to me but I'm sure dems would lose their minds that granny would only get a 2.25% increase instead of 3%.

 

[bdgan]

This is exactly why we shouldn't be dependent on the government for income, ever... Your retirement should be funded from your savings, not some rob from Peter to pay Paul ponzi scheme.

There's a 3 legged stool theory that says retirement should be funded 1/3 from SS, 1/3 from Pension/IRA, and 1/3 from personal savings. A lot of dems want the bottom (50%?) to be able to retire solely on SS and for the top (10%?) to receive zero SS benefits.

 

[bdgan]

Not just no, but hell no. It's a safety net program for the legitimately disabled + a retirement benefit with a cap. Once you have paid a certain amount, you have contributed all you need to contribute. I assume my payout won't go up unrestricted along with my tax liability...

I would have to pay substantially more than I do now under either of these scenarios. And I'm already significantly over-taxed. This is a huge **** no from me.

I agree philosophically but the Ponzi Scheme has been going on for many decades and now we're in a deep hole. Now we have to raise taxes and/or cut benefits. Those are the choices.

 

[Watson to Renfrow]

The two major reasons are:

• Biden expansion of Medicaid benefits and eligibility
• Biden's SS Fairness Act that expanded eligibility for government employees.

SS & Medicare trust funds are now expected to run out of money in 8 years.

What's the solution? So far all I've heard from dems is that we need higher subsidies and no work requirements which takes us in the wrong direction. Some might want to eliminate the SS tax threshold but $176k hardly makes somebody a billionaire. It would also add significant cost to corporations, hospitals, etc.

The 176k threshold is a major problem. Why has that not been increased over the years?

 

[bdgan]

The 176k threshold is a major problem. Why has that not been increased over the years?

Where have you been? I already posted that the threshold was $90k 20 years ago and $118k 10 years ago.

You seem intent on wanting to tax people who earn more than you without even knowing what's already happening.

 

[firegiver]

all you have to do is lift the CAP on SS contributions and this issue is solved.

 

[Watson to Renfrow]

Where have you been? I already posted that the threshold was $90k 20 years ago and $118k 10 years ago.

You seem intent on wanting to tax people who earn more than you without even knowing what's already happening.

Lighten up, Francis. I have one of those pesky jobs that prevents me from knowing everything about everything. I should’ve read through the whole thread for the answer but these threads can be brutal.

 

[scotchtiger]

I agree philosophically but the Ponzi Scheme has been going on for many decades and now we're in a deep hole. Now we have to raise taxes and/or cut benefits. Those are the choices.

Easy choice for me - cut benefits and wean people off the government teat. Start by raising the benefit age.

 

[scotchtiger]

all you have to do is lift the CAP on SS contributions and this issue is solved.

So you want families like mine to pay 10s of thousands more in taxes for a benefit that you will also want me means tested out of in the future? Yea, people who think this way can kindly **** off.

 

[bdgan]

Easy choice for me - cut benefits and wean people off the government teat. Start by raising the benefit age.

Not for me. Right or wrong no politician get elected with a promise to cut benefits. The benefit age is already 67. Office workers could probably go longer but what about roofers or carpet installers. Heck, they won't even let air traffic controllers work past 55.

 

[firegiver]

So you want families like mine to pay 10s of thousands more in taxes for a benefit that you will also want me means tested out of in the future? Yea, people who think this way can kindly **** off.

can you translate that to english?
Also, we all pay taxes mr angry man. So stop acting like it only applies to you. Today, those making above the limit get RELIEF from the tax burdens that everyone else feels. The solvency issues raised here are real and should be addressed and can be done so. I would rather not watch the elderly be put on the street because rich folks are upset they can't afford the premium package on their second boat.

 

[baltimorened]

So you want families like mine to pay 10s of thousands more in taxes for a benefit that you will also want me means tested out of in the future? Yea, people who think this way can kindly **** off.

wait 'til you go on Medicare...it's also means tested

 

[baltimorened]

can you translate that to english?
Also, we all pay taxes mr angry man. So stop acting like it only applies to you. Today, those making above the limit get RELIEF from the tax burdens that everyone else feels. The solvency issues raised here are real and should be addressed and can be done so. I would rather not watch the elderly be put on the street because rich folks are upset they can't afford the premium package on their second boat.

what we all have to realize is that social security is a program that provides at least some floor for people in retirement. As I posted previously, there is a large segment of our society that by/at age 55 only have $50,000 or less saved for retirement. Absent SS society would have a lat more people on some form of government support. Look how many people work for small businesses that don't offer 401 programs and who make less than enough to pay their bills and contribute to IRAs.

