 |
| Rep. Adrian Smith |
Many Nebraskans depend on the Social Security and Medicare benefits they have earned by paying into these programs throughout their careers. Many more are planning on these benefits being in place as part of their retirement savings. However, both of these programs are unsustainable on their current path.
This concerning conclusion was made by the annual report of the Trustees of the Social Security and Medicare Trust Funds, a board made up mostly of Democrats appointed by President Obama. The report which was released in August does not offer specific fixes, but should serve as a call to action to find solutions for the shortfall in both programs.
There is a popular misconception the solvency issues of the Social Security and Medicare Trust Funds have occurred because money was taken from the funds and spent on other programs. This is not true. While reserved trust funds are lent through a mechanism similar to Treasury bonds, these funds have been and will continue to be paid on schedule and the interest paid accrues to the trust funds.
These long term solvency problems of these programs have occurred because they are paying out more in benefits than they are taking in from workers. An aging population and higher medical costs have contributed to the problem. Without addressing these changes the deficit for Social Security and Medicare will continue to grow larger.
Social Security operates by having today’s workers pay for today’s retirees. In 1945, the ratio of workers paying into the system per beneficiary was about 42 to 1. Today, the ratio is about 3 to 1. By 2033 the ratio is expected to fall to about 2 to 1.
The trustees report also found the combined Medicare Trust fund continues to face a “substantial financial shortfall.” It is worth noting the trustees report found Medicare Part D, which is very popular among seniors and includes many of the market-based principles Republicans have suggested applying to other parts of Medicare, will remain adequately financed for the “indefinite future.”
The President and some in Washington have preferred raising taxes and even cutting Medicare funding and diverting it to Obamacare to address these challenges. These actions are not solutions to the structural problems faced by these programs.
Republicans in the House of Representatives have passed relatively modest reforms which would keep Medicare solvent without changes for current beneficiaries. My colleagues and I on the Ways and Means Committee have held a number of hearings on Social Security reforms and are committed to finding solutions. Unfortunately, the Democrat-controlled Senate has blocked our reform efforts without offering constructive alternatives.
The trustees report concludes solutions are needed “sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.” I could not agree more. This report makes clear the consequences if we are unable to come to the table to find solutions for Social Security and Medicare. I hope all sides will find the courage to act.
There is a popular misconception the solvency issues of the Social Security and Medicare Trust Funds have occurred because money was taken from the funds and spent on other programs. This is not true. While reserved trust funds are lent through a mechanism similar to Treasury bonds, these funds have been and will continue to be paid on schedule and the interest paid accrues to the trust funds.
These long term solvency problems of these programs have occurred because they are paying out more in benefits than they are taking in from workers. An aging population and higher medical costs have contributed to the problem. Without addressing these changes the deficit for Social Security and Medicare will continue to grow larger.
Social Security operates by having today’s workers pay for today’s retirees. In 1945, the ratio of workers paying into the system per beneficiary was about 42 to 1. Today, the ratio is about 3 to 1. By 2033 the ratio is expected to fall to about 2 to 1.
The trustees report also found the combined Medicare Trust fund continues to face a “substantial financial shortfall.” It is worth noting the trustees report found Medicare Part D, which is very popular among seniors and includes many of the market-based principles Republicans have suggested applying to other parts of Medicare, will remain adequately financed for the “indefinite future.”
The President and some in Washington have preferred raising taxes and even cutting Medicare funding and diverting it to Obamacare to address these challenges. These actions are not solutions to the structural problems faced by these programs.
Republicans in the House of Representatives have passed relatively modest reforms which would keep Medicare solvent without changes for current beneficiaries. My colleagues and I on the Ways and Means Committee have held a number of hearings on Social Security reforms and are committed to finding solutions. Unfortunately, the Democrat-controlled Senate has blocked our reform efforts without offering constructive alternatives.
The trustees report concludes solutions are needed “sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.” I could not agree more. This report makes clear the consequences if we are unable to come to the table to find solutions for Social Security and Medicare. I hope all sides will find the courage to act.
No comments:
Post a Comment