You're cooking donuts in grease on your stove. The grease catches fire. What do you do first? Extinguish the fire? Mow the lawn?
Every day another Democrat announces he's running for president and, in the same breath, promises a new entitlement program.
Why don’t they first promise to fix Social Security and Medicare? On April 22, the Social Security Board of Trustees released its annual report on the long-term financial status of the two Social Security Trust Funds.
The combined asset reserves of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds are projected to become depleted in 2035.
The fact the reserves of both funds will be depleted, does not mean that all Social Security payments will cease. Rather, it means that they will come only from current revenues. Those revenues, however, will be sufficient to pay only about 80 percent of scheduled benefits. As such, a person slated to receive an OASI benefit of $1,800 per month will find his benefit reduced to $1,440 -- unless Congress provides the funds additional money.
In 2018, Social Security paid benefits of nearly $989 billion to about 63 million beneficiaries. An estimated 176 million people had earnings covered by Social Security and paid payroll taxes. The deficit over the next 75 years is projected to be 2.78% per year.
On April 22, 2019 the Medicare Board of Trustees released its combined annual report on the long-term financial status of Medicare. Medicare is the second-largest social insurance program in the U.S., with 59.9 million beneficiaries and total expenditures of $741 billion in 2018.
Since in 2002, there has been one combined report discussing both the Hospital Insurance Program (Medicare Part A) and the Supplementary Medical Insurance Program (Medicare Part B and Prescription Drug Coverage).
The hospital insurance (HI) trust fund, which provides the funding for Medicare Part A hospital and inpatient benefits, is expected to be depleted in 2026. At that time, all benefits will have to be paid from the funds current revenues. Current income will only cover 89% of fund costs, unless Congress provides additional money. Without additional funding, by 2034 current annual income will only cover 77% of current annual costs.
Supplementary Medical Insurance (SMI) Trust Fund, which covers Parts B & D, will remain adequately financed into the indefinite future because current law provides financing from beneficiary premiums plus general treasury revenues each year to meet the next year’s expected costs.
However, the aging population and rising health care costs cause SMI projected costs to grow steadily from 2.1 percent of GDP in 2018 to 3.7 percent of GDP in 2038. The bottom line is this: The trustees project that total Medicare costs (including both HI and SMI expenditures) will grow from approximately 3.7 percent of GDP in 2018 to 5.9 percent of GDP by 2038.
So is there a problem? Social Security and Medicare trustees all agree that there is:
"Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare. Lawmakers should address these financial challenges as soon as possible. Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare."
So what are congressional Republicans doing to fix Social Security and Medicare? Nothing! Every time they try, they hand Democrats a cudgel.
When President George W. Bush broached the subject, the bashing began: "Republicans want to privatize Social Security; undermine Medicare!” Bush's plan was more "roulette than reform!" quoth Sen. Harry Reid.
So, what are the congressional Democrats doing to fix Social Security and Medicare?
During the eight years of the Obama administration, Democrats did absolutely nothing. Now, instead of setting out a fix, they’re trotting out a blizzard of new free entitlement programs:
Tuition for All, $70 billion a year; Employment for All, $400 billion a year; Green New Deal, $600 billion a year; Medicare for All, $3.2 trillion a year; reparations to descendants of deceased slaves, Interned Japanese-Americans, and descendants of Native Americans; and forgiveness of student debt, $640 billion.
Rather than shoring up the two great programs we already have that need it, 20-plus Democrats are bounding about the county as if running to be the next Santa Claus. So, what happens if you ignore a grease fire in your kitchen?