MacIver News Service | June 13, 2018
By M.D. Kittle
MADISON, Wis. – At this week’s historic peace summit in Singapore, President Donald Trump showed North Korea dictator Kim Jong-un a Hollywood-style video, a trailer, if you will, of what life could be like under a denuclearized Korean Peninsula.
And the potentially horrifying consequences if the two leaders fail to find peace.
Perhaps congress should approach the looming Social Security crisis with the same sense of urgency.
A new report by the trustees of the Social Security system projects the day of reckoning at 2034, a scant 16 years away.
As U.S. Sen. Ron Johnson aptly points out, Social Security already is paying out more in benefits than the revenue it brings in through a dedicated payroll tax and interest earnings.
“The only reason they say it’s not insolvent is because you have the fiction of the Social Security Trust Fund, which is just a government bond,” the Oshkosh Republican told MacIver News Service Tuesday on the Vicki McKenna Show, on NewsTalk 1310 WIBA. “The Treasury pays off the benefits, then has to float another bond because we don’t have the money.”
We don’t have the money because congress has spent it – on all kinds of federal government programs.
In 2017, total expenditures into the Old Age and Survivors Disability Insurance (OASDI) program were $952 billion, according to the report. Total income was $997 billion, the brunt of that, $911 billion, in non-interest income and $85 billion in interest earnings.
Here’s the big trouble: “Under the Trustees’ intermediate assumptions, Social Security’s total cost is projected to exceed its total income in 2018 for the first time since 1982, and remain higher throughout the projection period.”
The trustees report found the Disability Insurance fund will hit official insolvency status by 2032. It all means that, unless congress acts, Social Security recipients will see a reduction in their benefits because there won’t be enough money to pay them. In short, you can only live on IOUs for so long.
Medicare Part A, or Hospital Insurance, has been living in deficits, with the fund expected to be spent by 2026.
The entitlement crisis is the fiscal problem that apparently is more daunting than sitting down with the nuclear missile-launching dictator of North Korea.
“Nobody is really adequately addressing the long-term insolvency of Social Security, and particularly not our federal health care spending – Medicare, Medicaid, Obamacare,” said Johnson, known around Capitol Hill as numbers guy.
Here’s where your money is going. Over the next 30 years Social Security will pay out trillions more in benefits than it takes in through payroll taxes, according to the current trajectories. There’s a massive deficit on the horizon, and a hefty interest payment on the rapidly growing entitlement debt – more than $60 trillion.
“If we don’t want to pay out $60 trillion over the next 60 years to our creditors we probably ought to address the deficit in spending in Social Security and Medicare, but again very few people are taking that very seriously,” Johnson said.
To fix the fiscal crisis, Johnson said, there needs to be a commitment to put everything on the table – means testing, extending age eligibility, changing expectations. And it will require people who will put the interests of the nation above politics.
Now that would be historic.
“Maybe if we could produce a very good video …” Johnson pondered.