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Social Security, Medicare, and Deficits
John Goodman of Forbes starts by noting the federal debt is about $31.4 trillion. Subtracting the amount the government owes to itself (bonds held by federal agencies), the debt nets to roughly $24.5 trillion—close to the nation’s entire annual output of goods and services. But those eye-popping numbers omit another kind of debt—unfunded promises made under the entitlement programs of Social Security and Medicare. “Unfunded” is the amount by which future promises to pay benefits exceed the tax revenues that are supposed to pay for those benefits. For Social Security, for example, it is the difference between promised benefits and expected payroll taxes. Goodman calls for reforming both sooner rather than later, as waiting makes the choices more painful. Full piece here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved with no tax increases by changing cost of living adjustments, the retirement age, and delayed credits. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own research. One component is Social Security PLUS, a voluntary plan to allow all earners to have more income at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years. Read AMAC’s plan here.