Did You Ever Notice the Asterisk on Your Social Security Statement?

While engaging in the mundane task of gathering financial statements for a “secure retirement” meeting with my husband’s and my adviser, this Baby Boomer stumbled upon documented proof that our nation does not have the guts to confront one of its most serious economic problems. The realization came when I pulled from my files a document statement innocently titled, “Your Social Security Statement.” At first glance, the statement did not appear menacing. I was told I could expect to receive a benefit of “about $2,136 a month” upon reaching age 70 — which certainly seems like good news. But immediately I thought of a parallel of President Obama’s infamous Obamacare promise: “If you like your Social Security, you can keep your Social Security.”  Then, as if on cue, I saw an asterisk with the following message:  The law governing benefit amounts may change because, by 2033, the payroll taxes collected will be enough to pay only about 77 percent of scheduled benefits. My full form:

I could not believe I was seeing the equivalent of what I was just thinking, but with a new twist, “If I like my Social Security, I can keep 77 percent of it.” With an asterisk, my beloved government was informing me that they will be unable to fulfill their part of a financial arrangement into which, as their statement attested, I had been making mandatory contributions starting in 1971 at age 16.   RELATED: Marco Rubio on Saving Social Security and Medicare This impending “benefit rationing,” reducing my future financial “security” by $492 a month, may, in fact, not be the worst of it. Sitting in the back of my Social Security file was an earlier statement dated March 10, 2009. Again, followed by an asterisk was a sentence that read exactly like my 2015 statement except for two major differences (emphasis added): The law governing benefit amounts may change because, by 2041, the payroll taxes collected will be enough to pay only about 78 percent of your scheduled benefits.

Clearly, in 2009, the government’s prediction — that Social Security would have to be cut to 78 percent of benefits come 2041 — was overly optimistic. Now, in 2015, they are projecting 2033, eight years earlier, with one percentage point less of my projected benefits. The projections have steadily worsened over the past few years, helped by a much weaker economy than the federal government expected. Does anyone really expect these numbers to get better? The skepticism I felt when I saw my initial monthly benefit was entirely justified. There are just too many Baby Boomers and too many financial promises with elected leaders too afraid to inflict the necessary pain of real reform. RELATED: Eight Reasons We Shouldn’t Raise the Cap on Social Security Taxes  But the pain will be much, much greater when monthly Social Security benefits are rationed. Now is the time for Baby Boomers to force their elected leaders to confront this issue and take action. The planned benefit reduction should be a major talking point for every 2016 presidential candidate, but somehow it is not. Why? Politicians fear confronting the truth, and they fear Americans can’t handle it. Meanwhile, here is the truth, as stated by the Social Security Administration in its annual Trustees Report from 2014: Social Security is not sustainable over the long term at current benefit and tax rates. In 2010, the program paid more in benefits and expenses than it collected in taxes and other noninterest income, and the 2014 Trustees Report projects this pattern to continue for the next 75 years. The old cliché “demographics is destiny” has never been more applicable. In January 2011, the first 1946-born Baby Boomers began turning age 65, at the rate of 10,000 a day. This gray-haired evolution continues for 19 straight years — until the end of 2029 — when the youngest crop of Baby Boomers, born in 1964, finally turn 65. That adds up to just over 69 million former hipsters who changed America at every stage of their lives (though, of course, some of them have died). Now, many equipped with artificial hips and knees, they’re expecting generous automated deposits from the government at the first of each month. (With many millions of them over time eventually receiving far greater amounts than what they initially contributed.)

