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2011
Some Facts About Social Security and Medicare
Created by
Jerry R. Littau
September 29, 2011
- Category:
Politics
0 comments, 12,513 views, 3 likes
Some Facts about Social Security and Medicare: Social Security maybe the only program the government has that makes a profit. The government’s trustee report shows it has made a profit every year since 1983, except this year. It has over 2.6 trillion-dollar surplus in the trust fund. Following is the Link to the trustees report: http://www.ssa.gov/OACT/ProgData/assets.html. Notice the word SURPLUS; this means there is more money coming in every day than it takes to pay the people on Social Security. Therefore, it cannot be increasing the national debt. Money comes into the Social Security Trust Fund every day. The first thing they do with it is pay the people on Social Security, and the administrative overhead. This does not add to the national debt. Then the law requires them to invest the surplus in U.S. Treasury Bonds, before the end of the day. The surplus money is what the government is spending, and do not want to pay back to the citizens. The good faith of the U.S. Government backs these bonds, and they draw interest the same as any U.S. Government bond. They cannot default on them without defaulting on all U.S. Government Bonds. Some politicians want to move the age up for drawing full Social Security. When they move the age up more people do not live long enough to draw much, if any, of what they paid in. This leaves more surplus money the government can use and not pay back. This would hurt the future generation more than most of them know. Most corporations will find a way to make people retire close to age 65. Then they will have to take a much lower paying job if they can even get one, to make it until they reach Social Security retirement age. This period of a lower paying job will then reduce the amount that they can draw from Social Security. Social Security, and Medicare money is not collected to run the government with; they are collected for the citizens’ old age assistance. Congress is to use income tax, corporate tax, excise tax, general revenue taxes to operate the government. If they would not use Social Security surplus money, they would not owe the U.S. Treasury bonds that are in the Social Security Trust Fund. Then it would never be part of the national debt. They are supposed to invest the surplus in U.S. Government Bonds. However, if they do not want to pay them when they are due, the citizens need to change how they invest the surplus. They can accomplish this by passing a bill similar to H.R. 234 by Marsha Blackburn. Link to her bill THOMAS - Bill Text - H.R.234 They should discuss Social Security and Medicare separately from Medicaid, CHIP, SSI, food stamps, unemployment, and welfare. Social Security and Medicare the Citizen pays these for his or her old age assistance. Medicaid, CHIP, SSI, food stamps, unemployment, and welfare are a direct expense from the treasury and increases the national debt, yes as a Christian country, America must take care of these people. However, when I go to my doctor’s office, I always have to wait three to five hours because his office is full of illegal parents and their small children. Most of their bills hit Medicaid, CHIP, SSI, or other programs that are direct expenses out of the general treasury. It may be the United States needs to control the number of illegals in this country, or send Old Mexico the bill for their care. Old Mexico has a large amount of oil and gas revenue. Their government can afford it. These people do need doctored and treated fairly. 1 Jerry R. Littau July 12, 2011 According to the law, they must account for Social Security money off budget. It is in its own trust fund. This is why the president must appoint a four-person committee every year to do a trustee report of the Social Security trust fund, separate from the general budget. The following paragraph of information is from Social Security’s own page. I did not copy the projections from their page. Only a foolish person would try to project anything that will happen 75 years from now. Just look at the last 75 years no one could have seen what is happening in the world today. In addition, they assume a Baby Boom hitting Social Security and there is not one; therefore, their projections are wrong. Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983. The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession and to an expected $25 billion downward adjustment to 2010 income that corrects for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy. This year’s small deficit does not scratch the 2.6 trillion dollar surplus Social Security has in it. Social Security will always be able to stand on its own. It will always make a surplus, when unemployment is normal. There are about 2.5 million new people added to the workforce every year, paying in Social Security. If H.R. 234 by Marsha Blackburn became law, starting in 2013 Congress no longer could use the Social Security surplus money. It would require a committee every year to decide what Congress could invest the Social Security surplus money in. It would require that they invest it in something the government cannot spend. Then it would no longer be any part of the national debt. Link to her bill THOMAS - Bill Text - H.R.234 I feel there needs to be an amendment to H.R. 234 that would put a cap on the amount of surplus the Social Security trust fund can have, say like 500 billion. This would cover several years of high unemployment, like this year, and Social Security still would not go broke. When the surplus reaches 500 billion, one of two things should happen. (1) The people who are receiving Social Security receive an increase in what they are paid. (2) The people paying in Social Security would get a decrease in what they have to pay. The next thing they say; there are 77,000,000 Baby Boomers starting to hit Social Security. That is a big lie, I have, and will challenge anyone. I do not care if it is Cato institute, or anyone else. When he or she says there is 77,000,000 Baby Boomers hitting Social Security, prove it. Show the public a 77,000,000 spike in the population. I will let them use 20 years, all of the 1940s and 1950s added together not just the decade they keep stating, the census reports only increased 47,025,463 for the full 20 years. If they prorate the census reports from 1946 to 1964 (known as the Baby Boom), they will get even a smaller total 45,236,153 and everyone knows the increase of census reports are not all babies. They include everyone, including immigrants, which many of them were middle age, and older, and are most likely dead by now. There has been larger Census Reports after the so-called Baby Boom. The 2000 Census Report that covers the 1990s was 32,712,033 by itself. These people are not retirement age. They are working age, and should be paying Social Security. 2 Jerry R. Littau July 12, 2011 Each Census Report shows the increase for the previous 10 Years. The Census report does not give the number increased. I calculated them by subtracting the previous 10-year report from the current 10-year report. The following link is to the U.S. Census Bureau’s Reports http://2010.census.gov/2010census/data/index.php Census Report for year 1930 covers the 1920s US Total Population 123,202,660 Total increase over the previous Census Report 17,185,092 Census Report for year 1940 covers the 1930s US Total Population 132,165,129 Total increase over the previous Census Report 8,962,469 Census Report for year 1950 covers the 1940s US Total Population 151,325,798 Total increase over the previous Census Report 19,160,669 I used 4 years of this for the Baby Boom calculations Census Report for year 1960 covers the 1950s US Total Population 179,323,175 Total increase over the previous Census Report 27,997,377 I use full 10 years of this for the Baby Boom calculations. Census Report for year 1970 covers the 1960s US Total Population 203,211,926 Total increase over the previous Census Report 23,888,751 I use 4 years of this for the Baby Boom calculations. Census Report for year 1980 covers the 1970s US Total Population 226,545,805 Total increase over the previous Census Report 23,333,879 Census Report for year 1990 covers the 1980s US Total Population 248,709,873 Total increase over the previous Census Report 22,164,068 Census Report for year 2000 covers the 1990s US Total Population 281,421,906 Total increase over the previous Census Report 32,712,033 Census Report for Year 2010 covers the 2000s US Total Population 308,745,538 Total increase over the previous Census Report 27,323,632 3 Jerry R. Littau July 12, 2011 If you add up all the increases since 1964, you will see the population has increased a known 129,422,363 subtract 4 years of the 1960s for the so-called Baby Boom = 119,866,862.6. The 2000 Census Report was 4,714,656 larger than the 1960, which covers the 10-years of the 1950s. It is the largest Census Report of the so-called Baby Boomers. The 2010 Census Report increased the US Population 27,323,632 this is almost as much as the 1950s, the largest so-called Baby Boom Census Report. The 1950 was 27,997,377, there is only 673,745 differences. The following link is to the United States population clock http://www.census.gov/population/www/popclockus.html If you click, the World Census Clock link, the United States population is over 311,333,672. The reason the World Census Clock shows 2,588,134 more than the 2010 Census Report, is it keeps counting every second and the 2010 Census report was April 1, 2010, that is several months difference. When you check this clock, it will have a different number than I have in this note. The clock keeps updating. The numbers I used was on May 11, 2011 about 3:00 p.m. These numbers keep increasing as the population grows. How can there