|Trustees Report Shows Medical Hospital Fund Already in the Red||Trustees Report Projects Social Security Deficit in 2016||Back to the Future: Another Greenspan Commission to Fix Social Security?||House Passes '09 War Supplemental; Senate Action This Week||Finance Committee Releases Options for Financing Health Reform|
Welcome to the Concord Coalition's weekly Washington Budget Report: a nonpartisan plain English summary of key budget, appropriations, and tax developments.
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Track 1- Economic Stimulus:
Track 2 - Completion of '09 Appropriations:
Track 3 - FY 2010 Budget:
Track 4 - Stabilizing the Financial, Housing, and Auto Sectors (Ongoing)
Medicare is a national health insurance entitlement program for Americans 65 and older. The program also covers workers who have become disabled. The program has four parts:
HI Trust Fund already running a cash deficit.--The 2009 Trustees Report found that Medicare's Hospital Insurance Trust Fund already paid out more in benefits last year, than it received in cash income.
Moreover, cash deficits will continue to grow due to the rapid increase in health care costs and the retirement of the baby boom generation.
Part A Trust Fund Income in 2008*: $215 billion. Outgo during 2008: $236 billion.
SMI Trust Fund: Medicare Part B and Part D comprise the Supplementary Medical Insurance (SMI) Trust Fund. However, since general revenues are automatically pumped into this "trust fund" to cover expenditures not paid for by premiums and copayments, it is not a trust fund in any meaningful sense. This stands in contrast to the HI Trust Fund, which is financed by a dedicated revenue source (primarily payroll taxes).
*(Excluding interest from the Treasury, which is simply an intragovernmental transfer)
Last week, the Trustees of the Social Security Trust Funds (Old-Age, Survivors, and Disability) released their annual report. In a nutshell, following is the status of the trust funds, based on the Trustees' findings:
Who are the Trustees? Secretary of the Treasury Geithner; Secretary of Labor Solis; Secretary of HHS Sebelius; and Commissioner of Social Security Astrue. The two public trustee positions are vacant.
An effective Social Security "fix" is not technically complicated but is politically complicated in today's highly partisan environment. Nevertheless, the longer the President and Congress delay action, the more difficult the remedial measures will become.
Fixing the Social Security system requires a commitment by both parties to work together, as they did on the Greenspan Commission in the early 1980s and on which Senator Bob Dole (R-KS) and the late Senator Daniel Patrick Moynihan (D-NY) served.
A bipartisan Commission should examine all options with no preconditions. Some combination of the following policy options would lilkely be considered.
Social Security's looming shortfall should be addressed without further delay. The sooner adjustments are made, the more gradually they can be phased in. Moreover, it would be fiscally irresponsible allow our nation's rapidly growing public debt to be further exacerbated by ballooning Social Security deficits in the next decade.
This week the Senate will take up a $91 billion FY 2009 supplemental appropriations bill to provide additional funding for the wars in Iraq and Afghanistan and other needs. The funds are intended for military operations and other government programs during the remainder of fiscal year 2009 (which ends September 30. 2009).
The House last week passed an $85 billion version of the war supplemental (H.R. 2346) by a vote of 368-60.
As passed by the House last week, the supplemental bill would also provide funds for:
The Senate bill would provide $1.4 billion more in war funding than President Obama requested, but $5.4 billion less than the House-passed version.
Today (May 18, 2009) Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Republican Chuck Grassley (R-IA) released policy options for financing health care reform. Under rules set forth by this year's budget resolution, the costs of health care reform must be fully offset by spending cuts and/or tax increases.
The document does not endorse specific options, but seeks to define the universe of possible funding sources. Specific options described by the Finance Committee report include the following:
America's Priorities: How the U.S. Government Raises and Spends $3 Trillion Per Year, by Charles S. Konigsberg, Editor, The Concord Coalition's Washington Budget Report.