Keep in mind that those millions of surviving Baby Boomers do not include all the immigrants, also aging, who came to America in the past decades. The official total is 74.9 million Boomers native and foreign-born. Here is more truth (and pain) from the Social Security Administration: The population of retirees is projected to double in about 50 years. People are also living longer, and the birth rate is low. Baby Boomers can expect to live longer than any previous generation, which compounds the problem, and on the other side of the equation, we have the low national birth rate. Combined, the Social Security actuaries put it this way: Trustees project that the ratio of 2.8 workers paying Social Security taxes to each person collecting benefits in 2013 will fall to 2.1 to 1 in 2032. Like it or not, the worker shortage is a key reason why our government is importing immigrants (both legal and illegal). Don’t buy it? See this 50th anniversary video commemorating President Johnson’s signing Medicare into law, produced by a group promoting immigration reform — clearly implying more immigration is what’s keeping Social Security and Medicare afloat: The Social Security trustees go on to warn that “if no changes are made to the program,” they project that “assets will be sufficient to allow for full payment of scheduled benefits through 2032” — hence the most recent warning on my Social Security statement. Don’t you just love understated government language explaining what will soon become a Baby Boomer revolt? My favorite phrase: “If no changes are made to the program.” Let’s face it. Congress is never going to make changes to the program. It won’t happen, or certainly won’t happen any time soon, because (surprise) Baby Boomers themselves are against changing the benefit formulas. RELATED: The Price of the Americans with Disabilities Act So, barring some positive developments, in 18 years — or less — Washington, D.C., will be filled with aging protesters, many using walkers, wheelchairs, or scooters. They will carry signs reading, “Give me my full benefits” and “It’s my money.” Old men wearing Vietnam veteran caps will be demanding, “100 percent and no less.” By that time, it will be too late. What comes to mind is a classic 1965 song by The Who, “My Generation.” If you are of a certain age you know the famous lyrics, “I hope I die before I get old.” Now, since the Baby Boomer generation is already redefining what it means to be “old,” it’s time to rewrite the lyrics:  “I hope I die before the government goes broke.”    As things are going right now, you won’t, but it will.

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VIDEO: Mark Levin Warns America About Obama’s Strategy To Demolish Our Children

Mark Levin’s latest book, Plunder and Deceit: Big Government’s Exploitation of Young People and The Future, hits bookshelves on August 4; and already, it is generating buzz.

Its premise is that the “ruling generation” is robbing the “rising generation’s” present and future.

Topics: The National Debt, Social Security, Medicare and Obamacare, Education, Immigration, Environment, Minimum Wage, National Security, and the Constitution.

Fellow former Reagan administration official Peter Ferrara highlights that Plunder and Deceit chronicles how today’s younger people are:

the first [generation] in modern history to have higher levels of poverty and unemployment and lower levels of wealth and personal income than their two immediate predecessor generations at the same ages. Instead of growing up and starting their own homes and families, record numbers are moving back in with mom and dad after “graduating” from college.

Watch this video where Levin reads some of his books:

“The challenge is formidable and the outcome uncertain, as is the case with most momentous causes, but there is no alternative…” write

Audit finds 22 of 23 taxpayer-backed ObamaCare co-ops lost money in 2014


Nonprofit co-ops, the health care law’s public-spirited alternative to mega-insurers, are awash in red ink and many have fallen short of sign-up goals, a government audit has found.

Under President Barack Obama’s overhaul, taxpayers provided $2.4 billion in loans to get the co-ops going, but only one out of 23 — the one in Maine — made money last year, said the report out Thursday. Another one, the Iowa/Nebraska co-op, was shut down by regulators over financial concerns.

The audit by the Health and Human Services inspector general’s office also found that 13 of the 23 lagged far behind their 2014 enrollment projections.

The probe raised concerns about whether federal loans will be repaid, and recommended closer supervision by the administration as well as clear standards for recalling loans if a co-op is no longer viable. Just last week, the Louisiana Health Cooperative announced it would cease offering coverage next year, saying it’s “not growing enough to maintain a healthy future.” About 16,000 people are covered by that co-op.

“The low enrollments and net losses might limit the ability of some co-ops to repay startup and solvency loans, and to remain viable and sustainable,” said the audit report. A copy was provided to The Associated Press.

Although the audit only goes through the end of 2014, problems apparently persisted into this year. A preliminary review of 2015 data by government officials shows that enrollments have increased, but co-ops continue to report financial losses.

