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  • Morning Bell: The Recession Did Not Create Our Entitlement Crisis

    Reuters reports: Recession Hurts Medicare and Social Security. The New York Times blares: Recession Drains Social Security and Medicare. And CNN follows suit: Recession Hits Social Security Hard. This spin all comes out of the Social Security and Medicare Boards of Trustees annual report which is signed by Obama Treasury Secretary Tim Geithner, Obama Labor Secretary Hilda Solis, and Obama HHS Secretary Kathleen Sebelius. Their report blames the “economic recession” for growing shortfalls in both the Medicare and Social Security programs. But our entitlement crisis existed long before the current recession, and it will haunt us for decades to come unless something is done soon.

    Spending on Social Security and Medicare already totals more than $1 trillion annually and accounts for more than one-third of the federal budget. Recession or no recession, entitlement spending is on track to double by 2050 and tax rates for all Americans would have to double if the programs are not fundamentally reformed.

    The Trust Fund Fantasy: The Obama administration’s report admits that Social Security is set to start running annual cash flow deficits by 2016 but claims that “by redeeming trust fund assets” reserves won’t be exhausted until 2037. The Social Security trust fund is a complete fantasy. Since 1939, federal law has required Social Security to “invest” its extra money in Treasury bonds. In other words, the government lends the money to itself. Those funds are then mixed in with all other tax revenue and spent on programs such as education, foreign aid and defense. It’s like a family that borrows money from its retirement fund each year to pay for everyday expenses. When they finally retire, their retirement fund consists of nothing more than paper IOUs.

    Medicare Maladies Masked: Medicare’s situation is far worse. In 2008, Medicare’s Hospital Insurance Trust Fund (Medicare part A) already paid out more money than it took in. This year’s report predicts that the Medicare part A trust fund will run dry by 2017. Medicare part B (which covers physicians’ fees and outpatient care) and Medicare part D (drug benefit coverage) already both draw billions from the Treasury’s general fund every year. In 2007 Medicare parts B and D already drew $179 billion from the general fund. By 2017 that figure is expected to reach $353.3 billion. The trustee report doesn’t even see this as a problem. About parts B and D they write: “both [are] projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet next year’s expected costs.”

    There are good ideas on Capitol Hill about how to fundamentally reform our entitlement system. If the Obama administration is serious about deficit reduction, they should listen.

    Quick Hits:

    • “We have not been perfect ourselves,” said Obama administration Ambassador to the U.N. Susan Rice after the United States joined Cuba, China, Saudi Arabia, Russia and Cameroon, on the U.N. Human Rights Council yesterday.
    • Sen. John Barrasso (R-WY) confronted EPA administrator Lisa Jackson with an Office of Management and Budget memo warning that an EPA carbon endangerment finding would “have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities.”
    • The Obama administration signaled yesterday that it may be rethinking its promise to release several dozen photos depicting abuse or alleged abuse of detainees held in U.S. custody abroad.
    • One out of every four ballots requested by military personnel may have gone uncounted in 2008, according to findings being released at a Senate hearing Wednesday.
    • Get the facts on federal tax and spending with Heritage’s 2009 Federal Revenue and Spending Book of Charts released yesterday. A picture is definitely worth a thousand tax increases.
    Posted in Ongoing Priorities [slideshow_deploy]

    31 Responses to Morning Bell: The Recession Did Not Create Our Entitlement Crisis

    1. Brad Raffensperger, says:

      Why do we call these entitlements? As an American the only thing I am entitled to is spelled out in the Constitution. Aren't they simply life, liberty and the pursuit of happiness? I would be quite happy to make an exchange with the government. You keep my future social security checks. Let me keep the 15.3% you take out of my employer and me each week. Let me invest that in my own retirement and long term health care plan. And if things don't work out and I end up destitute I will call my kids for a handout or like an Eskimo I will look for the closest ice flow and be cast adrift.

      By the way the financial gurus say that a person needs to save 15% of their salary each year they work in order to retire at 80% of their final salary. No wonder Americans can't put anything away, we are sending our 15.3% off to Washington each year and the government plan is never going to pay 80% of our ending salary, maybe 20% if we are lucky.

      I think We the People are actually pretty darn smart folks. Let us keep our money and we will invest wisely for our retirement. It is time for a change.

    2. Wilma McQueen, Leela says:

      The information in today's Morning Bell is of special interest to senior citizens. I would like to see it available to download or print in a format (perhaps a tri-fold or bookmark) to use as a hand-out at our booth in our county Senior Expo (Older American Expo)in Leelanau, MI at which we distributed about 175 "Voter Information" packets from various conservative groups regarding issues of interest to voters.