not be an increase in people paying in Social Security compared to people drawing out Social Security? Following is the information the population clock had the last time I checked it on May 11, 2011. I added the yearly totals, as the clock does not give them. There is 31,536,000 seconds in a year (60sec X 60min X 24hr X 365 days = number of seconds in a calendar year 31,536,000) One birth every 8 seconds = 3,942,000 every year One death every 12 seconds = 2,628,000 every year One international migrant (net) every 45 seconds = 700,800 every year Net gain of one person every 14-second in the United States This causes a population growth of 2,252,571 every year in the United States. They say we live longer, and they make it sound longer than real life expectancy is. Social Security’s, Internet page says, if you exclude infant mortality and figure life expectancy from age 21, to death since 1940, life expectancy has increased a modest 5 years. The infant mortality back then was much higher. Including infants is what people use to distort the numbers. Infants would not have paid in Social Security or drawn Social Security; therefore would not have affected Social Security. Following is the link to the Social Security page. http://www.ssa.gov/history/lifeexpect.html the comments they have on their page about a Baby Boom generation, is wrong. There is no Baby Boom hitting, or going to hit, Social Security, check the numbers on the census reports. Do a search on the Internet; the average life expectancy is 77.9 years. Do not just pick the longest life expectancy, or the shortest. 77.9 years is the average life expectancy. Following is the link for the information: http://www.cdc.gov/nchs/fastats/lifexpec.htm. 4 Jerry R. Littau July 12, 2011 Medicare part (A) is paid for by the citizens, it is the 2.9% that every working, or self-employed person pays in. For people making over $200,000 single or $250,000 jointly this will increase to 3.8% in 2013. Medicare part (A) is different from Medicare part (B). The citizens on Social Security pay a monthly premium for Medicare Part (B) that covers about 25% of Medicare Part (B) cost. In addition, when the person on Medicare Part (B) goes to the doctor, they pay a co pay of approximately another 20% of the cost after they meet the $155 yearly deductable. The balance of the cost comes from the general treasury. It was set up to be this way. When they speak of Medicare, they need to stop combining all Medicare together. The 2009 trustee report part (A) had several hundred billion dollars of surplus. At the end of 2009, Medicare Part (A) HI (Hospital Insurance) had 304.2 Billions. Part (B) had 75.5 Billion. Part (D) had 1.1 Billion, in Special U.S. Treasury Security, for 380.8 Billion in the various Medicare Trust Funds. They had not posted the 2010 Report at the time of this note. Are the trust funds separate from the general fund? Yes, the trust funds are separate in an accounting sense. They must account for Social Security off budget, in its own trust fund. It is 10.6% of the 12.4% sent in for Social Security. They put about 1.8% of this 12.4% in a separate DI (Disable) Trust fund. It appears this amount varies some over time. Employee and Employer combined pays 12.4% Social Security on the first $106,800 of their income. Think of Social Security like a mandated, pooled 401K. It is in a pool where the lower income people can draw on what the higher income people overpay. Disability is in its own DI trust fund, it is approximately 1.8% of the 12.4% sent in Medicare part (A) HI (Hospital Insurance) is in its own trust fund. Employee/Employer (each) pay 1.45% for a total 2.9% on all earning it does not have a cap like Social Security; the wealthy must pay this 2.9% on all of their earnings. Starting in 2013, the 2.9% Medicare Part (A) HI tax rises to 3.8% for individuals making over $200,000 or jointly filing couples making in excess of $250,000. Medicare part (A) has no cap, the wealthy pays this percentage on all of their earnings. Medicare part (A) is a separate trust fund from the Medicare part B trust fund. Medicare Part (B) (Medicare Physicians’ Services Program). The premiums people on Social Security pays for part (B) funds approximately 25% of its cost. In addition, when the person on Medicare Part (B) goes to the doctor, they pay a co pay of approximately another 20% of the cost after they meet the $155 yearly deductable. The rest of Part (B) is funded from the General Treasury, the way it was set up to be. SSI: The Social Security Administration administers SSI (Supplemental Security Income). It does not come out of the Social Security trust fund. It is funded from the U.S. General Treasury. Medicaid is separate; it is controlled and funded mostly by the States Treasury’s, with help from the U.S Treasury. 