Officially called Consumer Operated and Oriented Plans, nonprofit co-ops were a compromise after liberals were unable to achieve their goal of using the 2009-2010 health care debate to create a government-run insurance program competing against corporate insurers. Under the deal they struck, taxpayers would provide two types of loans: startup money and reserve funds to meet solvency standards set by state regulators.

As recently as the spring, the White House touted co-ops as an accomplishment. “In states throughout the country, co-ops have competed effectively with established issuers and attracted significant enrollment,” said a report by the president’s Domestic Policy Council on the fifth anniversary of the health law.

The IG’s audit paints a very different picture. Among its findings:

–Maine was the only co-op in the black for 2014, with $5.9 million in net income. Losses ranged from a high of $50.4 million for Kentucky’s co-op to $3.5 million for Montana’s. Most of the co-ops had previously projected losses for 2014, but the actual losses they experienced tended to be higher. Illinois had projected $28 million in income and instead came in with a loss of $17.7 million. New York, the leader in enrollment, had a $35 million loss.

–Thirteen co-ops fell far short of their enrollment projections, and nine met or exceeded them. New York enrolled 155,400 people, more than five times what it had projected. But co-ops in Arizona, Illinois and Massachusetts only hit 4 percent of their enrollment targets. There were no year-end data for the Iowa/Nebraska co-op that was shut down.

–Low enrollment and medical claims expenses that exceeded the income from premiums contributed to the losses. Nineteen co-ops had medical claims that exceeded premiums. The reasons included higher-than-expected enrollment of people with expensive health problems, lower-than-expected enrollment of younger people, and inaccurate pricing of premiums.

Separately, the AP used data from the audit to calculate per-enrollee administrative costs for the co-ops in 2014. It ranged from a high of nearly $10,900 per member in Massachusetts to $430 in Kentucky.

In a written response to the audit, Medicare chief Andy Slavitt said the administration agrees with the findings as well as the IG’s recommendations for closer oversight and clearer standards. He also offered a defense of the co-ops, saying they don’t have an easy job.

“The co-ops enter the health insurance market with a number of challenges, (from) building a provider network to pricing premiums that will sustain the business for the long term,” Slavitt said. “As with any new set of business ventures, it is expected that some co-ops will be more successful than others.”

The administration “takes its responsibility to oversee the co-op program seriously,” he said.

McConnell’s vision of ‘governing’ drags GOP astray

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The Export-Import Bank is in liquidation. A majority of Republican Senators want to keep it that way — the chairman of the Banking Committee included. Every serious and semi-serious GOP presidential candidate agrees. Senate Majority Leader Mitch McConnell, R-Ky., agrees.

So why did McConnell use a heavy parliamentary hand to give President Obama his demand — that a bill restarting the export-subsidy agency be inserted into an unrelated highway bill?

For conservative hill staffers and activists, McConnell’s actions are just one more sell-out — one more time the majority leader has stuck it to conservatives and cut a deal with the enemy. McConnell’s maneuvers triggered a fire-spitting speech last Friday from Sen. Ted Cruz, R-Texas, in which he blamed the leader for running a Senate that only listens to “the Washington cartel — the lobbyists on K Street, the big money and big corporations.”

Cruz’s speech triggered a barrage of spite towards McConnell, and revived complaints that McConnell’s main goal is to stick it to conservatives. While this demonology of McConnell satisfies and motivates the Tea Party, it misses a simpler — and thus likely better — way to understand McConnell.

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The key word, if you’re trying to understand McConnell’s conduct as majority leader is “governing.”

McConnell wants to prove that the Republican Party can govern. He believes, and wants to demonstrate, that Congressional dysfunction hasn’t been the fault of Congress as a whole, but the fault of Democrats — specifically, his predecessor as majority leader, Harry Reid, D-Nev.

Next fall, when Hillary Clinton and her proxies in the media point to government shutdowns to argue that Republicans aren’t mature enough be left in charge, McConnell wants to point to two legislative years full of accomplishments. Already, he boasts of passing a budget (something Harry Reid basically never did), an update of No Child Left Behind, Trade Promotion Authority and a permanent “doc fix.”