      Thank you for your consideration, Wilma McQueen

    3. Jake LHC says:

      obama-ACORN killed the housing industry, obama-schummmmmmmer killed the banking industry, obama-UNIONS and thugs killed the auto industry. obama and the democrats haved killed over 2,000,000 million jobs. jobs pay FICA taxes and no jobs no FICA taxes coming in obama. DUH DUH.

      obama-reid and peloski and th democrats want to spend money that don't exist but they want to teach the prostitutes of China how to handle their drinks.

      We will throw out obamas thugs in 2010 and the head thug out in 2012 if he hasn't been impeached.

    4. Ozzy6900, CT says:

      I agree with Mr. Raffensperger in that our REAL entitlements are spelled out in Our Constitution. Everything else is a "perk". It is not the Government's responsibility to take care of us, although most people think that it is.

    5. E.P.WOOLLEY,CLEBURNE says:

      Well said Brad.I wasn't aware that so many americans have read and understood Marx.Apparently they believe it,otherwise the democratic party would be the minority party and Obama would still be in Indonesia.My father would turn over in his grave if he knew how the socialist have taken over the democratic party.

    6. Max C. Bible - Conif says:

      I am 68 years old and I work full time for a major hospital corporation here in Colorado.

      The county that I live in allows seniors over the age of 65 and who have been in their homes 10+ years approximately a 50% reduction in their property taxes. Our Democrat, Governor Bill Ritter is now reviewing a bill that it is anticipated that he will sign that will eliminate that provision for at least the next three years. For me, that is going to mean an increase in my house payment of approximately $100.00 per month.

      Coupled with this, our socialist bound federal legislature is on the "fast track" to pass a "greenhouse gas cap and trade" legislation. Estimates indicate that this would cost the average household about $2100.00 annually ($175.00/month)

      If we had impending socialized medicine, (I haven't seen any cost per individual) but if we look at Canada's cost, I have seen some statistics that show their tax rate at 50-60%.

      Talk is also going on in Washington to eliminate the interest and tax deduction on homes.

      Perhaps with this administration, we should just give our homes to the governmnet as well as endorsing our paychecks over to them because this is where we are headed if the air brakes are not applied NOW to the liberal spending which is taking place.

      What's next….repeal of the First, Second and Twenty Second Amendments? America better wake up and smell the coffee.

      Max Bible – Conifer, Colorado

    7. Joseph, FL says:

      The intent of the framers was for the federal government to “promote the general Welfare” not provide it. Anyone entitled to a pension should have an option out of Social Security if they have the means not to burden society. Less people relying on government programs will provide more money in the free market economy.

      We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, PROVIDE for the common defence, PROMOTE the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

      http://www.archives.gov/exhibits/charters/

    8. Jeff, Florida says:

      The reported shortage of money for the so called entitlements is BO's plan to set up in the minds of everyone, that the money is running out sooner, so he can add the illegal aliens into the entitlement plans. By adding all of the illegals to free money, that we will have to pay for, he is adding Dem voters for the future.

    9. Ben C, Ann Arbor, MI says:

      It amazes me how quickly Congress forgets "W's" effort for Social Security reform. He spelled all of this out years ago and was shot down by Congress. So NOW it is a problem because of the economy which we all know is "W's" fault. Right. I get so tired of the BS Barry spins on everything. At some point the top 50% of the income tax payers (thank you Heritage for the graphs – very cool)will band together and through the buffons out of Congress. They all lie through their teeth – or have major brain cramps such as Pelosi and the waterboarding issue. Fortuntely out digital world captures what is said and stored for future reference. The next election is going to be very entertaining to see the bums squirm when their memory lapses are well documneted. Another is Barney Franks and Fannie Mae – and on and on and on.

    10. tom coal valley says:

      I believe the oboma administration would't knoww the truth if they stepped over it. the social security fund has been raided by politicians for several decades and has created this mess. Iam 58 years old and probably will have to work the rest of my life to be able to cover my retirement they stole in the name of borrowing. The liberals are creating one disaster after another until everyone feels only the government can save us. Thats b.s they can't even run this country properly. It is totally a power grab and we need to vote these idiots out of office in 2010.

    11. Phil Davis, Florida says:

      Social Security funds, as it turned out, are mostly another example of a government slush fund. At this point in my life I would just rather have the money I put in given back to me. Of course, my money is already gone so whats the point wishing over a dry hole!