5 Jerry R. Littau July 12, 2011 Social Security and Medicare (A) are not unearned entitlements. They are a form of social insurance that people pay to supplement their retirement, and sickness insurance in old age. They pay this in while they are young and able to work, in order to receive the benefits when they are older and no longer working. Some people will pay in more than they receive back and others will get back more than they paid in, but this is the practice with any form of insurance, public, or private. All we need to do to save Social Security is: 1. Make Congress honor their trustee responsibility over the Social Security Trust Fund. a) They sell U.S. Bonds on the open market every day; they can sell enough on the open market to pay Social Security what they owe it. This would not change the national debt it would just pay Social Security and transfer the debt to someone else. b) They can get unemployment down and Social Security will always make a profit when unemployment is down to a normal level. c) They can stop their overspending and stop using the Social Security Surplus money for anything except Social Security. However, do not allow Congress to cut Social Security benefits, or move the age up. d) There needs to be a cap on the amount the Social Security Surplus can grow. Where when it hit this cap 1 of 2 things need to happens, either the people on Social Security start receiving more, or the people paying in pay in less. The reasons for this are: a. One, so that the surplus does not become so large that Congress does not want to, or cannot pay back the surplus. b. If the surplus were invested in something beside U.S. Bonds, the cap would keep the surplus from getting so large that people handling the money can control the market. Investing it in one company or the other to decide what company stays in business, or not. c. However, the surplus amount needs to be large enough to cover several years of high unemployment, like this year. Social Security estimates a 41 billion deficit this year; this deficit was caused by high unemployment. In addition, they did not count the interest on the 2.6 trillion dollars surplus and they took a $25 billion write off. When unemployment comes back down, Social Security will go back to building a surplus. Therefore, a surplus like 500 billion would cover several years of high unemployment, and still not go broke. d. The only downside to capping the amount of surplus, it would limit the amount that would draw interest. e) Stop Congress from spending the Social Security money on anything except Social Security. f) This can be done by passing H.R. 234 by Marsha Blackburn or a similar bill. g) Stop paying deceased people. h) If they had to have more money they could raise the cap on the amount Social Security is paid on from $106,800 to maybe $250,000 i) Alternately, the Citizens privatize Social Security by getting someone else to be the trustee over it. Whoever that would be; they would need to invest the surplus money in low risk guaranteed instruments that Congress cannot spend. If Social Security is 6 Jerry R. Littau July 12, 2011 privatized it would still need to be mandated, and kept in a pool, as it is now. Where lower paid people can draw on some of what the higher paid people pay in. Social Security is the same as a 401K; except it is a mandated 401K for the Citizens old age, and in a pool. This money is not for Congress to use. The citizens and their employer put this money in a trust fund called Social Security for their retirement. The only difference is, it is mandated and in a pool. Where the lower income people can receive part of what the higher income people overpay. It needs to remain in a pool to assist the lower income people in their later years. Someone will always overpay by paying in on a much higher level of income. That will cover the lower income person overdraw. There are more people paying in at the higher income level every day. Even paying the lower income people more than they paid in, there is a surplus growing. Because the people who pay in on a higher income, pays in more than what a lower income person who indexes on that amount will ever draw. In addition, there is money in the trust fund from people who dies before they get to draw their money out. In addition, the interest the trust fund is making from the Special U.S. Treasury Bonds. One-year the interest was more than 9 billion dollars. Social Security assets have grown, from about $47 billion at the end of December 1986 to about $2,609 billion ($2.6 trillion) by the end of December 2010. In Special U.S. Treasury Bonds and will continue to grow when unemployment is down, as the population keeps growing. This money is owed to the citizens. The politicians and the media like to call the Special U.S. Treasury Bonds in the Social Security Trust Fund IOUs, to make Social Security sound in bad shape. They do not call the U.S. Treasury Bonds IOUs that they owe the public, China, Japan, and the rest of the world. There is no difference in them except the ones in the Social Security Trust Fund can only be negotiated