Warm Southern Breeze

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Republicans: “THE SKY IS FALLING!! THE SKY IS FALLING!!”

Posted by Warm Southern Breeze on Monday, September 6, 2021

Spendthrift Democrats ignore looming bankruptcy of Social Security and Medicare
By Liz Peek, Opinion Contributor — 09/04/21 03:00 PM EDT
Liz Peek is a Fox News contributor, conservative commentator, former partner of the now-defunct major bracket Wall Street investment banking firm Wertheim & Company, who worked as a oil industry research analyst on Wall Street over 20 years.

https://thehill.com/opinion/finance/570809-spendthrift-democrats-ignore-looming-bankruptcy-of-social-security-and


Liz Peek’s “bash piece” is purely tripe.

Let’s take it line-by-line — all my remarks are highlighted in GREEN and some are emboldened.

Here’s her opening line:

Are Democrats serious about confronting the impending collapse of Social Security and Medicare? It sure doesn’t seem so.

WOLF! WOLF! WOLF! Remember the Aesop’s fable of “The Boy who Cried ‘WOLF!'”?

Next line:

Instead of focusing on the looming bankruptcy of these programs, Democrats are pushing to spend $4-$5 trillion on a progressive wish-list of expensive new federal giveaways. Perhaps they believe that promising voters free college, free child care, free elder care and so much more will distract them from realizing that our most important safety nets are falling into disrepair.

“Federal giveaways,” she writes. You mean like TAX CUTS FOR THE WEALTHY & THEIR CORPORATIONS? That’s CORPORATE WELFARE. And we mustn’t forget Jeff Bezos who paid NO INCOME TAX, nor did his MEGA CORPORATION AMAZON. And then, there’s the “Paris Hilton Tax Cuts,” which DOES NOT TAX inheritance… even though it’s like winning the lottery. They did NOTHING TO EARN IT. And that’s just a drop in the bucket.

Next line.

Moreover, President Biden and congressional Democrats want to significantly hike taxes to pay for shiny new entitlements. But taxpayers are already facing big hits just to maintain the ones we already have.

Refer to the preceding paragraph about income tax rates for individuals, and corporations, and those who do NOT pay income taxes — the wealthy. They DO NOT see the paying of taxes, including income taxes, as being a patriotic duty. And yet, it is. During the 2-term Republican administration of President Dwight David Eisenhower, income tax rates upon the wealthiest Americans was 90%+, and upon corporations was 50%+. AND DURING HIS ADMINISTRATION, OUR NATION GREW LIKE GANGBUSTERS. Some complain about “tax and spend.” And yet, that is EXACTLY how it works. And the spending goes RIGHT BACK INTO THE PRIVATE SECTOR, which is where it originated. Presently, in 2021, the highest personal income tax rate is 37%, while the highest corporate income tax rate is 21%.

Next couple of paragraphs.

This week, the trustees of the Social Security and Medicare programs released their annual reports; the news is not good.

The bottom line: Both funds are running out of money, faster than expected. Both Medicare and Social Security will need to be propped up, the sooner the better. Specifically:

    • Medicare’s Part A Hospital Insurance trust fund will go broke in five years; outlays are projected to exceed income by nearly $600 billion over the next 10 years. Over the longer term, we would need a 27 percent increase in the payroll tax or a 16 percent spending cut to keep the program running.
    • Gross spending on Medicare will increase from 4.1 percent of our entire economy this year to more than 6 percent over the next 20 years.
    • Social Security will become insolvent in 13 years. Under current law, the administration cannot guarantee full benefits to today’s retirees.
    • The trustees’ report says that Social Security will run cash deficits of $2.4 trillion over the next 10 years, equal to 2.3 percent of total taxable payrolls.
    • Social Security is estimated to post a cash-flow deficit of $147 billion this year, equal to almost 0.7 percent of GDP

The date of projected insolvency for these entitlements moved closer over the past year; the proposed remedies from the Committee for a Responsible Federal Budget (CRFB) become more draconian as time goes on.

The link provided by the author, Liz Peek, was NOT to an official United States Government website. It was to a group calling themselves “Committee for a Responsible Federal Budget.” And even that group DID NOT present a link to official sources. Yeah… that sounds about right. Find someone who’ll agree with you on everything you say, and present that echo chamber as reality.

