Letter to the Editor: Saving Medicare and Social Security

Accurately laying out the facts is necessary to counter a commentary regarding Social Security and Medicare in the DSN on 04/10/19 from Mr. Daniels titled, “Will Democrats push country to Socialism”? Mr. Daniels covered a hoard of subjects that would take a short story to respond too. For the sake of brevity, the focus here will be on two of his favorite Socialistic programs, Social Security and Medicare.

He asserted, “that these two programs are incredibly mismanaged or on the verge of insolvency. The 2018 annual report of Medicare’s trustees found, “that Medicare’s hospital insurance trust fund will remain solvent, that is able to pay 100 percent of the costs that Medicare provides through 2026 when incoming payroll taxes and other revenue will still be sufficient to pay 91% of hospital insurance costs.” “That will decline to 78% in 2042 and then rise gradually to 85% in 2092. Raising revenues or slowing the growth in costs or most likely both will have to be implemented to maintain full coverage.” But bankruptcy will not occur!

Social Security is financed with the payroll taxes of over 150 million workers and their employers who both pay in 6.2% in payroll taxes. In 2018, the costs began exceeding the income going into the trust fund, which required the trustees of the fund to begin tapping into the two trillion-dollar plus surplus left in the reserve fund, that in turn will be depleted by 2035. The reason for this shortfall is due to birthrates dropping from three to two children per woman. Fewer workforce people will result in less money in the trust fund in the future. The trustees have asserted that adjustments to taxes or benefits will have to be made to keep the program fully funded after 2035. If the trust fund assets are exhausted without reform, benefits are projected to be lowered 17 to 25% through 2075 with no effect on budget deficits!

To continue “fully funding” Social Security benefits for this century and beyond, Gary Cohn, former Trump top economic adviser, has recommended a sustainable reform plan. Cohn, a registered Democrat, resigned over the president’s recent tariff and tax cut polices that primarily benefited the multinational bigwig corporations and their stockholders. As you may recall, they are the infamous 1% who control most of the wealth in this country while many Americans live on paycheck to paycheck due to existent non-living wage salaries.

Many of these monolithic corporations pay little, and/or a very low percentage of taxes. Most of our economists agree that we cannot survive with present-day Capitalism if it is only benefitting the few. Isn’t this called “Crony Capitalism.? Thank goodness for the Socialist programs like Social Security and Medicare that keep our citizens surviving in this troubling scenario.

Cohn advised that we have 7 million job openings and we must continue the tradition of allowing a steady flow of immigrants into the United States to maintain economic growth. He is presently involved in a project with 200 students from 28 colleges working on solutions to sustain Social Security through 2075 and beyond. The mutual proposal is to raise the payroll taxes to 7.2 percent and raise the top payroll tax from $ 139,000 to a higher amount for the top income earners.

He also wants to change the rules of trade to adopt to a globalizing society. Cohn criticized Trump’s recommended 2020 budget that called for $26 billion in cuts to Social Security and his administrations attempts to shortcut health care protections for American’s with pre-existing conditions were termed “political suicide” in Cohn’s words.

Bill Clemens

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