FrankRep
04-03-2008, 11:03 PM
Congress Continues to Neglect its Fiscal Responsibilities
The John Birch Society (http://www.jbs.org/)
April 3, 2008
ARTICLE SYNOPSIS:
Trustees of the Social Security Trust paint a rosy picture for the future of the fund. Unfortunately, the fact is that by 2017 Social Security expenditures will exceed revenues while the future obligations for Social Security and Medicare total $53 trillion dollars.
Follow this link to the original source: "Glenn Beck: The $53 trillion asteroid (http://www.cnn.com/2008/US/03/26/Beck.medicare)"
COMMENTARY:
A complete collapse of Social Security and Medicare can only be prevented by an immediate increase of 122 percent to Medicare taxes and 26 percent to Social Security. However, Congress will probably not act to make changes until a new president is elected.
A Christian Science Monitor story (http://www.csmonitor.com/2008/0327/p02s02-usgn.html) says that the message Congress is taking away from the Trustees' report is that there's still time to build bipartisan consensus for a solution.
However, U.S. Treasury Secretary Henry Paulson warned: "Without change rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America's future prosperity."
In 1983, Congress and President Ronald Reagan agreed to increase Social Security taxes well above what was needed to support the retirement program in the near and midterm. Surplus revenue from that higher tax was supposed to go into the Social Security Trust Fund, to be drawn upon later as the baby boom generation moved into retirement.
In fiscal 2007 alone, Social Security taxes raised $175 billion more than the program spent. However, instead of putting the funds into a trust fund, the government has been using them for day-to-day government expenditures. The trust has no funds, although on paper Social Security is financially sound through at least 2041. Government will have to start borrowing money in 2017 to start paying its Social Security and Medicare obligations.
Social Security is a tax on the middle class. In 2007, for example, Social Security taxes were collected only on the first $97,500 of a person’s wages or salary, and not collected at all on other forms of income.
A column by Jay Bookman in the Atlanta Journal-Constitution indicates this has produced gross inequities. As billionaire Warren Buffett has pointed out, he pays less than 18 percent of his enormous income in combined federal taxes. But because of payroll taxes, his secretarial and support staff pay a combined rate of more than 30 percent.
When in 2017 the surplus disappears, Bookman writes that the true size of our federal deficit will become clear.
"After 34 years in which the general fund was subsidized by Social Security, the flow of money will reverse. The general fund will be tapped to subsidize Social Security benefits, which means taxes will increase or services will have to be reduced."
Already the age of retirement has increased and the amount of benefits has decreased, failing to keep up with inflation.
If private citizens and Wall Street fund managers were to be so irresponsible with trust funds, they would go to jail. Government, however, seems to be exempt from the rules that the rest of us have to follow. Handling public funds is a sacred trust. This debt of $53 trillion could bankrupt us as a nation. When will Congress realize they must be fiscally responsible, cutting back on unnecessary programs and balancing its budgets? When will Congress start using our funds for the legitimate purposes of government spelled out in the Constitution? By 2017 it will be too late.
An interesting footnote: While The Christian Science Monitor and other elite press organs have chosen to accept government’s rosy picture of the condition of the Social Security Trust, Jay Bookman has painted the problem as a struggle of the middle and working classes against the wealthy. Only conservative commentators, like Glenn Beck, seem to be warning about the dangers ahead. Read Bookman’s column here (http://www.ajc.com/blogs/content/shared-blogs/ajc/opiniontalk/entries/2008/03/27/longrunning_dc.html).
SOURCE:
http://www.jbs.org/node/7634
The John Birch Society (http://www.jbs.org/)
April 3, 2008
ARTICLE SYNOPSIS:
Trustees of the Social Security Trust paint a rosy picture for the future of the fund. Unfortunately, the fact is that by 2017 Social Security expenditures will exceed revenues while the future obligations for Social Security and Medicare total $53 trillion dollars.
Follow this link to the original source: "Glenn Beck: The $53 trillion asteroid (http://www.cnn.com/2008/US/03/26/Beck.medicare)"
COMMENTARY:
A complete collapse of Social Security and Medicare can only be prevented by an immediate increase of 122 percent to Medicare taxes and 26 percent to Social Security. However, Congress will probably not act to make changes until a new president is elected.
A Christian Science Monitor story (http://www.csmonitor.com/2008/0327/p02s02-usgn.html) says that the message Congress is taking away from the Trustees' report is that there's still time to build bipartisan consensus for a solution.
However, U.S. Treasury Secretary Henry Paulson warned: "Without change rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America's future prosperity."
In 1983, Congress and President Ronald Reagan agreed to increase Social Security taxes well above what was needed to support the retirement program in the near and midterm. Surplus revenue from that higher tax was supposed to go into the Social Security Trust Fund, to be drawn upon later as the baby boom generation moved into retirement.
In fiscal 2007 alone, Social Security taxes raised $175 billion more than the program spent. However, instead of putting the funds into a trust fund, the government has been using them for day-to-day government expenditures. The trust has no funds, although on paper Social Security is financially sound through at least 2041. Government will have to start borrowing money in 2017 to start paying its Social Security and Medicare obligations.
Social Security is a tax on the middle class. In 2007, for example, Social Security taxes were collected only on the first $97,500 of a person’s wages or salary, and not collected at all on other forms of income.
A column by Jay Bookman in the Atlanta Journal-Constitution indicates this has produced gross inequities. As billionaire Warren Buffett has pointed out, he pays less than 18 percent of his enormous income in combined federal taxes. But because of payroll taxes, his secretarial and support staff pay a combined rate of more than 30 percent.
When in 2017 the surplus disappears, Bookman writes that the true size of our federal deficit will become clear.
"After 34 years in which the general fund was subsidized by Social Security, the flow of money will reverse. The general fund will be tapped to subsidize Social Security benefits, which means taxes will increase or services will have to be reduced."
Already the age of retirement has increased and the amount of benefits has decreased, failing to keep up with inflation.
If private citizens and Wall Street fund managers were to be so irresponsible with trust funds, they would go to jail. Government, however, seems to be exempt from the rules that the rest of us have to follow. Handling public funds is a sacred trust. This debt of $53 trillion could bankrupt us as a nation. When will Congress realize they must be fiscally responsible, cutting back on unnecessary programs and balancing its budgets? When will Congress start using our funds for the legitimate purposes of government spelled out in the Constitution? By 2017 it will be too late.
An interesting footnote: While The Christian Science Monitor and other elite press organs have chosen to accept government’s rosy picture of the condition of the Social Security Trust, Jay Bookman has painted the problem as a struggle of the middle and working classes against the wealthy. Only conservative commentators, like Glenn Beck, seem to be warning about the dangers ahead. Read Bookman’s column here (http://www.ajc.com/blogs/content/shared-blogs/ajc/opiniontalk/entries/2008/03/27/longrunning_dc.html).
SOURCE:
http://www.jbs.org/node/7634