WASHINGTON - Trustees for the government’s two biggest benefit programs warned Tuesday that Social Security and Medicare are facing “enormous challenges” with the threat to Medicare’s solvency far more severe.

The trustees, issuing a once-a-year analysis of the government’s two biggest benefit programs, said the resources in the Social Security trust fund will be depleted by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped out by 2019.

Both those dates were the same as in last year’s report. But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes. For Medicare, that threshhold is projected to be reached this year and for Social Security it is projected to occur in 2017.

AP

Every year they warn us about this problem and as every year before this, the legislators will put their fingers in the ears, pretend not to hear it and hope it all goes away by magic.

The Bush proposal for creating private accounts in Social Security would have solved this problem in the long run because down the road less and less people would have needed to depend on it.  There is no end in sight for this money sucking leviathan if they don’t change the program entirely.  It is practically identical to when it was first implemented in 1935.  We have a program based on the data and demographics of 70 years ago trying in to work in today’s changed America.  It cant work and it won’t.  The Democrats won’t solve this issue because it takes away leverage at election time and the Republicans won’t because they are a bunch of spineless wimps.

As for Medicare, well, there’s your universal health care for ya.  The costs keep climbing every year just like the costs do in other nations that have all health care nationalized.  No surprise.  Medicare simply has to be scaled back and that’s the bottom line.  There is no way of making this program solvent without constantly raising taxes higher and higher on working Americans.  The best way to deal with this is to start scaling back on what the program will cover for future recipients.  You can’t do it immediately because elderly people who depend on it will have no way to supplement the out of pocket adjustment they would need to make, but if people know down the road know ahead of time that the same benefit won’t be there for them at their older age they have time to prepare.

Don’t expect anything I say to actually happen, however.  I imagine the “fix” to Social Security will be to raise the cap on contributions into the system, especially if a Democrat wins the White House this year, so everyone making over $89,000 can expect a fat payroll tax increase shortly down the road.  As for Medicare, God only knows.

His broad proposal calls for a repeal to the alternative minimum tax, known as the AMT, which was passed in 1969 to prevent a small amount of high-income earners from deducting their entire tax liability.Since the AMT was never attached to inflation, its burden is expected to creep up to affect 23 million taxpayers in the middle class when it was never intended to, McCain said.

An immediate repeal, as McCain directed, would save middle class families with children that are taxed by the AMT an average of $2,700.

“I worry about obviously any reduction in revenues but to have basically two tax codes in America is not an acceptable situation,” he said.

The AMT repeal is a centerpiece for work McCain called for to simplify the tax code that’s grown bigger and more complicated with each congressional bill.

“You paid $14 billion last year to pay someone to do your taxes and you had no idea - American families had no idea whether it was valid or legitimate in anyway,” McCain said.

To direct the tax code revisions, McCain said he’d appoint a commission headed by former Federal Reserve Chairman Alan Greenspan to make recommendations for a reform for Congress to support.

“Have them report out and then Congress would vote up or down,” McCain said.

Saving Social Security and Medicare are also priorities, McCain said. Supporting personal accounts to supplement the social security crisis, McCain said he’d reach across the aisle to Democrats to make sure promised benefits are honored.

“Now are we going to fix it the way Ronald Reagan and Tip O’neil did back in 1983 or are we going to hand it off to an unluckier generation of Americans?” McCain asked.

Other incentives in the tax policy called for a permanent tax ban on the Internet and cellular phone communications while rewarding savings and investment with lower taxes on dividends and capital gains.

The Union Leader

I like this plan. Taxes on savings and investment should be kept low to continue to spur future investment and economic growth. Private accounts in Social Security are an absolute must. You can’t use a system created for 1930s America in 2007. We’re not the same country as we were then. AMT repeal is another must. It punishes people for success even more so than the general income tax structure. More tax cuts for the middle class are also needed. Ideally, while I’d love to see the income tax go the way of the dodo completely, in the very least I think it should be completely wiped away for middle class folks and below. Say, you don’t pay any tax on income until you hit like $80,000 or something, just as an example. Excellent idea to put Alan Greenspan on the panel!