Here’s the “2021 ANNUAL REPORT OF THE BOARDS OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE AND FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST FUNDS“:
https://www.cms.gov/files/document/2021-medicare-trustees-report.pdf

Here’s the Social Security Administration’s “SUMMARY OF THE 2021 ANNUAL REPORTS“:
https://www.ssa.gov/OACT/TRSUM/index.html

Here’s the “Fact Sheet: 2021 Social Security and Medicare Trustees Reports” from the United States Treasury:
https://home.treasury.gov/system/files/136/Fact-Sheet-2021-Social-Security-and-Medicare-Trustees-Reports.pdf

Here’s the Social Security Administration’s “Social Security 2021 Trustees Report.” (To navigate to the report, click on ” Read our press release” – which will take you here: https://www.ssa.gov/news/press/releases/2021/#8-2021-2, then, scroll to the bottom and click on “View the 2021 Trustees Report” at https://www.ssa.gov/OACT/TR/2021/. )
https://blog.ssa.gov/social-security-2021-trustees-report/

Here’s the page for the 2021 OASDI Trustees Report, officially called “The 2021 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.
https://www.ssa.gov/OACT/TR/2021/

Excerpts from the “Fact Sheet: 2021 Social Security and Medicare Trustees Reports” are as follows:

Based on our best estimates, the 2021 reports show:

• The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will be able to pay scheduled benefits on a timely basis until 2033, one year earlier than reported last year. At that time, the fund’s reserves will become depleted and continuing tax income will be sufficient to pay 76 percent of scheduled benefits.

• The Disability Insurance (DI) Trust Fund, which pays disability benefits, will be able to pay scheduled benefits until 2057, 8 years earlier than in last year’s report. At that time, the fund’s reserves will become depleted and continuing tax income will be sufficient to pay 91 percent of scheduled benefits.

• The OASI and DI funds are separate entities under law. The report also presents information that combines the reserves of these two funds in order to illustrate the actuarial status of the Social Security program as a whole. The hypothetical combined OASI and DI funds would be able to pay scheduled benefits on a timely basis until 2034, one year earlier than reported last year. At that time, the combined funds’ reserves will become depleted and continuing tax income will be sufficient to pay 78 percent of scheduled benefits.

• The Hospital Insurance (HI) Trust Fund, or Medicare Part A, which helps pay for services such as inpatient hospital care, will be able to pay scheduled benefits until 2026, the same year as reported last year. At that time, the fund’s reserves will become depleted and continuing total program income will be sufficient to pay 91 percent of total scheduled benefits.

• The Supplementary Medical Insurance (SMI) Trust Fund has two accounts: Part B, which helps pay for services such as physician and outpatient hospital care, and Part D, which covers prescription drug benefits. SMI is adequately financed into the indefinite future because current law provides financing from general revenues and beneficiary premiums each year to meet the next year’s expected costs. Due to these funding provisions and the rapid growth of its costs, SMI will place steadily increasing demands on both taxpayers and beneficiaries.

• The Trustees are including in the report for the fifth consecutive year a determination of projected excess general revenue Medicare funding, as is required by law whenever annual tax and premium revenues of the combined Medicare funds will be below 55 percent of projected combined annual outlays within the next seven fiscal years. Under the law, two consecutive such determinations, as is the case again this year, constitute a “Medicare funding warning.” Under current law and the Trustees’ projections, such determinations and warnings will recur every year through the long-range projection period.

Next paragraph in the OpEd by Liz Peek.

In other words, the longer we wait to shore up these programs, the stiffer the increases in taxes will have to be or the fewer the number of retirees who can count on receiving benefits.

To achieve long-term solvency for Social Security, the CRFB advises, would require a 27 percent hike in the payroll tax today; if legislators don’t act until 2034, when the program will be broke, that payroll tax hike will be 34 percent.

That is, even if Congress acts today, the increase in the deduction from a worker’s wages will be more than three percentage points; if they wait, it will be over 4 percentage points. That’s a major hit to paychecks.

