Recession erodes Social Security and Medicare trust funds
Filed under: Retirement
The trust funds for both Medicare and Social Security will run out of money earlier than expected because of the recession, the trustees reported today. The Medicare Trust Fund will run out of money by 2017 two years earlier than forecast last year. The Social Security Trust Fund's life has been shortened by four years and is expected to run out by 2037.Analysts were expecting the bad news because fewer people are paying into both programs. Approximately 5.7 million jobs have been lost since December 2007 reducing payroll tax collections dramatically. In fact in March the Congressional Budget Office projected Social Security's surplus would be just about gone in 2010 with only $3 billion more collected in taxes than benefits paid out.
Congress has been using that Trust Fund as its personal piggy bank, taking IOUs from the Trust Fund to pay for their pet projects. Well the party's over. Now that the surplus is gone thanks to the recession, Congress will have to look elsewhere for extra funds. Also, once the taxes collected are not enough to cover benefits and its time to withdraw funds from the Trust Funds, the situation will get even worse. Congress will have to start repaying those IOUs. That's now expected to happen two years earlier in 2017 thanks the to the recession.
Medicare is in even worse shape. It's Trust fund will run out of money in 2017. That's why President Obama has set his priority on fixing health care before Social Security. If the industry can hold down health costs that will help but much more needs to be done or the promises of Medicare and Medicaid will overtake a much larger share of the federal budget. Some type of comprehensive health care bill has just become an even greater priority.
With people's retirement savings also devastated by the bursting of the bubble, now is not the time for the retirement safety net to collapse. Congress has put off fixing the problem long enough. It's time for them to start looking for a bipartisan solution to both Medicare and Social Security.
Lita Epstein has written more than 25 books, including the Complete Idiot's Guide to Social Security and Medicare.



























Reader Comments (Page 1 of 40)
5-12-2009 @ 4:59PM
Susan said...
The system is running out of money because of so many people on fraudulent disability. Everyone is getting their children on disability for non existent medical problems...usually ADHD, or something similar. They have learned how to work the system to get an extra welfare check and believe me they are!
Reply
5-12-2009 @ 5:16PM
AL said...
Susan, you hit the nail on the head and please don't forget the illegal immigrants that are sucking the system dry and our government that sees no problem with criminals collecting benefits they never paid into. If our government wants to stop this insanity, they would force these people to be checked by a government doctor and those that are defrauding get prosecuted and off the system. I'm fed up with how those that worked all their lives and legally collect are getting short changed by the criminal element. Do you honestly believe that anything will be done when President Obama's Aunt is in this country illegally and she was deported and she is still here and living in public housing and why is she NOT being deported and off the system as she is illegal as hell.
5-12-2009 @ 5:51PM
dskaalrud5 said...
Care to cite some sources and figures for your accusations? If "everyone" is doing it then it should be rather easy to back up what you're saying.
5-12-2009 @ 7:25PM
Joe said...
Susan, Medicade does not come out of Social Security funds.
Make sure you know what you are talking about or shut up.
5-12-2009 @ 7:06PM
gemini34433 said...
You cynical people need to realize there are millions of mentally disabled people who collect disability who indeed have mental impairments that prevent them from working again, many of whom worked over 20 years. Being mentally disabled does not mean that one has to go around acting in ways that are stereotypical of a mentally disabled person, such as being out of control, talking to themselves or doing other pecular things. Someone who is mentally impaired may have a situation that prevents them from interacting with others, but do not exhibit outwardly signs of being "crazy" that you cynical ones expect to be evident for someone to be mentally disabled. For you cynical people who may not be aware of all the facts in regard to a disabled individual but say their are committing fraud, should realize that you are not the person's doctor or doctors who analyzed and submitted to the courts their findings on the individual's condition. In many cases it is the court that grants disability benefits if the case is contested. So be sure you have your facts right before you accuse someone of fraud, especially someone you really don't know whether a mental of physical disability.