This week, McConnell is trying to add a long-term highway bill to that list of accomplishments. The White House, Senate Democrats, and some Boeing-state Republicans have told McConnell they’ll sink the highway bill if Ex-Im isn’t tacked on. McConnell wants a highway bill to pass more than he wants Ex-Im to stay dead, so he cleared a path for Ex-Im — even though it required Reid-like tactics of blocking other amendments.

Governing, in McConnell’s mind, also includes consensus building and fair play. So while filling the amendment tree on highways to protect Ex-Im isn’t quite fair play, the alternative would be blocking a vote on Ex-Im, although nearly two thirds of Senators want to revive the subsidy agency.

Finally, parties that can govern actually meet deadlines instead of repeatedly passing short-term patches. That’s why he prioritized a permanent doc fix, and that’s why he has been loath to pass the House’s short-term highway bill.

From a simply political perspective, there are reasons to question McConnell’s strategy. The electorate complains about dysfunctional Congress, but are they really going to reward a Congress that passes small-fry bills that most regular people will never hear about?

Then there’s the policy strategy: Can you possibly set the stage for an agenda of shrinking government by passing a bunch of bills that mostly increase government — restarting an expired subsidy agency, increasing Medicare spending and increasing federal spending and revenue through a highway bill?

Compromise is part of governing, McConnell will say when assailed by Tea Party critics, and conservatives need to be ready to give some in order to get some. But not everyone seems to be giving and getting equally in McConnell’s Senate.

Trade, Ex-Im, highway spending — these all happen to be the priorities of U.S. Chamber of Commerce and K Street lobbyists. When The Wall Street Journal ran an op-ed by two former Senate majority leaders praising McConnell for getting the Senate “functioning properly” it was noteworthy that the authors, Trent Lott and Bob Dole, are both K Street lobbyists.

One shouldn’t tag McConnell as an agent of K Street. It’s just that if a Republican sets out to be compromise-minded, to pass bills with bipartisan appeal, and to avoid ruffling feathers when possible, he’s apt to end up advancing the sort of big-business-big-government policies that corporate lobbyists want.

Cruz is right when he says Washington is a cartel enriching the insiders, but he goes overboard when he attacks McConnell’s motives as cronyist. It’s not a matter of a corrupt leader. It’s a matter of a corrupt system. K Street simply provides the path of least resistance for a leader trying to “get things done.”

And because McConnell is an old-breed Republican, he may not see the alternative that sits before him: dismantling the structure of special favors that Reid, Obama and Republicans of old have built for the insiders.

Put another way: You can build bipartisanship with Dan Coats and Mark Warner, or you can build bipartisanship with Ron Wyden and Pat Toomey. There’s bipartisan support for handouts, but there’s also bipartisan support for ending handouts.

If McConnell wants to run the Senate so as to earn the voting public’s trust, he needs to show that he doesn’t let K Street call the shots.

Step one would be standing with his party’s majority and its presidential field, and keeping the Export-Import Bank good and dead.

Social Security disability fund to run dry next year – Chicago Tribune

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By Tribune wire reports contact the reporter

The 11 million Americans who receive Social Security disability face steep benefit cuts next year, the government said Wednesday, handing lawmakers a fiscal and political crisis in the middle of a presidential campaign.

The trustees who oversee Social Security and Medicare said the disability trust fund will run out of money in late 2016. That would trigger an automatic 19 percent cut in benefits, unless Congress acts.

The average monthly benefit for disabled workers and their families is $1,017. The typical beneficiary would see a reduction of $193 a month.

“Today’s report shows that we must seek meaningful, in some instances even urgent, changes to ensure the program is on stable ground for future generations,” said Jo Ann Jenkins, chief executive officer of AARP.
In more bad news for beneficiaries, the trustees project there will be no cost-of-living increase in benefits at the end of the year. It would mark only the third year without an increase since automatic adjustments were adopted in 1975.