So, let’s stop just a moment and talk about what THE REAL PROBLEM IS WITH SOCIAL SECURITY. It’s used by Congress as a “slush fund,” meaning that, instead of using the Social Security Trust Fund (SSTF) to EXCLUSIVELY pay for claims upon it, Congress critters – Republican & Democrat alike – use the money in the SSTF to pay for their “pet projects,” whatever those projects may be — the F-35, the 20-year failed Afghanistan War, or any other thing.

Think of it this way: At work you have a lock-box with $100 petty cash, and employees can borrow from it to pay for all kinds of things, ranging from parking, to lunch, to dry cleaning, etc. And in every case, when they borrow, they replace the money borrowed with an IOU. And typically, the money is repaid the next day, or no later than next pay period (typically every 2 weeks). But, what if ALL the money was borrowed, and the IOUs were totaled? The sum of the IOUs should come to $100, and the Petty Cash Fund’s books would balance. Right? But the problem is, that there’s NO MONEY, THERE’S NO CASH, because it’s ALL been REPLACED with IOUs.

That’s what Congress has been doing for the longest time with the SSTF. They “borrow” from the SSTF, and replace it with Treasury bills, which is a type of Federal IOU – a promise to pay a certain amount (with interest) at a certain time in the future. The United States Treasury, then issues Federal Reserve notes to the Federal Banks, which then distribute them further to the banks in their districts, because they are instruments of indebtedness (future payables) of the United States Government — in essence, a Federal IOU.

If, as then-Vice President Albert Gore, Jr. had suggested when he was campaigning for President, we were to pass a law that made the SSTF a PERMANENT “HANDS OFF!” ACCOUNT, used ONLY to pay for claims upon it, the SSTF would be solvent the very next day, practically into perpetuity. But Congress doesn’t want to do that, because it would remove their Quick-n-Easy source of cash for their pet projects — a LEGAL “slush fund.”

Again, if things continue their merry way as they have been for the past umpteen years, Social Security will need general tax revenues (as Ms. Peek suggests) to help pay for benefits. But to prevent that from happening, make the SSTF a lock-box fund, and the the interest savings (the amount of money it costs the U.S. Government to borrow), should put right back into the SSTF, as well.

Even CBS News reported on that very matter March 16, 2010, by writing, in part, that:

“For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits – billions more each year.

“Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes – nearly $29 billion more.

“Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs – in the form of Treasury bonds – which are kept in a nondescript office building just down the street from Parkersburg’s municipal offices.

“Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn’t be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

“Social Security’s shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program’s finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there’s concern that the looming crisis will lead to reduced benefits.”

Next paragraph in Ms. Peek’s OpEd.

The other approach is to cut retiree benefits. The CRFB estimates that, “Social Security solvency could be achieved with a 21 percent across-the-board benefit cut today, which would rise to 26 percent by 2034. Cuts to new beneficiaries would need to be 25 percent today,” but “even eliminating benefits for new beneficiaries in 2034 would not be enough to avoid insolvency.”

Is anyone listening?

Once again… Liz Peek cries WOLF! WOLF! WOLF! WOLF!

Next line.

The alarming reports were greeted with silence from the left, including from Sen. Bernie Sanders (I-Vt.), head of the Budget Committee and author of the $3.5 trillion “social infrastructure” bill that Democrats hope to pass via reconciliation. Apparently, for Sanders and his progressive colleagues, new programs are better than the old ones, even though most Americans rely on Social Security and Medicare.

In fact, in July, Sanders and Sen. Chris Van Hollen (D-Md.) introduced a bill that would exacerbate Social Security’s financial problems. According to the Maryland senator’s website, the proposed legislation would “extend Social Security benefits to age 26 for students who are survivors, children of disabled workers, and eligible grandchildren of retired workers.”

While it is true that benefits are paid to children or workers who have died young or who are disabled, Social Security was not intended to support young people through college, as is the purpose of Sanders’s and Van Hollen’s bill. Given the current projections reported by the trustees, adding to the demands on the program’s finances is reckless.

