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Chief Actuary for SS - Raid the Retirement Fund!
Stephan Goss, the chief actuary for Social Security (SS) provided a detailed report on the status of the SS Disability Fund (DI) to the House of Representitives. The short story is that DI is going bust in a few years. The options to fix this problem were spelled out in the report. The extremes of the required "fix" range from an immediate cut in DI benefits of 16%, or an increase in DI payroll taxes of 20%.
Nothing new there. But, there is a "Plan B" for the DI Fund. The solution is to raid the SS Retirement Fund for the deficits at DI:
A simple tax-rate reallocation between OASI and DI, as was done in 1994, could equalize the financial prospects of the trust funds avoiding reserve depletion until 2033.
Note: "Simple tax-rate reallocation" means $40+b a year....
Bingo! The raid on the retirement fund results in no cuts in benefits, and no new taxes. What's not to like about that result? The gutless wimps in D.C. would love to kick the can down the road a decade, therefore the Raid solution is an obvious choice. (The consequence of the Raid would be to reduce the expected life of the Retirement Trust Fund by as much as five years,.)
This is not the first time this has come up. The Congressional Budget Office, in its 2/5/13 report on the SS Trust Funds had these words in a footnote:
CBO’s baseline assumes that the Commissioner will pay DI benefits in full even after the trust fund is exhausted.
Note: For a discussion of the CBO report, see my article from 2/10/13 (Link).
Okay, we now have two legs of the government who have (functionally) suggested that a raid on the OASI fund is a possible fix for DI. Lightening does not strike twice in the same place very often, especially in Washington. The idea of raiding one fund to preserve another, has just gotten another big supporter. If the folks at AARP understood what was being proposed - they would flip their wigs!
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The True Cost of the Disability Program
I have a list, (it's pretty short) of the folks who I think are "doing the right thing" in Washington. Stephen Goss was on that list. I'm disappointed with him and his presentation of the "Facts" about the DI program.
Mr. Goss's report to the House ran nineteen pages; there are 14 charts. (Link) Everything a Congressman (or the public) could ever want to know about the DI program is spelled out in detail.
But, Goss completely left out the most critical cost of DI. The Chief Actuary failed to identify a cost directly related to DI. The numbers are big - $80b in 2012. The estimate is for more than a trillion of over the coming decade. If you look beyond that time horizon, the costs that Goss failed to identify are in the mega-trillions.
Goss failed to provide the full picture when he did not disclose the DI costs to Medicare. Every individual who gets DI benefits ALSO gets Medicare.
In a report dated 3/14/2013 (Link), the Congressional Budget Office (CBO) accurately described the real costs of DI:
Total government spending on DI beneficiaries is substantially higher than DI expenditures alone.Disabled beneficiaries receive coverage under Medicare, regardless of their age.
The cost of Medicare benefits received by DI beneficiaries was about $80 billion in 2012; CBO expects that it will be $130 billion in 2023.
I give Stephen Goss an "F" for failing to provide all of the information needed to evaluate the DI program. How do you sweep a trillion dollars under the carpet?
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My idea for Ben....
Tax all central banks in the country at 200% net income.
Can you imagine the politicians when they figure out that the more they borrow, the more they collect in taxes?
Would the central bank raise rates? For what? To pay more in tax?
+5 'Awesome' post, for the vintage cheesecake upskirt maid pic
Brightening our moment of 'financial crisis'
Perhaps Bruce Krasting will soon be rivalling William Banzai with his nude Visual Combat babes ...
Except the dimple on her chin makes her look like Michael Jackson dressed in drag.
You were looking at her chin?
Well played!
Would've also accepted, "Do you know how I know you're gay?"
Not that there's anything wrong with that . . .
Sure there is, but back on topic, thanks for bringing it to my attention and ruining all my sexual fantasies about the babe. Here's hoping you take it on the chin.
The collar is hiding her Adam's apple
The butt-chin (a la John Travolta) is a classically masculine feature; I never saw a woman with one yet.
Wrong - Elisha Culbert, Demi Lovato there are tons of them...
And my personal favorite - Christina Hendricks..... grrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Christina has exactly the type of body from the 40's pinup era.
Stuff strutted about these days is too skinny.
Stuff strutted about these days is TOO SKINNY? Say what?! Where do you live, knukles?
Where I live, I'm surrounded by BLUBBER. And no, I do not live in an Inuit town.
I believe he means a full figured woman with curves, like Marilyn Monroe - not a beachball.
I drove across country this summer for vacation. Stopped in a Joplin Missouri McDonalds which had a Big Mac 2 for $4 special.
You should have seen the size of the women - fucking huge pigs.
You're right! She has a MJ look to her.
I wonder if this is what he had in mind when he started changing his look.
He was trying to look like Diana Ross. He ended up more like the Crypt Keeper.
He really jumped the shark when he tried to install that tiny, pointed, anime-style nose.
One can play with Mr. PotatoHead's parts only so many times before they begin to wear out and fall out.
No, I believe he trying to make his apperance more palatable to children, especially white children.
Remember he was a monstrous child molester of the first order.
In reality all he ended up looking like was a ghoul.
My daughters believe that eventually, we all get the faces we deserve.
How scary is that?
That is very scary, Kaiserhoff.
Talk about scary. We're in Great Depression 2.0 minus the moral compass and work ethic.
But at least this time we have zerohedge. Talk about awesome!
My droid 4 doesn't recognize zerohedge as a word. I'm will add it to my phones dictionary. How should I define it?