I'm certainly not the first to sound off about this, but
this story really points it up:
Florida Senator Marco Rubio admits that the Republican tax cut plan to aid corporations and the wealthy will require cuts to Social Security and Medicare to pay for it.
Rubio told reporters this week that in order to address the federal deficit, which will grow by at least $1 trillion if the tax plan passes, Congress will need to cut entitlement programs such as Social Security. Advocates for the elderly and the poor have warned that entitlement programs would be on the chopping block, but this is the first time a prominent Republican has backed their claims.
OK, we knew that. Republicans have been after Social Security for eighty years, and Medicare almost since it was created. But this is what got me going:
The simple answer is Social Security and Medicare, which together comprise 38 percent of the total federal budget, second only to military spending.
“The driver of our debt is the structure of Social Security and Medicare for future beneficiaries,” said Rubio.
This is total bullshit. Social Security is not part of the federal budget, and neither is Medicare except for administrative costs for Part B.
If you do a search for "social security funding,"
this is what you get:
Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $118,500 (in 2016), while the self-employed pay 12.4 percent.
In 2015, $795 billion (85 percent) of total Old-Age and Survivors Insurance and Disability Insurance income came from payroll taxes. The remainder was provided by interest earnings ( $93 billion or 10 percent) and revenue from taxation of OASDI benefits ( $32 billion or 3 percent), and $325 million in reimbursements from the General Fund of the Treasury - most resulting from the 2012 payroll tax legislation.
The payroll tax rates are set by law, and for OASI and DI, apply to earnings up to a certain amount. This amount, called the earnings base, rises as average wages increase.
The only funds coming from the General Fund are "reimbursements" -- i.e., paybacks.
Do the same for
Medicare:
Medicare Trust Funds
Medicare is paid for through 2 trust fund accounts held by the U.S. Treasury. These funds can only be used for Medicare.
Hospital Insurance (HI) Trust Fund
How is it funded?
Payroll taxes paid by most employees, employers, and people who are self-employed
Other sources, like income taxes paid on Social Security benefits, interest earned on the trust fund investments, and Medicare Part A premiums from people who aren't eligible for premium-free Part A
What does it pay for?
Medicare Part A (Hospital Insurance) benefits, like inpatient hospital care, skilled nursing facility care, home health care, and hospice care
Medicare Program administration, like costs for paying benefits, collecting Medicare taxes, and combating fraud and abuse
Supplementary Medical Insurance (SMI) Trust Fund
How is it funded?
Funds authorized by Congress
Premiums from people enrolled in Medicare Part B (Medical Insurance) and Medicare prescription drug coverage (Part D)
Other sources, like interest earned on the trust fund investments
What does it pay for?
Part B benefits
Part D
Medicare Program administration, like costs for paying benefits and for combating fraud and abuse.
Even from these summaries, it's obvious that neither Social Security nor Medicare has a large impact on the federal deficit. For that, you need to look to the handouts and tax breaks for millionaires and corporations.
And it would seem that when you're quoting a Republican on Social Security and Medicare (which, by the way, Republicans have spent years equating with welfare, food stamps, etc., as "entitlements" -- the difference being that we pay into SS and Medicare, so you bet your sweet booty we're entitled to something back), some scepticism is in order. That's apparently too much to ask of
Newsweek, which goes on to repeat more Republican talking points:
In order to remain solvent, changes do need to be made to entitlement programs. Both Social Security and Medicare programs are on a fiscally unsustainable path — Medicare’s hospital insurance trust fund will be exhausted by 2029 and Social Security’s trust fund will be exhausted by 2034.
It starts to look less like laziness and more like complicity -- the link is to an "analysis" of the trustees' reports by the Peter G. Peterson Foundation. In case you can't quite place the name,
this might refresh your memory:
Peter G. Peterson, born June 5, 1926, is a controversial Wall Street billionaire who uses his wealth to underwrite a diversity of organizations and PR campaigns to generate public support for slashing Social Security, Medicare, and Medicaid, citing concerns over "unsustainable" federal budget deficits.
Looks like
Newsweek is getting to be as reliable a source as Fox.
There's an easy fix to the "sustainability" issue for Social Security: remove the tax cap. Currently, wages up to $118,500 are subject to FICA; take off the limit and Social Security will be rolling in money.
For Medicare, there's no cap, but the tax is only 1.45 percent each from employee and employer. A small increase -- and I mean small, like .5% -- would ease the strain.
But, back to the main thesis: if this is the kind of crap that passes for journalism in the mainstream media, we are in real trouble.