For too long, our nation has NEGLECTED caring for ourselves, and has instead, pandered to the wealthy, and well-to-do, and their corporations… including their Wall$treet bankster pals, the titans of industry, and global free traders. While I make no claims to be a particularly religious man, I an reminded of this verse:

“Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.
1 Timothy 5:8 (NIV)

That is the essence of what we have done in America – neglected our own relatives and household. We have merely “thrown them a bone” — a disgustingly shameful act. And sadly, it shows. Our elected officials — Republicans, primarily, but some BIG MONEY Democrats share in their shame — have loved money more than life, loved money more than people, loved money more than anything, and they have prostitute themselves on the private altars of corporate profiteers. 

Families working two jobs each simply to survive… some living out of their car because they’ve been evicted for not being able to pay rent, or don’t make enough to pay rent – even with TWO breadwinners working TWO jobs. One needn’t be a rocket scientist or brain surgeon to figure out that something ain’t right. And then, let’s not talk about those same families and more not being able to stay healthy because they can’t afford groceries, neither can they afford to seek regular healthcare, much less emergency healthcare. And if they’re lucky enough to have a car, and it should break down, or need repair… they’re just up a creek without a canoe. And for all the ones who have opened “Go Fund Me” accounts to pay for the funerals of their loved ones who died of coronavirus, drowned in floods caused by deliberate negligence of response to climate change, or were murdered, either by an anonymous assailant, or the police… and Republicans want to FORCE those women to bear children, even though they can’t afford to feed, clothe, or house them. 

And our elderly, who are but mere afterthoughts to most… they have similarly been neglected by everyone but the swindlers and hucksters who want their pensions.

Next paragraph by Liz Peek.

In the same vein, Sanders wants to lower the eligibility age for Medicare from 65 to 60 or 55 and to expand coverage to include dental and vision outlays. He proposes paying for these changes by allowing Medicare to negotiate prices with drug companies.

Studies have shown that lowering the eligibility age to 60 would cost as much as $100 billion per year, while a 2019 plan to add vision and dental coverage was estimated to cost $350 over 10 years. Estimates of savings from Medicare negotiating drug prices – totally some $500 trillion over 10 years – do not come close to covering the added costs.

Ms. Peek obliquely suggests that the retirement age should be increased to the point where there’s NO POSSIBILITY that ANY Social Security could be drawn, because they would first die before being able to draw any of it. And then, the money would stay in the account, unused.

Next paragraph.

Earlier this year President Biden fired Andrew Saul, a business executive who was commissioner of the Social Security Administration. Saul worked under both Republican and Democratic presidents, initially as chair of the Federal Thrift Investment Board, where he modernized the organization that provides retirement savings plans for military and federal employees. The Republican got such high marks for his stewardship that the federal employees unions backed his reappointment by President Obama.

Biden fired Saul not because he was doing a bad job, but apparently because he was doing a good job cutting down on fraud and waste in an effort to make the Social Security Administration more efficient, even as he improved services to clients. Biden has not nominated a successor to Saul, despite Social Security being the largest single item in our federal budget. And that is how serious Democrats are.

Ms. Peek cites NO SOURCES, and supplies NO EVIDENCE to back up her specious claim that Andrew Saul “was doing a good job.” NONE. ZERO. ZILCH. NADA. Before he began receiving plum political appointments, Andrew Saul was a manager of 2 women’s garments retail stores. Beginning in the Bush II administration he was a fund-raiser for him, and when he was appointed by the 45th President in 2019, he knew NOTHING about the Social Security Administration – which should have disqualified him. But again, his was yet another plum appointment. Mr. Saul was very angry when he was fired by President Biden… because he refused to resign. And, he even threatened to sue, falsely claiming that his firing was “unconstitutional.” Sore loserman. Good riddance. Mr. Saul’s acting replacement is Kilolo Kijakazi, a former fellow with the progressive Urban Institute, whom President Biden appointed on Inauguration Day as Deputy Commissioner for Retirement and Disability Policy.

The greater point being, is that Republicans have NEVER liked the idea of Social Security, Republicans have NEVER liked the idea of Medicare or Medicaid, Republicans have NEVER liked the idea of Food Assistance, Republicans have NEVER liked the idea of an Income Tax, and they would be happy as a pig in mud if all of those programs, and more, were abolished in favor of their “winner takes all” private, Wall$treet-traded for-profit businesses.

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