by Social Security or Medicare Administration, and they can be cashed any time they need the money, with no penalty. They draw the same interest, and are back with the good faith of the U. S. Government, the same as Standard U.S. Treasury Bonds. Social Security makes short-term (10-years) and long-term (75-years) projections, and on the long-term projections, they think that Social Security is going broke; I think it is foolish to try to make a 75-year projection. The government has made many projections in the past that never happened. They have been making these projections since back in the 1970s when they noticed the 1960s Census Report had a fair size increase. They have just ignored the fact that there has been larger population increases since then, like the 1990s, and they keep moving the projected date up. No one can project what will happen over the next 75-years. Look back at the last 75-years, no one could have predicted any of what is happening today, or planned for it 75-years ago. Only a foolish person would try to project anything out 75-years. If for some reason we do need more money for Social Security, all we have to do is raise the maximum cap from $106,800 to maybe $250,000, do not move the age up, or cut benefits. Congress has already raised the cap many times since 1950 as wages has gone up. At this time, Employee and Employer each pay 6.4% for a total 12.4% on the first $106,800 of their income to Social Security. No one pays Social Security on any income above $106,800, at this time. Below are some examples of what is paid into Social Security, compared to what is drawn out of Social Security: 7 Jerry R. Littau July 12, 2011 At this time, you must be age 66 to draw full retirement. This will keep moving up until, if you were born in 1960 and later you have to wait until you are age 67 to draw full retirement. Add up what you and your employer pay in, and figure it invested with compounding interest over just a 45-year working life, and see how it grows. Most people work 55-years or more. In the following examples, I am using a 45-year working life. This allows 10-years for young people to settle into a good paying career. The following examples do not have any interest or capital gain figured in them, or that about half of the people who pay in do not live long enough to draw any, or very much of their money out. In the calculations below, I am using 12.4% paid in (6.2% by Employee and Employer each). The maximum benefits allowed paid out, and the average life expectancy of 77.9 years. 77.9 years is the latest data for the national average in Faststats for 2007. Do not pick the longest, or the shortest life expectancy, use the average life expectancy. The years since 2007 should make no significant difference in life expectancy. Following is the link to this information. http://www.cdc.gov/nchs/fastats/lifexpec.htm Below, I calculated the benefits starting at age 65, and age 67. This allows 12.9, and 10.9 years of benefits. Which, most people do not get the max for one reason or another. Even though a person now must be age 66 for full retirement, I included calculations starting at age 65 because full retirement should move back to age 65. Anyone taking early retirement gets a big deduction in how much per month his or her check is. The way Social Security indexes what you paid in over your highest 35 years with national wage increases, etc. to determine what you draw out. The person drawing on the examples below may not have been the person who paid in on that amount, but someone else did. Social Security is in a pool. Therefore, there is always someone else paying in at a higher rate. This way it does not matter who is drawing on which amount. Notice the people who do not start drawing until age 67 pays in more on $30,000 a year average income, than the person who indexes on $30,000 will draw out. People paying on $50,000, a year average income and up pay in more than a person will draw out, no matter if they start drawing out at age 65 or 67. These figures do not include interest and capital gain on that money for 45-plus years. I used the yearly average income paid into Social Security, and the yearly full retirement numbers from the Social Security document in Justfacts. Following is the link to Justfacts http://www.justfacts.com/socialsecurity.asp you have to scroll way down to find the chart that has the numbers in it. This Chart is no longer there. The problem with their page it assumes there is a Baby Boom going to hit, and there is none. I noticed that after I have been sending this information around justfacts has removed the chart they had on their page, I used. The chart was from Social Security. It showed how much per year paid in on different incomes and the maximum the person who indexes on that amount can draw out per year. They have updated their page several times lately. If you do not assume there was a Baby Boom, when you read their page you will see