    12. Dennis A. Social Cir says:

      The social security fund would be sound if congress stoped taking our money out to pay needless plans, just like insuring that the illegals have their needs met. My social security is mine, I worked for it and the liberals are determined to give it away to everyone that has never put anything into the fund. It is time that those that are riding on the back of the tax payer get out and make their on way. We need to take back this country and the ideals that it was built on, insted people are willing to let the dems and the liberals, the socialist, and the marxist take all from us. IT HAS TO STOP.We have the chance to stop this crap in 2010, I just hope people will get out and vote, and then vote to put an end to this junk.

      I thought that jimmy carter left office in the 70's, but it seems like he has left a pile of crap to take his place, only this pile is worse than he was.

    13. NYstatehome says:

      I think everyone or groups think they are special and clearly want those changes added to the Constitution. How far are we willing to go to make continual changes to accommodate every person who is an American citizen?

      Our government has been stealing the funds that have gone into Social Security and Disability funds for decades. And just like the housing mess started by Freddie Mac and Fannie Mae and the laws that the Democrats created that forced banks and lending institutions to give loans to those that never had the capital in the first place to purchase the home and encouraged those who had the capital to buy a house larger then was needed. Their belief being don't worry about it we'll cross that bridge down the line.

      Now, all the baby boomers are coming to an age where they may want to retire and the funds that they placed into the hands of Congress and the funds that they contributed towards their retirement and they expected and counted on has been squandered and misspent by the idiots in Congress. The scarier thing is that don’t think they’ve done anything wrong.

      As for this statement… One out of every four ballots requested by military personnel may have gone uncounted in 2008, according to findings being released at a Senate hearing Wednesday.

      Is anyone surprised? I always thought they were being held and received too late to be counted. I think they sometimes should be the only ones that should count, these are the people who protect and defend our Country. The democrats never want them counted and I read online that if Al Franken wins he’ll be helping Reid with authorizing legislation that will ban the military vote. If the Homeland Security witch was calling them combatants prior to those statements they may actually come true if this craps is passed by this 111th Congress.

    14. Eugene Hoffman, Hous says:

      The education, health care, collge tuition's, social security benefits, and hospitalization payed out for peoples that are not Citizens of the United States is staggering; it is bankrupting California and will eventually hit New Mexico, Arizona, and Texas. These funds come from the taxpayer via the beltway monarchy; it must stop. This is where are "Lock Box" is being robbed. People are also living longer and the program is not being funded fully. The tax and the Employer match should go all the way up the salary level: this, and the cutting off of funds to lawbreaking illegals would begin to shore up the deficit. As usual the only wronged party will be the individual citizen that does the next right thing.

    15. Spiritof76, New Hamp says:

      Social Security is a giant Ponzi scheme. Bernie Madoff is going to jail for running the same thing at a smaller scale but that is illegal.

      We have to start criminal proceedings against all the Congressional members that opposed George Bush's effort to reform it. In addition, we must start criminal proceedings against Barney Frank, Chris Dodd, Freddie Mac, Fannie Mae and host of others that encouraged and supported through legislation fraudulent schemes that generated the subprime bubble.

      Until then, we and our children and grandchildren are going to pay.

    16. Pamela Colorado says:

      we're shocked about votes NOT being counted from our military—-NOT These people( politicians) are anything but FOR THIS COUNTRY AND THE PEOPLE OF THIS COUNTRY. They are for THEMSELVES and THEIR POCKET BOOKS and to heck with the people of this country. They make pomises and don't care who gets hurt as long they look good by paying people back– buying votes– for them and hauling people over the lines to get dem's voted in power. They are about CONTROL—that's all. NOT ABOUT THE PEOPLE—– FOR THE PEOPLE

    17. David Sayers, NC says:

      The Kommies aren't coming, they are already here.

      Apathy will get you every time.

    18. Rhonda, Texas says:

      The L.A. Times seems to be the only one to understand or write about the real reason our Healthcare system Medicare or otherwise is in serious trouble, ILLEGAL ALIENS!!!!! Our President and not one elected person in congress will do anything about it because they want the votes from the mexicans.That is not so hard to understand they are breaking the back of our country.

