Will GOP Cut Social Security And Medicare Before Or After The 2018 Election?

[Jason Harvestdancer]

They don't want to eliminate it.

Yes they do. It'd be a 12.4% tax cut!

Good job on believing what you are supposed to believe.

 

[Jimmy Higgins]

They don't want to eliminate it.

Yes they do. It'd be a 12.4% tax cut!

Good job on believing what you are supposed to believe.

Well, they tried "privatizing" Social Security in '05... didn't happen when people found out it wouldn't do anything for the solvency of the program. Now they are financing a tax cut based on cuts to Medicare and other frivilous things like military retirement funds.

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Here is my guess:
they will dip into funds prior to 2018.

After 2018, they will make cuts and privatize SS.

It isn't that simple though. Their last two attempts at passing legislation included using a trick ploy which requires them just 51 votes to pass it. Privatizing SS without 60 votes will be impossible.

 

[Alcoholic Actuary]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

 

[Copernicus]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

Maybe they have something like "Obamacare for Seniors" in mind? Premiums for seniors would be really high, since their chances of coming down with serious illnesses is a little higher than the general population.

 

[Alcoholic Actuary]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

Maybe they have something like "Obamacare for Seniors" in mind? Premiums for seniors would be really high, since their chances of coming down with serious illnesses is a little higher than the general population.

Maybe. But the whole point of those programs is that the 'seniors' don't have jobs any more with which to pay premiums. Furthermore, they could easily argue that they've ALREADY paid the premiums (albeit too little).

aa

 

[Horatio Parker]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

Surely they can figure some kind of way to allow private companies to rake off a hefty share...

 

[untermensche]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

Surely they can figure some kind of way to allow private companies to rake off a hefty share...

Privatization means instead of a government obligation to pay you no matter what you now get to enter the casino called the stock market and take your chances. There will be winners and losers. Absolutely nothing is guaranteed and there are no obligations.

And since the game is completely rigged money from citizens who have no control in just suckers money.

 

[Jimmy Higgins]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

Surely they can figure some kind of way to allow private companies to rake off a hefty share...

Privatization means instead of a government obligation to pay you no matter what you now get to enter the casino called the stock market and take your chances. There will be winners and losers. Absolutely nothing is guaranteed and there are no obligations.

And since the game is completely rigged money from citizens who have no control in just suckers money.

Ah... memories of the George W Bush privatization of SS plan... where you needed to make around 3% on your investment... to break even.

 

[Alcoholic Actuary]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

Surely they can figure some kind of way to allow private companies to rake off a hefty share...

Privatization means instead of a government obligation to pay you no matter what you now get to enter the casino called the stock market and take your chances. There will be winners and losers. Absolutely nothing is guaranteed and there are no obligations.

And since the game is completely rigged money from citizens who have no control in just suckers money.

It's something like $40,000,000,000,000 in unfunded liability. You can't just slide that over to the private sector.

It would be more like walking into a casino that doesn't have any money to pay you, and you can only ever win the exact amount that you bet.

aa

 

[Horatio Parker]

Privatization means instead of a government obligation to pay you no matter what you now get to enter the casino called the stock market and take your chances. There will be winners and losers. Absolutely nothing is guaranteed and there are no obligations.

And since the game is completely rigged money from citizens who have no control in just suckers money.

It's something like $40,000,000,000,000 in unfunded liability. You can't just slide that over to the private sector.

It would be more like walking into a casino that doesn't have any money to pay you, and you can only ever win the exact amount that you bet.

aa

Are these projections realistic? Don't rising wages e.g. increase UL projections? Lowering wages to improve the 75 year outlook makes no sense at all...

 

[Alcoholic Actuary]

Privatization means instead of a government obligation to pay you no matter what you now get to enter the casino called the stock market and take your chances. There will be winners and losers. Absolutely nothing is guaranteed and there are no obligations.

And since the game is completely rigged money from citizens who have no control in just suckers money.

It's something like $40,000,000,000,000 in unfunded liability. You can't just slide that over to the private sector.

It would be more like walking into a casino that doesn't have any money to pay you, and you can only ever win the exact amount that you bet.

aa

Are these projections realistic? Don't rising wages e.g. increase UL projections? Lowering wages to improve the 75 year outlook makes no sense at all...

Well there is only around $2 trillion in the trust fund so benefits are still 97% unfunded. We can bicker all day on the assumption set and whether that's really 94% or 90%, but it's still nowhere near the funding level it needs to be to have the private sector take over.

aa

 

[Philos]

Maybe. But the whole point of those programs is that the 'seniors' don't have jobs any more with which to pay premiums. Furthermore, they could easily argue that they've ALREADY paid the premiums (albeit too little).

aa

aa,

That's commie talk! (irony alert )

A.

 

[Horatio Parker]

Are these projections realistic? Don't rising wages e.g. increase UL projections? Lowering wages to improve the 75 year outlook makes no sense at all...

Well there is only around $2 trillion in the trust fund so benefits are still 97% unfunded. We can bicker all day on the assumption set and whether that's really 94% or 90%, but it's still nowhere near the funding level it needs to be to have the private sector take over.

aa

I would expect a pay as you go system to have large UL.

But 'scuse me I didn't mean to attempt actuarial issues to debate with a pro, I was thinking along the lines that a privatization effort will find a different way to approach the problem. So UL would become irrelevant(which they are from a purely financial perspective).