5-12-2009 @ 8:29PM
CherMoe said...
Have you or a family member ever applied for disability under Social Security? I think not, or you would know all the legal red tape and the hoops they make you jump through. AND how many years and numerous applications it takes, and sometimes paying an attorney to get money that is due you. The rules and regulations are quite strict and people with frivolous claims or "disabilities" that don't qualify simply don't get approved.
5-12-2009 @ 10:24PM
Frank said...
Let me straighten you out on disability. First, illegal aliens are not entitled to the program!!!! You have to have a social securtity number!! Second, it takes on average two and one half years to get social security disability. How many people that are trying to defraud the government are going to wait that long without working?? On average, the pay for disAbility is about 500 dollars a month. WOW!! How do I know this?? BECAUSE 8 YEARS AGO I WAS MAKING 80 THOUSAND DOLLARS A YEAR IN THE INSURANCE BUINESS. I HAVE A MASTER'S DEGREE IN ECONOMICS. I THOUGHT I WAS IN THE TOP OF THE WORLD UNTIL I GOT SICK WITH CANCER AND COLITIS. I HAD TO WAIT THREE STINKING YEARS TO GET MY BENENFITS!!!! IT IF WASN'T FOR MY PARENTS, I AM DIVORCE, WHO HELPED ME I WOULD HAVE ENDED UP IN THE STREETS. SO BEFORE YOU SPEW YOUR VENOM PLEASE KNOW WHAT THE HELL YOU ARE TALKING ABOUT!!!
5-12-2009 @ 10:50PM
Paulio said...
You're full of it. My son is fully autistic. He has been diagnosed by three fully accredited child psychologists and his pediatrician. He can't take any kind of medication because he immediately becomes suicidal literal saying he wants to die and trying to cut himself with anything he can find. Here's the thing HE IS ONLY SEVEN YEARS OLD! He has been denied twice for disability. His disability would amount to 637 dollars per month. If we go to a lawyer then the crook gets a percentage. This money is needed for his therapy as we have NO insurance. I'm beginning to think that the system is rigged to force people to have to pay lawyers to get what they need. On the other hand I have seen someone trying to abuse the system only to be turned down several times. Susan you don't have a clue. Until you walk in these shoes don't tell us that you believe that we're scheisters!
5-13-2009 @ 8:18AM
HB said...
Reading all of these comments I agree both ways. Yes some people are disable enough as they can not handle people there for they are unale to work but i know of some people who are married and get food stamps medical care and nothing wrong with them they work under the table and one person gets medicare and ssi becuase he is a drunk and can't work with people ok using i can't work with people is a stupid excuse i think just to lay drunk go to a AA meeting buddy and the government is so bad with money because congress is greedy is why these ssi welfare and medicare reciepants have to lie to get help. If our country was anything like the video I saw in my pshyc rehab class about medicare and welfare over seas in germany and england we all would be much happier and medically stable everyone pays the same on prescribtions no deductables health care, er visit free no cost everyone with money or no money gets same treatments. Everyonen is equal. If our health care system was like englands then we wouldn't be having these financial issues in the US. You ALL can thank your government and greedy law makers and congress for all that.
5-13-2009 @ 8:30AM
Ann said...
I agree with you Susan and also all the foreigners coming here to the United States to live and are taking whatever jobs are here for very cheap pay and also some are coming here and raking in benefits that should be for us Americans who have worked for years and paying into it now there is not enough for us that is really not fair and should be stopped. And our money is still being sent to other countries then they wonder why America is in such a mess.
5-13-2009 @ 9:33AM
Tony said...
In actuality, the system is running out of money due to the Fed Government placing the funds into the General Treasure Fund. The took Trillions over the years from the SS and Medicare Trust fund.
For every dollar you pay in SS and Medicare, your employer matches dollar for dollar. In theory if your employer did not pay that money for you then he could pay that directly to you.