Fox News did a piece on where the five first tier candidates stand in regards to Social Security:

_ Former New York Mayor Rudy Giuliani: Supports private accounts. Opposes higher taxes. Favors bipartisan commission to propose changes. “I would rule out a tax increase”

_ Former Massachusetts Gov. Mitt Romney: Supports private accounts. Opposes higher taxes. Open to a reduction in promised benefits to future retirees at higher income levels. “I’m prepared to be entirely bold, but I’m not prepared to cut benefits for low-income Americans.”

_ Sen. John McCain: Supports private accounts. Says obligations can be met without raising taxes. “As president, I’ll submit a plan to save Social Security, and I’ll ask Congress to do the same.”

_ Former Sen. Fred Thompson: Supports reduction in promised benefits to future retirees. Supports voluntary private accounts, with the government matching funds contributed by individual. Opposes raising taxes. “The status quo is not having a Social Security system as we know it.”

_ Former Arkansas Gov. Mike Huckabee: Supports private accounts. Would allow retirees who don’t need their benefits the option of a tax-free lump sum payment that goes at their death to children or grandchildren. Would allow higher benefits for seniors who delay retirement beyond 70. “The president had the right idea, but he used the wrong word.”

Republican presidential hopeful Fred Thompson proposed an income tax plan Sunday that would allow Americans to choose a simplified system with only two rates: 10 percent and 25 percent.

Thompson’s proposal, announced on “Fox News Sunday,” would allow filers to remain under the current, complex tax code or use the flat tax rates.

Asked whether the plan would cut too deeply into federal revenues, the former Tennessee senator and actor said experts “always overestimate the losses to the government” when taxes are cut.

“We’ve known for years any time we have lowered taxes and any time we’ve lowered tax rates, we’ve seen growth in the economy,” Thompson said.

Thompson added that money would be saved by his Social Security reform plan. He proposed that workers younger than 58 receive smaller monthly Social Security checks than they are now promised. Individuals could contribute 2 percent of their paycheck to a personal retirement account, an amount that would be matched by the Social Security trust fund.

The retirement plan “faces up to the fact that Social Security is going bankrupt and we’re going to have to do something about it,” he said.

Thompson proposed permanently extending tax cuts enacted in 2001 and 2003, reductions that would end after Dec. 31, 2010 unless Congress acts.

Charlotte Observer

This is a pretty good idea and I think Thompson is approaching these issues the right way. The tax cuts he proposes are enough to give another boost to our economy and help middle and lower income families, but not so outrageous that the Democrats will have to be resuscitated with a defibrillator. He also puts up a nice plan to ease into private accounts for Social Security where it might be more palpable for those who opposed the Bush plan. Something has to be done on S.S. and the Democrats and a handful of RINOs simply aren’t up to it. Maybe Thompson could reach a middle ground by introducing these proposals as president.

Former Sen. Fred Thompson promised fiscal conservatives Friday that he’d trim the cost of government by slowing the growth of Social Security benefits. Stepping squarely onto an issue long known as “the third rail of politics,” the Republican presidential candidate said, almost in passing, that changing the formula that adjusts Social Security benefits to keep pace with the cost of living would keep the program solvent over the long term.

While he wasn’t specific, numerous academic studies have concluded that the only way such a plan could work is if it slashes future Social Security benefits by one-fourth to one-half below what’s promised under current law.

“We could have the same level of Social Security benefits, for example, and adjust the cost of living increases to cover inflation,” Thompson told the Americans for Prosperity Foundation convention, and that “would solve the problem for probably 75 years.”

McClatchy

Something has to be done soon, that is certain. I don’t really know that reducing the current benefits is the right way to go, but it might be a start. Personally, I think they need to start making the case about privatizing Social Security again. It will lead to a far better return to our money and eventually do away with the current system which is a 1930s system trying to work in the 21st century. It simply can’t and it won’t. The Democrats flat out lied to the American people about what privatization would do and as usual the GOP spinelessly retreated on the issue with virtually no fighting back at all.

We always hear about the RINOs supposedly being fiscal conservatives despite their social liberalism. This is the “It’s My Party Too” crowd. I have never seen much proof of this claim, but there is plenty of refuting evidence, not to mention the recent vote in the Senate this past Thursday to stop the raid on Social Security.