I mean, there are those do want it privatized, and not because anyone thinks it'll be unprofitable.

 

[Jimmy Higgins]

Are these projections realistic? Don't rising wages e.g. increase UL projections? Lowering wages to improve the 75 year outlook makes no sense at all...

Well there is only around $2 trillion in the trust fund so benefits are still 97% unfunded. We can bicker all day on the assumption set and whether that's really 94% or 90%, but it's still nowhere near the funding level it needs to be to have the private sector take over.

aa

The W plan would have required $2 trillion in debt to put the privatization plan together.

 

[Alcoholic Actuary]

Are these projections realistic? Don't rising wages e.g. increase UL projections? Lowering wages to improve the 75 year outlook makes no sense at all...

Well there is only around $2 trillion in the trust fund so benefits are still 97% unfunded. We can bicker all day on the assumption set and whether that's really 94% or 90%, but it's still nowhere near the funding level it needs to be to have the private sector take over.

aa

I would expect a pay as you go system to have large UL.

But 'scuse me I didn't mean to attempt actuarial issues to debate with a pro, I was thinking along the lines that a privatization effort will find a different way to approach the problem. So UL would become irrelevant(which they are from a purely financial perspective).

I mean, there are those do want it privatized, and not because anyone thinks it'll be unprofitable.

I'm not trying to debate. On the contrary, I encourage questions and will attempt to answer and address points as best I can.

So a pay as you go system is illegal outside of the federal government - so there's that hurdle to overcome. Let's say we get past that and somehow hand over a pay as you go system to ?? Will it be 1 company, will the companies compete? Is participation compulsory or do you get the choice to stick your FICA under your mattress? What happens when the company(ies)? go out of business? (Let me guess, benefits will be backstopped by the Federal Government).

I'm sure there is a way to throw the private sector some fees for managing what amounts to a pension fund - even one that's empty. It would just be the most ridiculous substitute for what we currently have, and is currently working as intended.

aa

 

[Alcoholic Actuary]

Are these projections realistic? Don't rising wages e.g. increase UL projections? Lowering wages to improve the 75 year outlook makes no sense at all...

Well there is only around $2 trillion in the trust fund so benefits are still 97% unfunded. We can bicker all day on the assumption set and whether that's really 94% or 90%, but it's still nowhere near the funding level it needs to be to have the private sector take over.

aa

The W plan would have required $2 trillion in debt to put the privatization plan together.

And I think that would be a generous estimate. Something like funding just enough benefits to get through a 5 year transition plan or so.

aa

 

[Copernicus]

It is fiscally impossible to privatize social security / medicare. It's just something conservatives like to say to make themselves feel better.

aa

Maybe they have something like "Obamacare for Seniors" in mind? Premiums for seniors would be really high, since their chances of coming down with serious illnesses is a little higher than the general population.

Maybe. But the whole point of those programs is that the 'seniors' don't have jobs any more with which to pay premiums. Furthermore, they could easily argue that they've ALREADY paid the premiums (albeit too little).

aa

Yes, that is actually true. SS and Medicare are paid in throughout a lifetime of employment, but where did you get the idea that the amount paid was "too little"? Both programs are solvent and fully funded AFIK. There will be a shortage of funds in a few years, but that has happened in the past. Congress could easily fix the problem by making the system more efficient (e.g. letting the program negotiate drug prices) or raising the cap on annual FICA payments. Because Republicans control Congress, it has been unwilling to fix that problem.

 

[jonatha]

SS and Medicare are paid in throughout a lifetime of employment, but where did you get the idea that the amount paid was "too little"?

The amount paid was by definition too little since it went not to fund the payer's future retirement but to fund the retirement of some (possibly fractional) number of current retirees.

Although even if it had been put aside somehow to fund the payer's future retirement it would not in general have been enough to afford the payer the amount the payer likely is entitled to under current law.

 

[Alcoholic Actuary]

Maybe. But the whole point of those programs is that the 'seniors' don't have jobs any more with which to pay premiums. Furthermore, they could easily argue that they've ALREADY paid the premiums (albeit too little).

aa

Yes, that is actually true. SS and Medicare are paid in throughout a lifetime of employment, but where did you get the idea that the amount paid was "too little"? Both programs are solvent and fully funded AFIK. There will be a shortage of funds in a few years, but that has happened in the past. Congress could easily fix the problem by making the system more efficient (e.g. letting the program negotiate drug prices) or raising the cap on annual FICA payments. Because Republicans control Congress, it has been unwilling to fix that problem.

Definitely not fully funded, which is why it can't be privatized. And words like 'Solvent' take on more obscure definitions when describing a pay as you system. What the actuaries who look at SS and medicare attempt to do is ensure that there will be enough in contributions and in the trust fund to pay benefits. It isn't really solvency, but more of a measure of the balance of the plan and for how long (75 years is the long term balance).

What they've decided unanimously is that it will be out of balance before 2022 and will have used all the reserves by 2034 - at which point benefits will no longer be paid in full.

I agree with the second part of your post. There are several things congress could do to bring the program back into balance - none of which involves privatization.

aa

 

[Horatio Parker]

Which is why such forward projections are favored among the "reform" crowd. They generate panic inducing large numbers.