It's the US version of Robin Hood, IMO. It's always been the third rail of politics and no president is going to let it die. So, in some fashion we'll either have to increase the age to start benefits, tax somebody more, or both.

 

[ClemsonInAtlanta]

This is exactly why we shouldn't be dependent on the government for income, ever... Your retirement should be funded from your savings, not some rob from Peter to pay Paul ponzi scheme.

What if you can’t afford to save because you work minimum wage and the government won’t raise minimum wage to a livable wage?

 

[baltimorened]

What if you can’t afford to save because you work minimum wage and the government won’t raise minimum wage to a livable wage?

why would anyone work for minimum wage, which I believe is $7.25/hour? And, what amount would someone who works his entire life for minimum wage get from SS? (I'll save you from having to look it up it's $1093/month) Is that enough to live on?

So why is the government responsible for how much money a person earns?

 

[chscoggins]

What if you can’t afford to save because you work minimum wage and the government won’t raise minimum wage to a livable wage?

So what you are saying is, in America no one has the ability to improve themselves? Or you don’t want them to improve their way of life.

 

[scotchtiger]

What if you can’t afford to save because you work minimum wage and the government won’t raise minimum wage to a livable wage?

Develop better skills and make yourself more valuable.

 

[ClemsonInAtlanta]

Develop better skills and make yourself more valuable.

Not every single person can work a high paying job that requires skills. There is always a need for basic labor. Do basic laborers not deserve the ability to afford to live?

 

[baltimorened]

Not every single person can work a high paying job that requires skills. There is always a need for basic labor. Do basic laborers not deserve the ability to afford to live?

it comes back to a basic question why stay at basic labor? There are plenty of ways to develop or build skills.

Now if you have some form of debilitating illness that's a different story.

I don't know your age, I'm pre boomer, I have lived during periods when we didn't have all these social programs. Imagine that, a world without welfare, SNAP, rent assistance, Medicaid, heating assistance, free school meals etc. And, you know what, people lived and thrived. They went to schools, got an education, college was reasonably priced (I paid $ about $900/year tuition, in state University). People rented rooms in their houses, if you needed more money fathers worked two jobs. If you want a skill you went to a technical school, or joined one of the services.

I know people who went to HS, joined the army, learned a skill, had their college educations subsidized by the Army, completed their service and are now multimillionaires. And this is not anecdotal, there are many like that.

That was back in the day when personal responsibility was a key element of society. You knew you had to make it on your own, government was not going to backstop you. But some of the same opportunities exist today. Don't want to work for minimum wage, join the Army, learn a skill or work for your college degree, get out, become self sufficient.

 

[scotchtiger]

Not every single person can work a high paying job that requires skills. There is always a need for basic labor. Do basic laborers not deserve the ability to afford to live?

Basic laborers make more than minimum wage. My landscaper pays his grunts over $20/hr. Minimum wage is for high school kids collecting movie ticket stubs.

 

[ClemsonInAtlanta]

Basic laborers make more than minimum wage. My landscaper pays his grunts over $20/hr. Minimum wage is for high school kids collecting movie ticket stubs.

So you’re telling me that an American citizen willing to work a full-time job shouldn’t be able to support themselves? Because when you oppose raising the minimum wage or you support cutting support programs that’s basically what you say

 

[tigres88]

Basic laborers make more than minimum wage. My landscaper pays his grunts over $20/hr. Minimum wage is for high school kids collecting movie ticket stubs.

Have you checked your Landscaper's legal status?

 

[baltimorened]

Have you checked your Landscaper's legal status?

not a problem, if you're in the country undocumented/illegal you can't work. ICE will get you

Which employer would break the law?

 

[tigres88]

not a problem, if you're in the country undocumented/illegal you can't work. ICE will get you

Which employer would break the law?

Hey Ned boi- have you EVER in your 70+ years ever hired a latino/foreigner to do work for you around the house? Landscaping? Cleaning? Contract work? Have you ever had a group of brown skinned people do work on your house for you? Have you EVER been to a mexican restaraunt?

Just doing research. I'd love you to answer each if you don't mind!

 

[baltimorened]

Hey Ned boi- have you EVER in your 70+ years ever hired a latino/foreigner to do work for you around the house? Landscaping? Cleaning? Contract work? Have you ever had a group of brown skinned people do work on your house for you? Have you EVER been to a mexican restaraunt?

Just doing research. I'd love you to answer each if you don't mind!

sure. I have a Latino/Cuban as a handyman, does a lot of work for me and just about all our neighbors. Don't have a cleaner, we're old school, do it ourselves: no contract work with Latinos, but with companies that employ latinos: love Mexican restaurants

80+