Separately, about 7 million Medicare beneficiaries could face a monthly premium increase of at least $54 for outpatient coverage. That works out to an increase of more than 50 percent.

The annual report card on the financial health of Social Security and Medicare shows that the federal government’s largest benefit programs are feeling the strain of aging baby boomers as they both approach milestone anniversaries.
Medicare turns 50 at the end of the month and Social Security turns 80 two weeks later. Together, the programs accounted for more than 40 percent of federal spending last year.

There was some good news in the report: The trustees said Social Security’s retirement fund has enough money to pay full benefits until 2035, a year later than they predicted last year. At that point, Social Security will collect enough in payroll taxes to pay about 75 percent of benefits.

Medicare’s giant hospital trust fund is projected to be exhausted in 2030, the same date as last year’s report. At that point, Medicare taxes would be enough to pay 86 percent of benefits.

Advocates for seniors say that gives policymakers plenty of time to address both programs without cutting benefits. But some in Congress note that the longer lawmakers wait, the harder it gets to address the shortfall without making significant changes.
There is an easy fix available for the disability program: Congress could shift tax revenue from Social Security’s much larger retirement fund, as it has done in the past.

President Barack Obama supports the move. And acting Social Security Commissioner Carolyn Colvin said shifting the tax revenue “would have no adverse effect on the solvency of the overall Social Security program.”

But Republicans say they want changes in the disability program to reduce fraud and to encourage disabled workers to re-enter the workforce.

“Washington has continually kicked the can down the road, and now, as 11 million Americans face cuts to Social Security disability benefits they rely on, it is time for Congress to take action,” said Sen. Rob Portman, R-Ohio.

In January, Sen. Rand Paul, R-Ky., suggested that a lot of slackers are on disability. Paul, who is running for president, joked that half the people getting benefits are either anxious or their back hurts.

The date that the disability fund will run dry is unchanged from last year’s report. But as the deadline gets closer, advocates say the need to act becomes more urgent.

“The president has proposed a common-sense solution to improve the solvency of this fund in the short run so that Americans who rely on it will continue to receive the benefits they need,” Treasury Secretary Jacob Lew said. “It is vital that Congress move forward to maintain the integrity of this critical program sooner rather than later.”

If the retirement and disability funds were combined, they would have enough money to pay full benefits until 2034, the trustees said.
Lew noted that the life of the Medicare trust fund has been extended by 13 years since Congress passed Obama’s health law. The fund is also benefiting from a slowdown in the rise of health care costs.

The Medicare premium increases would affect Part B, which provides coverage for outpatient services. For about 70 percent of beneficiaries, premium increases cannot exceed the dollar amount of their Social Security cost-of-living adjustment, or COLA. Because no COLA is currently expected for next year, increased costs of outpatient coverage would have to be spread among the remaining 30 percent.

That would result in an increase of about $54 in the base premium, bringing it to $159.30 a month. Those who would feel the impact include 2.8 million new beneficiaries, 1.6 million who pay the premium directly instead of having it deducted from their Social Security, and 3.1 million upper-income beneficiaries, those making at least $85,000 for an individual and $170,000 for a married couple.

The increases for upper-income beneficiaries would be higher, up to $174 for those in the highest bracket.

Health and Human Services Secretary Sylvia Burwell said no final decision has been made. She said premium increases are expected to average under 5 percent a year over the long term.

Nearly 60 million people receive Social Security benefits, including 42 million retired workers and dependents, 11 million disabled workers and 6 million survivors of deceased workers.

About 55 million retirees and disabled people get Medicare. The hospital trust fund is only part of the program. Coverage for outpatient care and prescription drugs is covered by premiums and other government spending.

Where did billions in Obamacare grants go?

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The federal government and the states have no idea what happened to billions of dollars given to create Obamacare’s exchanges, according to a federal watchdog.

The Government Accountability Office charged the Obama administration and many state-run healthcare exchanges with not adequately tracking federal funding, according to a report in the libertarian Reason magazine on Monday.