Senator Jim DeMint introduced an amendment to Senate Resolution 21 that would prevent Congress from spending Social Security surpluses that they currently funnel into the general fund. Every voting Democrat minus one voted against this sensible and fiscally responsible amendment. They were joined by three RINOs, the usual suspects:

Apparently, Senators Snowe, Collins, and Smith would rather spend our future away than act fiscally prudent today.

RedState scooped this one (ok, it’s the first site I saw this on). Today Jeb Hensarling, the leader of the conservative Republican Study Committee in the House, held a conference call with several bloggers to announce a new effort by the RSC to redefine the fiscal troubles this country faces and what conservatives want to do to solve them. The American TABOR, I guess you could call it, boils down to 4 conservative beliefs:

1. Taxpayers have a right to have a federal government that does not grow beyond their ability to pay for it.
2. Taxpayers have a right to receive back each dollar that they entrust to the government for their retirement.
3. Taxpayers have a right to expect the government to balance the budget without having their taxes raised.
4. Taxpayers have a right to a simple, fair tax code that they can understand.

You can read more of the RSC’s plan in the brief pdf file here. And as RedState notes, the RSC chose to release this to bloggers first, then deal with the mainstream media second… pretty cool in my book. Some people realize who their constituents are and are actually working hard to uphold their best interests. It’s nice to be reminded of that every now and then.

I saw the headline on a Club For Growth blog post: “Coburn Puts The Senate On Notice.” I laughed (squealed?) with delight much like a youngster ripping through the packaging of a Nintendo64 on Christmas morning. I’ve been waiting to see an action from Senator Tom Coburn since the Democrats took over Congress, and he has delivered. He circulated a letter to his colleagues in the upper chamber laying out his intentions for the next two years:

1) If a bill creates or authorizes a new federal program or activity, it must not duplicate an existing program or activity without de-authorizing the existing program;

2) If a bill authorizes new spending, it must be offset by reductions in real spending elsewhere;

3) If a program or activity currently receives funding from sources other than the federal government, a bill shall not increase the federal government’s proportion of the costs of the program or activity;

4) If a bill establishes a new foundation, museum, cultural or historical site, or other entity that is not an agency or a department, federal funding should be limited to the initial start-up costs and an endowment shall provide funding thereafter.

This is not an exhaustive list as I may also object to legislation that I believe oversteps the limited role of the federal government enshrined in our Constitution by our Founders or that violates my own deepest personal convictions.

I wanted to alert you, however, to the basic fiscal measurements that I will use to evaluate legislation. My intent is not to be an obstacle, but rather to give you the courtesy of knowing how we can work together now to advance our individual and collective goals.

[Emphasis mine] The full letter can be found on Coburn’s Senate site here (pdf).

Leadership of both parties in the Senate, I hear Advil is good for headaches… I don’t think Coburn’s going to give you an easy ride.

The Senate has by a 50-49 vote allowed a provision to remain in the Immigration Bill allowing illegal aliens to claim Social Security benefits. There is no way to sugar-coat what a disaster this is for Republicans and for the country.

The Ensign Amendment would have stopped immigrants with a Social Security Number from receiving credit on taxes paid into the system while working as an illegal resident. This is just simple common sense, which is of course why it escaped the senses of those in D.C. While Social Security is already a broken system and Congress is going to be unable to meet its promise to my own generation, they now refuse to stop illegal aliens from claiming its benefits? Words don’t exist to describe the outrage you should be feeling right now.

Republicans against the amendment:

Lincoln Chafee (Remember the millions spent by Liddy Dole to get him reelected this year)
Mike DeWine (He is now trailing his Democratic challenger in Ohio and deserves to lose)
George Voinovich (RINO)
Sam Brownback (Very disappointing)
Chuch Hagel (RINO)
Richard Lugar (RINO)
Ted Stevens (I guess he thinks illegals can build his Bridge to Nowhere instead)
Arlen Specter (Snarlin’ Arlen?? Get Out)
John McCain ( Of course! I seriously don’t believe this guy is trying to run for President. This has got to be joke)

Republicans know they’re in trouble this year, but they apparently don’t know why. November will come quick guys and a lot of you had better start packing up.

