First Posted: 08- 5-10 12:57 PM | Updated: 08- 5-10 02:45 PM
The new health care law has significantly improved the prognosis for Medicare. The law will extend the life of its trust fund by 12 years until 2029. This will delay any need for dramatic changes in benefits or revenues, according to a new report.
The annual check-up from government actuaries overseeing the nation's two central safety-net programs found that Social Security continues to be much less of a problem than Medicare. It will remain in strong financial shape at least through 2037.
"The financial outlook for the Medicare program is substantially improved as a result of the far-reaching changes in the Patient Protection and Affordable Care Act," concludes the Medicare report. The trustees warned that the improvements depend on the successful implementation of the law.
Social Security, according to its annual report, is expected to pay out slightly more in benefits than it receives in payroll tax this year, for the first time since changes were made in 1983.
But payroll taxes are only one source of income for the program. The others sources including interest income on its $2.5 trillion trust fund is held in special issue U.S. Treasury securities. This program is expected to continue to run a surplus until 2024.
The program will need to start spending from its trust fund in 2025, with that fund becoming exhausted in 2037, which is consistent with last year's estimate.
Social Security Commissioner Michael J. Astrue, one of the government trustees releasing the report, begged reporters not to scare the public by exaggerating the significance of trust fund exhaustion. He said:
That does not mean that there will be no money left," Astrue said. At that point, even if Congress took no action, Social Security could still pay out 78 percent of expected benefits from annual revenues. "That would be a bad result, but it is a far cry from having no benefits at all.
Inaccurate reporting on the topic tends to "make young people despair about Social Security," he said.
This appear to be the basis of the GOP 's 'sky id falling' approach to privatizing social security. Conservatives want to convince younger generations that nothing will be left for them.
In the UK, it's version of social security was privatized under Margret Thatcher, and the privatized system floundered. The banks advised seniors to return to the government system. UK seniors today get half of what seniors get in the US get.
Privatization of Social Security would allow Wall Street to loot the Social Security Trust Fund, a conservative dream. The average American would have to have $250,000 in retirement savings to match a monthly payment of $1500 from the Social Security administration when they retire.
source: http://www.huffingtonpost.com/2010/08/05/medicare-gets-new-lease-o_n_671936.html
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