Social Security will not go broke. There was no Baby Boom look at all the Census Reports. ===================================================================== Example #1 A 20-year-old person who works for 45 years earning $25,000 per year average, paying in 12.4%, pays in $3,100 per year, 45 years X $3.100 = $139,500. At age 65 full retirement the 8 Jerry R. Littau July 12, 2011 max the person who draws on this can receive is $12,936 per year, if they live the life expectancy of 77.9 years this person may draw 12.9 years X $12,936 = $166,874 total. This person will draw ($27,374) more than was paid in on $25,000 per year average income. If this person starts drawing at age 67, he will draw $141,002.40 total. This is ($1,502.40) more than was paid in on $25,000 per year average income. The $139,500 paid in does not include any interest or capital gain over the 45-years, which would add up to more than they would overdraw. In addition, further down you will see that many people are paying in much more than any person will ever draw out. On top of what the people who paid in that died before he or she reached 77.9 years, their money is in there also. ===================================================================== Example#2 A 20-year-old person who works for 45 years earning $30,000 per years average, paying in 12.4%, pays in $3,720 per year, 45 years X $3,720 = $167,400. At age 65 full retirement the max the person who draws on this can receive is $14,544 per year, if they live the life expectancy of 77.9 years, this person may draw 12.9 years X $14,544 = $187,617.60 total. This person will draw ($20,217) more than was paid in on $30,000 per year average income. If this person starts drawing at age 67, he or she will draw $148,348.80 this is $19,051.20 less than was paid in on $30,000 per year average income. This is not figuring any interest and capital gain, on what someone paid in over 45 years; ===================================================================== Example #3 A 20-year-old person who works for the next 45 years earning $50,000 per year average, paying in 12.4%, pays in $6,200 per year, 45 years X $6,200 = $279,000. At age 65 full retirement the max the person who draws on this can receive is $20,940 per year, if this person lives the life expectancy of 77.9 years, they may draw 12.9 years X $20,940 = $270,126 total. This person will draw $8,874 less than was paid in on $50,000 per year average income. If this person starts drawing at age 67, he or she will draw $228,246 this is $50,754 less than was paid in on $50,000 per year average income. This is not figuring any interest and capital gain, on what someone paid in over 45 years. ===================================================================== Example #4 Many people are paying 12.4% on the full $106,800 of income. This is the max anyone pays on for years 2009, 2010 and 2011, this adds up to $13,144 per year X 45 years = $591,480. At age 65 full retirement the max the person who draws on this can receive is $28,692 per year, if they live the life expectancy of 77.9 years, this person may draw 12.9 years X $28,692 = $370,126.80. They will draw $221,354 less than was paid in on $106,800 per year average income. This is not figuring any interest and capital gain, on what someone paid in over 45 years. 9 Jerry R. Littau July 12, 2011 If this person starts drawing at age 67, he or she will draw $312,742.80 this is $278,737.20 less than was paid in on $106,800 per year average income. This is not figuring any interest and capital gain, on what someone paid in over 45 years. ===================================================================== Any of these example plus the compound interests and capital gain add up to more than anyone person will ever draw from Social Security. It also shows that the so-called rich pay much more than they will get back. That plus what is left in the trust fund by people that die before they get to draw much, if any out, more than makes up for what the lower paid people over draw. Even if the ratio of people paying in compared to people drawing out is one-to-one there is more money going into Social Security than what retirees are drawing out. They need to stop trying to use the ratio of what a person pays in per year to what that person draws out per year. They need to use the actual years and dollar amounts of what a person paid in and what he or she draws out. No one draws 45 or 55 years of benefits out, like the 45 to 55 years, he or she paid in. A person draws out far fewer years than the numbers of years he or she paid in. Therefore, using the ratio of what a person paid in compared to what he or she draws out per year does not give a true picture of what is happening. Neither does the ratio of people paying in compared to the number of people drawing out give a true picture of the Social Security status. We need to use actual numbers, not ratios. Many people pay into Social Security, and