A quick note to conservatives who claim that President Bush is somehow “inadequate” at selling the social security issue. Are we serious? Need I remind everyone that Bush built support for the tax cut bills, in 2001 and 2003, amid serious public opposition. Job creation and economic growth are always seen as Democratic issues, but somehow Bush was able to build enough support for this legislation. He even did it once with a Demoratic-controlled Senate! Bush is boldy trying to confront the status-quo establishment in Washington. He could easily have passed over this issue and tackled something easier and more politically pleasant. However, as he has demonstrated time and time again (especially in Iraq), President Bush is a principled leader. Quite simply, he does what he thinks is best for the American people. He must be commended for taking on what is widely-regarded as a losing issue - for taking on a problem before it fully materializes. His leadership on social security closely parallels his action in Iraq. In both cases, President Bush risked immense political opposition f or something he believed to be right. On the big issues, this President always acts on principle, and “lets the chips fall where they may.” After all of President Bush’s political successes, who would dare “misunderestimate” him in the social security debate? Let’s give Bush some more time to sell the issue. Let’s stand with him in the face of these ferocious media attacks. Okay, so he’s not as brilliant as Rep. Pat Toomey, but Bush can connect with average Americans. It does not do us any good to deride Bush’s rhetorical ability. We need to follow his lead and stop holding the President to some ideal, unattainable standard of leadership. If we stay the course today, we will surely see the benefits tomorrow.

Check out how over at AFPF (disclaimer: who I work for) they are kicking the snot out of Rock The Vote. Read Rock The Vote’s response to AFPF’s gift of I -heart- Hypocrisy t-shirts (hint: they accused a major American company of using sweatshop labor… surprise surprise).

Americans for Prosperity Foundation has launched a newsite RockTheHypocrisy.com to highlight how out of touch Rock The Vote is with America’s youth.

There will be a protest at 5:30PM, Wednesday June 8th at the National Building Museum (Corner of 4th & G St NW - Washington, DC). If you want to come you can RSVP here or find out more information here.

DISCLAIMER: I am a paid contractor for Americans for Prosperity

When I was in high school I knew a man who worked as an accountant for a company that had been shut down by the SEC because it was basically set up like a Ponzi scheme, something to do with office equipment leases sold multiple times over. All of the higher up accountants went to jail, so it was up to him and some other young guys to straighten things out. In their office, they kept a picture of Ida May Fuller, (pictured above) the biggest winner in the biggest Ponzi scheme of all time.

Too much is made of the fact that Social Security doesn’t work, or is on the road to insolvency. That’s obvious. Not enought people are talking about the fact that it’s a total fraud placed as a yoke on the American people to keep statists in office. Fuller put $24.75 into the system and collected $22,888.92. Do you think she was pulling the lever for New Deal candidates? I assume she wasn’t dumb enough not to. The Democrat Party and liberal Republicans have used tax payer money to guarantee reelection year after year, and because it is done in the name of Helping Old People, it is totally sacrosanct and unreformable.

The Left is the new reactionary movement in America. Nothing can change, no matter what disaster lies around the bend. The Democrats have offered no alternative plan, they have instead indicated every willingness to mortgage America’s future in the interest of short-term stability.

I would classify the Conservative Party of New York State as struggling: to find issues, to find a constituency, and of course struggling to differentiate themselves effectively from the state Republican machine (RINOs).

The CPNYS has focused its energy on battles that it thinks it can win, such as the smoking ban, and then failing to make any dents. Despite clearly having the best candidate in last years Senate election against Chuck Schumer (link was originally to an article by Joe Sobran, but I am nothing if not contreversy averse) there was no hope of winning.

The last point is the most troubling. The Conservative Party was founded to give New Yorkers a place to stand against the totally indistinct state Democrat and Republican parties, toadies to leviathan as they were. These days however, they have become nothing but a rubber stamp to Governor George Pataki and State Senate Maj, Leader Joe Bruno (RINO-Troy). An absolutely egregious example of this arrived with the mail today, announcing that this years annual CPNYS gala would be headlined by none other than “The Architect”, Karl Rove.