The GAO report, which is still in draft form, comes as the administration is taking heat for not properly screening fake Obamacare applications.

The watchdog’s latest finding focuses on grant funding for state-run marketplaces from September 2010 to March 2015, Reason reported.

Neither the states examined by the GAO nor the administration detailed how grant funding for information-technology projects was spent.

Also, the states and the administration didn’t track how much of $2.78 billion in Medicaid matching funds was used to fund exchange operations or development, according to Reason, which did not name the states implicated in the draft report.

The draft report appears to lay the blame on the Centers for Medicare and Medicaid Services, which manages Obamacare.

“Rather than require states to report spending on specific products, CMS required states running their own exchanges to report spending on five general categories — IT contracts, IT consultants, IT personnel, IT equipment and IT supplies,” Reason’s report said. “The vast majority of the grant money went to contracts for services like ‘systems integration, project management, and independent validation and verifications.'”

The report’s findings are the latest problem to bubble up over the management of Obamacare. Last week, the GAO found that 11 fake applications were re-enrolled in Obamacare earlier this year and continued to get subsidies. The applications were re-enrolled without new documentation.

Opponents of the healthcare law said the latest findings are indicative of rampant mismanagement with the program, while supporters countered that the GAO’s undercover investigation isn’t complete.

The management of funding for exchanges is the subject of a hearing scheduled for Friday by a subcommittee of the House Energy and Commerce Committee.

Fake applicants kept ObamaCare coverage, watchdog finds

A troubling fiscal outlook

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WHEN IS an improving fiscal situation not really an improving fiscal situation? When it’s the United States’ current one.

That’s the lesson of the White House’s annual budget update, known as the Mid-Session Review, which was published Tuesday by the Office of Management and Budget (OMB). Data in the report show the federal government is on course to record a $455 billion budget deficit this year, which is $128 billion less than the Obama administration had projected six months ago. Expressed as a percentage of gross domestic product, this is even more impressive: it amounts to six-tenths of a percent of GDP that we were planning to borrow this year, but won’t have to borrow after all. Well over half of this unexpected deficit reduction is due to above-forecast tax revenue, generated by the economy’s continued growth. Given the report’s forecasts for next year, it is likely that, as a share of the economy, the budget deficit at the end of the Obama presidency will be three-quarters smaller than it was at the beginning. Not too shabby.

Here’s the problem: This year’s progress is likely to get canceled out later on. The same White House report projects no real improvement in the long-term fiscal outlook, and indeed foresees a slight deterioration. In February, the OMB forecast that the public debt — the stock of accumulated annual deficits — would drift down from 75.3 percent of GDP this year to 73 percent by 2025. Now, however, the OMB sees public debt stuck at 74.6 percent in 2025. Though sustainable in the short run, no one can say for sure how long that level of debt will remain affordable; it is well above historical norms for the U.S. economy. It leaves the United States a narrower “fiscal space” to help cope with another recession, war or other emergency. And it represents the uncomfortably high base from which debt is expected to rise even more in the years after 2025, according to the Congressional Budget Office and other experts.

These stubbornly high levels of public debt, and the prospect of truly uncontrolled debt in the years beyond 2025, reflect the lack of fundamental reform to U.S. entitlement programs such as Medicare and Social Security. President Obama may be able to boast about lower deficits on his watch, but not his avoidance of this issue.

That much is, alas, familiar; but the White House report adds sluggish economic growth to the list of reasons for the troubling long-term picture. Specifically, the OMB now expects the U.S. economy to expand only 2 percent this year, as opposed to the 3 percent it forecast at the beginning of 2015. That lower forecast, in turn, caused forecasters to downgrade growth expectations slightly for the rest of Mr. Obama’s second term; the annual rate will probably not reach 3 percent in that time.

The candidates to succeed Mr. Obama have been touting their economic growth plans as formulas for full employment and higher wages. The latest data remind them, and us, that growth is crucial to fiscal stability, too.