Poor economy worsens Social Security's finances

[Nova78]

Poor economy worsens Social Security's finances | Comcast

The government says a bad economy and higher energy prices have worsened the finances of Social Security, shortening the life of the trust funds that support the program by three years.

The trustees who oversee Social Security say the program's trust funds will now run dry in 2033. Medicare's finances have stabilized but the program's hospital insurance fund is still projected to run out of money in 2024.

Medicare is in worse shape than Social Security because of rising health care costs. But both programs are on a path to become insolvent in the coming decades.

Good news seems to never end.

 

[Wiseacre]

Fan, meet shit.

 

[Staidhup]

Poor economy worsens Social Security's finances | Comcast

The government says a bad economy and higher energy prices have worsened the finances of Social Security, shortening the life of the trust funds that support the program by three years.

The trustees who oversee Social Security say the program's trust funds will now run dry in 2033. Medicare's finances have stabilized but the program's hospital insurance fund is still projected to run out of money in 2024.

Medicare is in worse shape than Social Security because of rising health care costs. But both programs are on a path to become insolvent in the coming decades.

Good news seems to never end.

Yet they still refuse to do away with the earned income contribution cap.

 

[waltky]

Dat's why Granny wants her 2nd stimulus check - to make up the shortfall...

Social Security Faces Unfunded Liability of $8.6T, or $73,167.83 Per Household
April 24, 2012 - Social Security faces an unfunded liability of $8.6 trillion, according to the 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.

The unfunded liability is the amount that has been promised in benefits to people now alive that will not be funded by the tax revenue the system is expected to take in to pay for those benefits. (The Social Security trustees calculate the unfunded liability for a period of 75 years into the future, from 2012 to 2086)

The $8.6 trillion in unfunded benefits Social Security is expected to pay over the next 75 years equals $73,167.83 for each of the 117,538,000 households the Census Bureau said were in the United States in 2010.

However, the report also shows that when considering the unfunded obligations over an “infinite horizon”—the period extending into the indefinite future—the $8.6 trillion shortfall balloons to $20.5 trillion. “Extending the horizon beyond 75 years increases the measured unfunded obligation,” the report said. “Through the infinite horizon, the unfunded obligation, or shortfall, equals $20.5 trillion in present value, which represents 3.9 percent of future taxable payroll or 1.3 percent of future GDP,” reads the report. The report adds that the 2012 estimate for unfunded obligations over the infinite horizon has increased from the $17.9 trillion in the 2011 report.

Source

See also:

Social Security’s financial forecast gets darker; Medicare’s outlook unchanged
Surging energy prices and a slower-than-expected economic recovery have worsened the financial outlook for Social Security compared with last year, while the picture for Medicare remains grim but essentially unchanged, according to annual forecasts released by the government Monday.

The trustees overseeing Social Security reported that the program’s trust fund will be depleted by 2033 — three years earlier than projected last year. After that, incoming Social Security tax revenue will cover only three-fourths of the benefits scheduled to be paid out through 2086, requiring Congress to either increase taxes or reduce benefits. The fiscal health of Social Security declined even more precipitously according to another, somewhat technical measure. This statistic reflects the difference over the next 75 years between projected benefits and the expected annual income of the American workers whose taxes will finance them. This measure reached its worst level since the early 1980s, when the trust fund’s imminent insolvency prompted Congress to enact a variety of changes.

At a news conference to release Monday’s reports, administration officials and program trustees took turns urging Congress to come up with the kind of bipartisan solution that has long eluded it. “Never since the 1983 reforms have we come as close to the point of trust fund depletion as we are right now,” warned Charles Blahous, one of the trustees for Medicare and Social Security. “Our window for dealing with [the shortfall] without substantially disruptive consequences is closing fairly rapidly.” Social Security’s bleak outlook is primarily driven by the ever-larger numbers of people in the baby boom generation entering retirement.

And the trustees said a major reason that this year’s 75-year forecast was worse than the last was simply that they were measuring one year further into the future. They also pointed to two unforeseen economic factors: Rising energy prices necessitated a larger cost-of-living increase to benefits, and worker earnings — and the resulting payroll taxes used to pay for Social Security — were lower than than expected. In both cases, the impact will resound for years. The trustees projected that Medicare’s trust fund, which covers the part of the program that funds hospital care, will run out in 2024, the same estimate in last year’s report.

At that point, incoming revenue from Medicare taxes will be enough to cover 87 percent of annual expenses. That share will decline to about 67 percent by mid-century, then rise to 69 percent by 2085.Those figures are slightly worse than last year’s projections. The trustees attributed the difference to changes in methodology that they adopted on the recommendation of a technical advisory panel. For the third year running, Medicare’s nonpartisan chief actuary, Rick Foster, attached a letter to the report warning that the program’s true long-term prospects are even more dire than projected because the trustees made the “unreasonable” assumption that Congress will not overrule substantial Medicare spending curbs in President Obama’s 2010 health-care law.

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[Mr. Shaman]

Poor economy worsens Social Security's finances

The government says a bad economy and higher energy prices have worsened the finances of Social Security, shortening the life of the trust funds that support the program by three years.

The trustees who oversee Social Security say the program's trust funds will now run dry in 2033. Medicare's finances have stabilized but the program's hospital insurance fund is still projected to run out of money in 2024.

Medicare is in worse shape than Social Security because of rising health care costs. But both programs are on a path to become insolvent in the coming decades.

Good news seems to never end.

You get all these....and, many MORE....with....

BULLSHIT, THE TEABAGGERS TELL US!

"Which federal program took in more than it spent last year, added $95 billion to its surplus and lifted 20 million Americans of all ages out of poverty?

Why, Social Security, of course, which ended 2011 with a $2.7 trillion surplus.

That surplus is almost twice the $1.4 trillion collected in personal and corporate income taxes last year. And it is projected to go on growing until 2021, the year the youngest Baby Boomers turn 67 and qualify for full old-age benefits."​

 

[iamwhatiseem]

BTW - other economist put the SS time-bomb more like early 2020's. We're talking less than 10 years.
What the government accounting doesn't factor is in increased national debt payments, and if there are any interest rate hikes.
But hey - let's add on national healthcare...that'll fix the problem!!