    19. Ken Coffman Zellwood says:

      What the H_ll doesn't the goverment understand. You dumb people have borrowed from Social Security for so long you don't remember that you have to pay it back. So now is the time; Democrats started the fund and they were the first to steal from it. Oh the Repubilicans have done it also. So now get off your butts and start paying it back, oh you say you can't. Well it looks like you should bail out Social Secutity like you did for the banks and auto industry. I have the perfect solution take the pay raises that you gave to yourselves recently and also reduce you pay along with the perks that you think you should be receiving and start living like the middle class for awhile. This way you can learn how to live on less and re-budget Social Security like you should have been doing for the last 60 years. PAY THE FUND AND US BACK! THE TIME HAS COME TO GET OF YOUR BUTTS AND DO SOMETHING ABOUT REDUCing YOUR SPENDING ON PORK UNTIL IT IS PAID BACK. "PRINT THIS IN YOUR HAND PICKED NEW YORK TIMES"

      As a retired Air Force Veteran and on Social Security at the ripe old age of 72 and I'm a youngster at Social Security. TIMES UP NOW PAY UP!!!!!!!!!!!!!!

    20. fc, nc says:

      can the federal government, as it is now, ever have enough money? of course not! their ability to give it away will always out pace an economys ability to generate more. it will always be too easy for a politician to spend the tax payers money. would you or i ever consider writting a check to pay for the training of chinese prostitutes to drink sensible? of course not. yet politicians think nothing of it. they can not say no. they're like a kid spending their parents money. the only hope is a law mandating a balanced budget. but wait, don't we already have that law? maybe there is not hope. we must pray.

    21. Jim@Redding,CA says:

      The REAL DRAIN on Social Security is the

      HANDOUT given to so-called "disabled"

      people (alcoholics, all drug addicts, and

      others – like illegal aliens) who collect

      SSDI far in excess of the normal SS bene-

      fits received by actual retirees like my-

      self. "Far in excess" means more than 3

      times the amount I get after actually working for a living. It never ceases to

      amaze me that most prople don't even know

      about this rip-off to our retirement sys-

      tem that has been going on for decades.

      THIS IS THE REAL REASON THAT SOCIAL

      SECURITY IS GOING BROKE!!!

    22. Pingback: » Financial News Update - 05/13/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

    23. Andrew Schlessinger, says:

      The real problem with the welfare system is not that it attempts to help those who can't help themselves, rather it makes the government the first stop instead of personal and extended family responsibility.

      First, with regards to Medicare and Medicaid, the person is responsible for their own health and well being.

      Second, (Medicare/Medicaid)the extended family is the safety net for the individual/family. First parents and siblings, then cousins, uncles and aunts; this is a collaborative effort. between them all much more can be accomplished than what currently is.

      Third, with regards to Social Security, Mr. Raffensperger is correct. We should phase out Social Security entitlements, say for everyone under 45. Instead, people and their families are responsible for their own retirement. The Return on Investment is many times greater for private investments than for the government.

      Finally, only after everyone in the family has exhausted those resources should the government look to step in. If the government can confirm that all familial resources have been exhausted, to include selling of assets, having family members move in, getting second jobs, etc., then and only then should the government look to take resources from strangers to help the individual.

      Some may see this as cold-hearted. But this policy is actually a very concerned, loving, and logical approach to the problems we face with regards to welfare. It promotes self-sufficiency, reduces the government footprint (especially the budget) and fosters the American can-do attitude.

    24. Mike Sheahen, Hickor says:

      Ok, evidently from the article above it may help to point out the fact that the Left never has, doesn't now, and never will "listen" to the facts, certainly not without attacking and labeling anybody and everybody who speaks them as “Right-wing extremists” and “enemies of the state”, etc, or do anything else which is contrary to their Leftist Marxist Communist/Socialist government elitist and statist power and money-grabbing agenda.

      Of course that's because there's too much enmity, envy, "class warfare" instigating, government dependence instilling and government dependants creating demagoguing and pandering for the Left to do to get and keep themselves in votes and ever more power and money at the expense of the people, instead of actually listening, much less accepting and acting according to, any facts which would derail their vote-buying Leftist government elitist and statist power and money-grabbing gravy train and agenda.

      To put it another way, despite how government elitists and statists may so arrogantly deny this, it really is as simple as 2 – 2 = 0, not 4, as in: Government elitists and statists, including Leftists, getting to subtract (-) away from us our freedoms and control of our resources and security, always has, always does, and always will equal (=) zero (0), as in the people end-up being and holding the losing number!

      Or, as Thomas Jefferson put it, "As government grows, liberty decreases", and, as even Alexis de Tocqueville put it, "The American Republic will fall when the politicians learn they can bribe the people with their own money".