To many conservatives, Karl Rove is a hero for getting President Bush elected, and growing the majority in both houses of Congress. I choose to remember him for forcing us to live with Arlen Specter. Rove’s behavior, and Bush’s for that matter, during the PA Senate primary last year was entirely shameful and inexcusable, and will form more of their legacy for the Republican Party than they may realize. In four years, when we look back and realized that nothing has changed with the Supreme Court, that nothing has changed with Social Security, that nothing has changed period, the reason will be Arlen Specter.

And conservatives are supposed to celebrate Karl Rove because….?

(Thanks to Michelle Malkin’s ‘blog for the picture!)

Check out the Social Security Reform blog, www.SocialSecurityForAll.com

Notice: Mark Harris is the administrator of this blog through his dayjob. (With how crazy blog ethics has been getting lately I felt I should prob let everyone know.)

Yesterday, Senator Jon Corzine, who is running for Governor in New Jersey, compared Dick Cheney to Saddam Hussein

In a conference call with reporters Monday, Sen. John Corzine, D-NJ, one of the leading opponents of the president’s plan, said Cheney had “a virtual career of disdain for Social Security,” and compared his appearances to sending Saddam Hussein to campaign for democracy in Iraq.

How does such a rediculous quote get burried in the ELEVENTH paragraph! Click here for the rediculous story.

Little personal plug, I work for Americans for Prosperity and I am in charge of a special project, SocialSecurityForAll.com, check it out!

Ramesh Ponnuru on Santorums Social Security speech today:

1. The senator wants personal accounts–and he’s against any bill that doesn’t have them. “I will not vote for it, and it will not get out of the United States Senate.”

2. On the Democratic line that there’s no major problem: “Even among seniors, it’s not working.”

3. In response to a question about falling poll numbers for personal accounts, Santorum says that the president has not been making the case for them over the last two weeks–although he says that is starting to change. We knew the other side would be “armed and dangerous.”

4. He thinks the argument has to be about “retirement security,” not about the program’s “solvency” or “trust fund,” which is “green-eyeshade talk.”

5. Democrats are happy to talk about raising the payroll-tax cap because “that’s a safe field for them.” That’s all they’re talking about.

6. Santorum did not seem to find the idea of raising the payroll-tax cap and lowering the rate appealing. Since the two policies would counteract each other in terms of revenue, he didn’t see the point. [But wouldn’t the question be whether the combination won some Democratic votes?–RP]

7. Greenspan was “tremendously helpful.”

8. Santorum is “happy to campaign on this in 2006″ if it comes to that–even in the second-most senior-heavy state in the country.

I know that there has been much criticism of Santorum on this blog, but I think we need to throw in our lot behind him.

Should a conservative have voted for Casey if he ran against Specter? Of course. But with Santorum, it’s a whole ‘nother elephant. What we need is not merely pro-life votes, but pro-life leadership. We need pro-life Dems to beat other pro-choicers regardless of party. Santorum is the third most powerful Republican senator, and we need a leader to push through Bush’s judges. So few are willing to lead on the pro-life cause because the blue-blood donors are embarrassed by social conservatives.

I realize that Specter’s Chairmanship is what’s causing us the greatest trouble right now, but we can’t deep-six Santorum for what happened in the past. Let’s give him the chance to push through pro-life justices. If he fails, then we can dump him, and for all I care the rest of the Republican party.

We truly stand on the brink of history right now. Given the past Democratic Congress’s Nixon had 1 out of 4 of his supreme court appointments oppose Roe v. Wade. Reagan got 1 out of 3. Bush Sr. 1 out of 2.

This is it guys. We have to go all out. We need Dubya to go 3 for 3 against Roe v. Wade. We can quibble all we want about the minimum wage, but we need to remember what truly matters. 3,000 Americans were killed by terrorism on 9/11. Today, 3,000 Americans were killed by abortion. We have to ask ourselves who has a better ability to combat this in the next four years: Casey or Santorum?

I am somehow not surprised by this trial balloon by the President which is basically like a kick in the gut from a friend. Bush has caved to the political pressure (or is about to at any rate) and raise taxes to finance the privatization of Social Security. This is pathetic, and the more I read about this privatization idea the more of a sham it sounds like.
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Bob Novak, writing in the Sun-Times reveals some of the discussion taking place among the powers that be on SS reform and tax reform. Very interesting concepts, there is a unique opportunity here not just to enact reform, but to permanently put the Federal Government on a diet.