never get to draw any money out or very little before, they die. Then consider how the population keeps increasing and what each person pays into Social Security, plus interest and how it adds up. Social Security will never go broke if we stop paying anything except Social Security out of it, and invest it wisely. The Citizens should demand that Congress move the full retirement age back to age 65, and increase benefits to people on Social Security. They need to adjust the income or output where it leaves a reasonable surplus in the trust fund to cover any years that it may come up a little short. It does not need trillions of dollars surplus left over for the government to spend. Some additional information and studies done by other: Baby Boomers are dying off fast: If you click on the link at the bottom of this paragraph, it will take you to Bugles Across America org, website. In the second paragraph down you will see The Department of Veteran affairs figures 500,000 Veterans die each year and they estimate 500,000 dying each year for the next seven years. The so-called Baby Boomers are dying off fast, and many of them that paid in all their lives are already gone. Many of the so call Baby Boomers died in Vietnam. 58,226 American soldiers died or are missing in action. This is not counting the men and women who are not veterans that are in the same age group, who are dying at the same time. A search on the Internet says 2,420,000 people die in America every year. The following link is to Bugles Across America.org http://www.buglesacrossamerica.org/Pages/default.aspx 10 Jerry R. Littau July 12, 2011 I want to thank Hannah with the Center on Budget and Policy Priority for permission to copy and insert the following article written by Robert Greenstein with the Center on Budget and Policy Priority. This is the link to their site: http://www.cbpp.org/experts/index.cfm?fa=view&id=21 I realize he wrote it in 2001, but it seems to apply very well today. This is the link to the article below: http://www.cbpp.org/cms/index.cfm?fa=view&id=2111 ==================================================================== August 22, 2001 Administration Misrepresents Financing of Medicare Trust Fund by Robert Greenstein In its zeal to claim there are no Medicare trust fund surpluses, the Administration's mid-session review misrepresents the facts about Medicare financing. The mid-session review states on page 13: "There is a common misperception that there is a Medicare surplus and that Congress must take action to preserve its assets. There is no Medicare surplus. Any excess cash collected from the payroll tax that is not used to provide hospital insurance is used for other Medicare spending such as doctor bills, which are not fully covered by premiums paid by beneficiaries." This statement is false. The Medicare payroll tax is dedicated to the Medicare Hospital Insurance trust fund and solely to that trust fund. If more Medicare HI payroll tax revenue is collected in a year than is needed to cover Medicare Hospital Insurance costs that year, the Medicare HI trust fund loans the surplus revenue to the Treasury and receives Treasury bonds in return. These bonds can be used solely to finance Medicare hospital insurance. None of the surplus payroll tax revenue is transferred to the Medicare physicians' services program (Medicare Part B), which has its own, entirely separate financing structure. If the federal budget outside the Social Security and Medicare Hospital Insurance trust funds is in balance, the Treasury uses the surplus Medicare Hospital Insurance revenue to pay down the debt. If the federal budget outside these trust funds is in deficit, the Treasury uses the surplus revenues to help fund general government operations. The money is not earmarked for Medicare physicians' services. This is not simply a technical point. Faced with the fact that its tax cut and other proposals cannot fit within the surpluses available outside the Social Security and Medicare Hospital Insurance trust funds, the Administration has been misrepresenting the financing structure of Medicare throughout the year. The discussion in the mid-session review is the latest, and most egregious, of these misrepresentations. (Since February, the Administration has been arguing that the Medicare physicians' services program is in deficit and that this deficit obliterates the surplus in the Medicare Hospital Insurance trust fund. Claiming that Medicare physicians' services is in deficit, however, is meaningless. This part of Medicare is not supposed to be financed by payroll taxes that cover its costs; it is supposed to be financed primarily by general revenue. Describing Medicare physicians' services as being in deficit is no more meaningful than describing the defense budget, education, health research, or farm programs as being in deficit. All of these parts of the budget are financed in whole or in part with general revenues, not payroll