      So also the choice we, the people, face is simple (notice I didn't say "always easy"): Either we stand and fight to defeat the government elitists and statists in order to save what remains of our freedoms, resources, and security, in our (U.S.) America which is the last best hope of mankind, or else, as history repeatedly shows and proves, we certainly shall end-up proving again that "as government grows, liberty decreases", and how "The American Republic will fall when the politicians learn they can bribe the people with their own money".

    25. Vicki, Oregon says:

      Removing the cap on income taxed for Social Security will assure it's solvency. If Warren Buffet can get full SS benefits, he can pay taxes on ALL of his income, not just the first $160,500! That goes for all the other fat cats out there too.

    26. Scott Haltom Houston says:

      Everyone tells us to wake up to what is going on. Well, most of us are awake. Our representatives don't seem to do a lot. What are we supposed to do. I e-mail my reps all the time but, all I get are "canned" replys. Rush, Sean and Michael have it right but, no one has a suggestion as to what to do. What about some organization? What about something proactive? Some states are challenging in court. What about class action suits? Lets do something. I am willing to throw my member on the table. I will try and organize locally. For God's sake lets do something. I welcome suggestions.

    27. Barb -mn says:

      I agree with Brad Raffensperger, no entitlements to any citizen but what's in the constitution. It is time to reform government at all levels, to their rightful place.

    28. Mike Sheahen, Hickor says:

      Since the responses of others have appeared but mine has vanished, I will give my response again.

      Ok, from the article above, evidently it may help to point out the fact that the Left never has, doesn't now, and never will "listen" to the facts, certainly not without attacking and labeling anybody and everybody who speaks them as “Right-wing extremists” and “enemies of the state”, etc, or do anything else which is contrary to their Leftist Marxist Communist/Socialist government elitist and statist power and money-grabbing agenda.

      Of course that's because there's too much “stinkin’ thinkin’” and “class warfare” demagoguing and pandering for the Left to do to get and keep themselves in votes and ever more power and money at the expense of the people, instead of actually listening, much less accepting and acting according to, any facts which would derail their vote-buying Leftist government elitist and statist power and money-grabbing gravy train and agenda.

      To put it another way, no matter how government elitists and statists may deny this this, it really is as simple as 2 – 2 = 0, not 4, as in: Government elitists and statists, including Leftists, getting to subtract (-) away from us our freedoms and control of our resources and security, always has, always does, and always will equal (=) zero (0), as in the people end-up being and holding the losing number!

      Or, as Thomas Jefferson put it, "As government grows, liberty decreases", and, as even Alexis de Tocqueville put it, "The American Republic will fall when the politicians learn they can bribe the people with their own money".

      So also the choice we, the people, face is simple (notice I didn't say "always easy"): Either we stand and fight to defeat the government elitists and statists in order to save what remains of our freedoms, resources, and security, in our (U.S.) America which is the last best hope of mankind, or else, as history repeatedly shows and proves, we certainly shall end-up proving again that "as government grows, liberty decreases", and how "The American Republic will fall when the politicians learn they can bribe the people with their own money".

    29. Brother Dave says:

      Has anyone talked about applying the new govt. stakes in Fannie and Freddie to establish real vs. fake funding of Social Security? A case may be made to link home financing needs of younger Americans with the retirement needs of older Americans. A 30-year mortgages seems a good fit.

      Let private firms originate and underwrite the loans, while Soc. Sec. owns them. It would at least be a start to fund this entitlement with real money vs. bogus govt. IOUs. Of course, all funds would have to be safely and permanently walled off from Congress.

      I thought I even heard Larry Summers mention it (once) a number of months ago but now that he is on the reservation, not surprising that was the end of it.

    30. Brother Dave Annapo says:

      To Moderator: Forgot to add my location. It is Annapolis, MD. Thank you.

    31. Mary GS, Atlanta GA says:

      Enough of this insanity. This administration is DESTROYING our nation with its economic policies. Prior to the democrats taking Congress in '06 our economic indicators (GDP, employment and interest rates) were all healthy. Dems took billions of dollars out of the economy starting with the AMT. We have been in a downturn since. Is anyone investigationg the run on banks on 9/17/08? The United States is being systematically attacked by the left. Our representatives need to gather together and speak out against what is happening to our Nation. Count the military votes, investigate Congressional members Barney Frank, Chris Dodd; Fannie Mae & Freddie Mac… The Republican constituents demand accountability. This administration is exploiting the powers granted in the Constitution of the United States (there is no power given the President regarding private business????). ENOUGH! This administration must be held accountable. Their policies are ruining our Nation.

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