How sick is Social Security?

By Daniel Hines  
Editor/publisher, 
America's Seniors/TodaysSeniorsNetwork.com

How sick is Social Security?  That's the question asked recently by The Motley Fool, a must-read for people interested in investments.

The Fool avoids the political discussion of who is right and who is wrong about SS, but it is obvious that even with its disclaimer, The Fool believes that a heads-up is in order to policy-makers.

Here's the Fool's take on things:

"As they do every year, the trustees of the Social Security and Medicare trust funds released their annual report on whether you'll get anything in return for the 7.5% in FICA taxes taken out of each paycheck. Here are the results:

• The reserves in the combined Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Fund will begin shrinking in 2017. By 2041, they will be gone (which is better than 2038 -- the depletion date projected last year).
• The Hospital Insurance Trust Fund (part of the Medicare program) will begin paying out more than it takes in by 2016, which will deplete all reserves by 2030 (one year later than previously projected). "

As The Fool notes, this seems like a long time off.  For those of us in our early 60s, the odds are that none of this will affect us since if we are still around, it is unlikely that we will be able to do much with whatever funds might be left, anyway.

However, the definition of senior is changing.  One needs only to look at the Supreme Court which in ones of its most misguided judgments ever, was true to its conservative, pro-business leanings and ignored the obvious issue of age discrimination.

The Bush Administration's appointees to key posts also reflect the 'let them eat cake' philosophy with comments such as follows:

Paul H. O'Neill (Secretary of the Treasury), Elaine L. Chao (Secretary of Labor), Tommy G. Thompson (Secretary of Health and Human Services

•  "Bringing Social Security into actuarial balance over the next 75 years could be achieved by either a permanent 13% reduction in benefits or a 15% increase in payroll tax income, or some combination of the two."
  

• "Bringing HI into actuarial balance over the next 75 years could be achieved by either an immediate increase in payroll tax income of almost 70% (e.g., by raising the payroll tax rate from 1.45 to 2.46 % on both employers and employees) or an immediate reduction in program outlays of 38% from their currently projected levels, or some combination of the two."

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