taxes. The simple fact is that Medicare Hospital Insurance has distinct and separate financing from Medicare physicians' services, has its own trust fund, is in surplus, and does not commingle its funds with Medicare physicians services.) ==================================================================== 11 Jerry R. Littau July 12, 2011 More information to what is happening to Social Security and how it is paying dead people. I copied the following from NewsMax Dated November 7, 2010. This is the link to NewsMax home page: http://www.newsmax.com/ Following is the study Sen. Tom Coburn had done. ================================================================== Editor's Note: Alert: Social Security Recipients, What You Must Know Now 3. Feds Shell Out $1 Billion to Dead People The federal government has paid out well over $1 billion to 250,000 deceased individuals over the past decade — and can’t figure out how to fix the problem, according to a new report from Sen. Tom Coburn. “Washington paid for dead people’s prescriptions and wheelchairs, subsidized their farms, helped pay their rent, and even chipped in for their heating and air conditioning bills,” the Oklahoma Republican report says. Among the disclosures, based on a review of government audits and reports by the Government Accountability Office, inspectors general, and Congress: ● The Social Security Administration sent $18 million in stimulus funds to 71,688 dead people, and $40.3 million in questionable benefit payments to 1,760 deceased individuals. ● The Department of Agriculture sent $1.1 billion in farming subsidies to dead farmers. ● The Department of Health and Human Services sent $3.9 million to 11,000 dead people to help pay heating and cooling costs. ● Medicare paid up to $92 million in claims for medical supplies prescribed by dead doctors and $8.2 million for medical supplies prescribed for dead patients. In some cases, the payments went to dormant bank accounts, while in others they landed in the pockets of living people who are “defrauding the system by collecting benefits meant for a now-deceased relative,” according to Coburn’s report. The detected waste “is likely only a small picture of a much larger problem,” the report notes. In June, the Obama administration announced new steps to avert payments to the deceased. Federal agencies are now required to check their payees against the Social Security Administration’s Death Master File. “But SSA admits its records are fraught with errors,” the report states. “It is extremely expensive and may even be impossible to determine if a person is alive or dead, particularly if the person died many years ago.” Coburn concludes: “At this point in our nation’s history, it is of the utmost importance that every tax dollar spent by the government be put to good use. This means spending within our means on the living, not outside our means on the dead.” 12 Jerry R. Littau July 12, 2011 ==================================================================== Here is one of the ways they are paying dead people: This is something I have talked to people who has had it happened to them. People on Social Security have their checks direct deposited to their bank. Many times when they pass away, the Executor of their estate keeps writing checks on that estate account, not realizing Social Security is still depositing checks into it. For some reason Social Security does not know to stop sending the Social Security checks. Some Executors of these estates allow the checks to continue without realizing it is happening. Some allow them to continue sending the checks on purpose. We must put a stop to paying dead people. Social Security must get their death records up to date. If we do this, Social Security should have plenty of money in it to move the retirement age back to 65, and increase benefits. ======================================================================== Following is a quote from Numbers USA April 18, 2010 this edition was for the 40th Anniversary of the first Earth Day. The following link is to Numbers USA home page http://www.numbersusa.com/content/ ===================================================================== As Sen. Gaylord Nelson (D – Wis.) said on the 32nd Earth Day anniversary just a few years before his death: "We are preparing to celebrate the 32nd Earth Day just after the Census Bureau has announced that far from winding down in the 1990s, U.S. population growth boomed at its highest level in the nation's history! Not even the peak of the Baby Boom in the 1950s added as many people! "This new population boom represents a PROFOUND FAILURE in our nation's pursuit of environmental quality. Since 1970, another 80 million people have been added to the country. "Every environmental goal has been delayed because of this failure." ===================================================================== 13 Jerry R. Littau July 12, 2011
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