Based upon this premise, I tried to remove myself and my wife from the Social Security rolls back in 1963. My wife and I have never had what many call good paying jobs but we got along. If I had been able to manage my employers part and my part of what they government told me they were placing aside for my retirement, I went through the records the other day and combined, my wife and I would not own over $1,000,000.00 without any investment but I do beleive would be a lot more due to interest and investments and would not need Medicare or Social Security to retire today.
However, many years ago, SS and Medicare was in theory dubbed just another tax and the person in SS and medicare was dubbed another give away program. See why you have to use the terminolgy. The Government took it from us by force, now they are giving it back a peice at a time and now getting ready to take it from us saying they do not have enough. In my mind they owe us "Our Money" back before they do anything else. Now understand I am only talking about the SS and Medicare part then I would gladly drop from the system and take care of my own.
5-13-2009 @ 10:42AM
drreese1 said...
Yes, but don't forget the illegals are the biggest theives! And the congress.
5-15-2009 @ 7:17PM
patlyn said...
Yes you are right. I see it everyday in the dental office I manage. These same people using welfare, or hiding their kids on welfare in state funded housing, are coming in with their nails manicured, coach purses, hair styled by professionals and each kid living at home still has a cell phone (where's the money for that??). They have no respect for the system, because the system doesn't force them to be accountable to anyone but the system. So that means, they can set up an appointment, personally be confirmed the day before and then not show up or call, and the time of the appointment at the private office is lost. We cannot bill them for that time according to the state. Private insured patients generally do not do this. So, Susan you are right. I KNEW what you were talking about. Keep talking girl!
5-14-2009 @ 7:14AM
Brian said...
The thing I find radically wrong is the congress and president don't pay into the SS program and conveniently have set up "thier own" retirement programs over the years. First thing I would do is abolish the Congressional/Executive retirement program and let our taxpaying? elected officials deal with what we all have to including Social Security, Health Insurance, etc.
5-14-2009 @ 8:37AM
Joe said...
while you make some good points, let me correct you on one point. ADHD has not been considered a disability for at least 7 years. I know this because I have two children with it.
5-14-2009 @ 8:45AM
JON said...
SORRY, BUT YOU NEED TO KNOW THAT CONGRESS IS THE BIG PROBLEM ....IF THEY WOULD HAVE NOT UASED THE FUNDS IN SS THERE WOULD BE MONEY TO SUPPORT SS....SO LETS GET STRIEGHT THE FACT IS PEOPLE ON DISAB. IS ONLY A SMALL % COMPARED TO RAPE THAT CONGRESS HAS DONE TO THE PROGRAM......JUST THINK ABOUT IT
5-14-2009 @ 9:36AM
kportguy1 said...
Socialism always fails, but it's the thought that counts.
5-14-2009 @ 9:49AM
Randall said...
Not only false medical claims, but wives are going in and saying their husbands have left them and the children and only sending them little or no money a month. But they have not left them and most have good paying jobs. And on top of that the Grandparents are going in and claiming they are raising the children with little or no support, and collect welfare for the children. Finger print them all and run drug tests on all of them also, and the first test should be a 90 day hair follicle test. If they fail any test, claims denied for 180 days. If they have more than account/claim 1 year suspension. Children cannot be claimed by more than one parent/gaurdian. And social Security, if you have not put in, you don't get any. if you are not 591/2 or (legitimately) medically diabled, you don't get any.
5-14-2009 @ 9:57AM
Dawn said...
Susan while I have never excepted one cent of government money, I have raised a child who is ADHD and unless you have you need to shut up. This is not a nonexistent issue, it's a real as the air you breathe. You are taking cheap shots and have no basis for them.
5-14-2009 @ 10:33AM
Kristi said...
Although I agree the problem is WAY too many on disability who don't need to be on it...ADHD is a real condition. It is suspected to be caused by heavy metal poisoning, the increase jumping dramatically when the vaccinations increased by unimagined proportions. In 1989, our kids got 10 shots. Now they get 36! I'm not anti vaccine....I just think they should be given slower, spread out, some should be optional since the actual disease isn't that bad and they should be 'greened' with mercury and much more coming out.