The establishment press has for decades and almost without exception insisted that FDR's sacrosanct legacy of Social Security can go on and on with only minor tweaks, and that if trouble looms, it's way out there in 2040 or so when the "Trust Fund" is depleted. The problem is that during that time the federal government has raided the annual surpluses generated by "Trust Fund" which now consists almost entirely of IOUs from the rest of the government. Meanwhile, annual surpluses, where tax collections exceed benefits paid and which were well over $100 billion just a couple of years ago, have vanished, and aren't coming back to any significant degree.
Another mythology is under development: That the just-passed ObamaCare legislation has "saved" Medicare. The Social Security/Medicare Trustees report is being delayed until June 30 to incorporate the effects of the recently passed ObamaCare on the health of Medicare. It will supposedly tell us that the life of the Medicare "Trust Fund" has been magically extended by about a decade. (Raise your hand if you think the Trustees are under immense political pressure to issue a favorable verdict regardless of the facts.)
In his Tuesday coverage of a government official's leak to the Associated Press about the report's delay in advance of the official administration announcement, the AP's Martin Crutsinger spun these and other fairy tales in his stout defense for the fiscally destructive programs. But in doing so, he perhaps inadvertently revealed that Congress and the administration had no idea of the true future impact of ObamaCare.
Here are key paragraphs from Crutsinger's report (footnotes are mine, and are explained later):
AP Source: Report on Social Security delayed
The Obama administration is delaying release of the annual report on the financial health of Social Security and Medicare so that the new report can reflect the impact of the recently passed health care overhaul.
An administration official told The Associated Press that this year's trustees report will be delayed until June 30, three months later than it usually comes out.
... In January, Richard Foster, the chief actuary for Medicare, estimated that the Senate bill which passed on Christmas eve would extend the life of the Medicare hospital trust fund by 10 years. The legislation that finally passed Congress was the Senate bill but with revisions approved to win House support.
... The new health care law seeks to guarantee health insurance coverage for nearly all Americans while cracking down on insurance industry abuses. (1) It also promises to reduce federal deficits by an estimated $143 billion over a decade. (2)
... Last year's report of the trustees for Social Security and Medicare, the government's two biggest benefit programs, said that the Social Security trust fund would be depleted by 2041 and the Medicare trust fund would be depleted by 2019. (3)
The trustees warned that the financial pressures would begin much sooner when the programs begin paying out more in benefits each year than they collect in taxes. Officials with the Congressional Budget Office say that Social Security will start paying more in benefits than it collects in payroll taxes this year for the first time since the 1980s.
Supporters of the new health care overhaul believe it will have a favorable impact on both Medicare and Social Security, extending the life of both trust funds. (4)
The benefits would occur in large part through lowering health costs by expanding the pool of people buying insurance coverage. (5)
Comments:
(1) -- One of the supposed "insurance industry abuses" is denial of medical claims. The trouble is that the health care provider with the highest percentage of claims denied is .... Medicare. What reason is there to expect that ObamaCare will be any different?
(2) -- The deficit reduction claims, treated as "certified" by a compliant establishment media, assume no "doc fix." The CBO's blog post about its deficit-reduction conclusions says: "the sustainable growth rate mechanism governing Medicare’s payments to physicians has frequently been modified to avoid reductions in those payments, and legislation to do so again is currently under consideration by the Congress." Here's a plain-language numerical translation obtained from the Pacific Institute by Jeffrey H. Anderson in an Investors Business Daily op-ed piece:
Unless ObamaCare cuts doctors' pay under Medicare by 21%, and never raises it back up, it will increase deficit spending by $58 billion from 2010 to 2019 — and by over $100 billion from 2015 to 2019 alone.
(3) -- As noted, Social Security's "Trust Fund" consists almost entirely of government "bonds," i.e., IOUs from the rest of the government. The rest of the government is running annual trillion-dollar deficits on its own, and its ability to pay when those bonds are being redeemed -- something that is just beginning to occur -- is suspect.
(4) -- Supporters "believe" the reports will show favorable impacts? These people just enacted a de facto a slow-motion government takeover of one-seventh of the economy, yet they don't know, and apparently have no idea? The truth is, they don't care. As John Dingell said, it's all about how to "control the people."
Even if ObamaCare were to have a favorable impact on Medicare (doubtful, as shown in item (2)), why Social Security might be better off is a bit of a mystery. Then again, maybe the curve that is being bent downward is the decades-long increase in life expectancy. This would be accomplished by incorporating criteria for who does and doesn't deserve medical treatment developed by "Zeke the Bleak" Emanuel.
(5) -- ObamaCare will supposedly repeal the law of supply and demand. Too bad that law originates in human nature and how the world really works, and not in Congress, where the mistaken belief is apparently that increased demand reduces prices. The number of covered patients seeking care will increase by at least 10% (far more if illegal immigrants are allowed in). Even if the supply of medical providers stays the same -- a dubious proposition -- either prices will go up, or rationing will occur.
That's a lot of fantasy to put into one AP report. Expect much more in future weeks and months.
Cross-posted Saturday at BizzyBlog.com.
