Sobering Medicare News

A summary of a new report from the Center for Retirement Research at Boston College:

"Medicare Costs and Retirement Security"

by Alice H. Munnell

The brief's key findings are:

Medicare spending will soar, rising from 3 percent of GDP today to 8 percent of GDP in 2040.
By 2040, retirees will face:

• a nearly 20 percent increase in income tax rates to cover the government’s Medicare contribution; and
• rising out-of-pocket costs that will eat up more than half of the average Social Security benefit.

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So, why is President Bush so worried about Title II of the Social Security Act?

Budget Status

From Congress Daily:

House and Senate Democrats are considering making the Labor-Health and Human Services [Fiscal Year 2008] Appropriations bill [which includes Social Security] the next major domestic policy fight with President Bush after the debate over children's health insurance. ...

Senate Majority Leader Harry Reid, D-Nev., plans to bring it up as early as Oct. 15, and sources said upon passage, House-Senate negotiators could quickly reconcile their differences and send the measure to the White House for Bush's expected veto.

The tactic would be similar to the current standoff over the State Children's Health Insurance Program, which Democrats perceive as a political winner despite lacking the votes to override a veto. ...

Bush says he will veto the Labor-HHS measure because it spends billions of dollars more than he wants; the House measure, at $11 billion above his request, fell several votes short of enough for a potential override.

The Senate version is roughly $9 billion above the request. ...

Leadership aides said Reid and House Speaker Nancy Pelosi, D-Calif., have discussed the option but have not made a final decision, in part because the Labor-HHS bill has to clear the Senate. That is shaping up to be at least a weeklong battle with contentious debate over stem-cell language, which Bush is likely to threaten a veto over, as well as funding priorities and earmarks.

One reason Reid has delayed the Labor-HHS measure thus far is because Republicans have threatened numerous amendments.

No Statute Of Limitations?

Shouldn't there be a limit on this sort of thing? From KETV in Omaha:

An orphan is being asked to refund money paid to him 30 years ago by the Social Security Administration.Jay Rovang, 50, is a disabled man on a fixed income. He said he got a letter from SSA, stating that it wants to collect benefits it overpaid him totaling $662. ...

A Social Security representative said the agency puts no time limit on collecting overpayments. The representative said it was only recently when Rovang started receiving disability checks that the system was triggered to collect the childhood debt.The letter to Rovang says Social Security will deduct the overpayment from his December disability check, leaving him with $421 for the entire month.

Italy Goes In Different Direction Than U.S

The Social Security Administration has issued its International Update for September with information about Social Security programs in other countries. This caught my eye:

The Italian government reached an agreement on pension reform with Italy's four largest labor unions in late July 2007. The government expects to pass legislation to raise the full retirement age to 57. If the new legislation is passed, the

full retirement age will increase from the current age 55 to age 57 over the next 4 years. The existing law requires that the retirement age increase immediately to age 60 on January 1, 2008. The government estimates that once this proposed legislation is enacted, Italians could retire with full pensions 3 or more years earlier at a cost of €10 billion (US$13.6 billion) more than under the existing law.

Controversy Over Closing Of New York Office

From the Auburn Citizen:

Plans to close the Auburn Social Security office this month again sparked opposition from one federal official Wednesday.

In a letter to the agency's commissioner, U.S. Rep. Michael Arcuri, D-Utica, argues the Social Security Administration is not using an projected $401 million increase in federal funds as anticipated. Arcuri first spoke out against the office's closure in June.

"Through my meetings with SSA staff regarding this matter, it has been made clear that additional administrative funding was a critical step to staving off closure of the Auburn office," the congressman wrote to SSA Commissioner Michael Astrue. "I find it troubling that SSA would move forward with any district office closures this year before the agency's budget for fiscal year 2008 is finalized." ...

"It seems obvious to me that two things have happened: No. 1, SSA has made no effort whatsoever to fill staffing voids in Auburn and No. 2, the decrease in visitors can be attributed to the decrease in available services and convenient office hours for the general public," Arcuri wrote, requesting another meeting with SSA officials.

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Another AARP Article Coming

I got around to listening to the American Association of Retired Persons (AARP) radio broadcast on Social Security's budget and staffing problems. It is definitely worth listening to. I learned that the AARP is planning another Social Security article to come out in its November Bulletin, this time on the disability backlogs at Social Security.

I have wondered in the past why the AARP was not doing more on the staffing shortages at Social Security. It is good to see them finally working on this. How much difference can AARP make? The AARP Bulletin is distributed to 29 million households. Everybody in Washington pays attention to AARP.

AARP Radio Show On Long Lines At Social Security Offices

The American Association of Retired Persons (AARP) ran a story in its Bulletin on staffing shortages at Social Security. This was mailed to 29 million households. This is being followed up with a 23 minute radio program to run on about 120 radio stations around the country. You can listen to the program online if you have the Real Player downloaded.