tv Washington Journal Charles Blahous Robert Reischauer CSPAN June 7, 2018 9:13pm-10:12pm EDT
>> talk this morning about the future of social security and medicare trust funds. were joined by robert of the urban institute and the market is center. having this discussion after the publication of the in all trustees report and it offered some warnings about the long-term health of those trust funds. who are these people who publish this report? >> right now, the trustees are only four people. the secretary of the treasury, of hhs, secretary of labor and the acting commissioner. by law there should be six. one from each party serving as public trustees. their job is to report annually on the status. >> you both previously served as public trustees.
what is the role of that person? >> the trustee positions were added as part of the amendments. there added to substantiate public confidence in the objectivity and accuracy and high-quality of the trustees projection. apart from the public trustees, all the people working as trustees are part of the current administration. to make sure there is independent bipartisan oversight those positions were establish established. >> why hasn't there been anything since then? >> they've had a difficult time filling the appointments. public trustees are far down in the priority list. compared to deputy assistant secretary's and the other positions that have to be
filled. i'm hopeful this vacancies situation will end soon. >> with those vacancies, you have worked to the bipartisan policy center to go through the reports. talk about your findings in comparison to what this week's report found. >> we made independent estimates of appropriate numbers. rather than look probably at cross on the results been seen for myself we are fairly pleased that the traditions the trustees have over several decades have persisted. in other words, the trustees have made reasonable assumptions and used methodologies to put
together reports. they provide an objective outlook on social security. >> the top numbers from the shoes trustees report, they say could be depleted by 2026, social security depleted by 2034. let's start with the term depleted and defined not. >> that is the point at which the trust fund is entirely devoid of reserve. both social security and medicare maintained contingency reserves. they hold them in their trust funds. to the extent spend insurers exceed tax revenues, they have those reserves to draw upon. once there depleted, then the amount of benefits you can pay insurance payments you can make
is limited. in the current situation, those payroll tax collections will be below what's needed. unless there are reforms to extend the solvency of the trust fund, beneficiaries are at risk. >> what reforms are you proposing that are instituted in both of these programs? >> we tried to be very open about it and focus on analyzing the fiscal problem. by but i both served on the bipartisan commission that made recommendations for sustaining the solvency of social security. it was roughly split with the bipartisan commission with measures on the bipartisan shot, but we try to keep those views out of the analysis.
were trying to make sure lawmakers, the public and press her hearing alarm bells that action needs to be taken where these programs are in trouble. >> do you think this administration is taking seriously those warning bells? >> i'm not sure they've heard at all. we have the political system that delays painful decisions as long as it can. when somebody says a crisis is going to occur in 2026 or 2034, the elected officials say that's [inaudible] my watch right now. i'll deal with the crisis of the day. it's a difficult set of issues. we need to tighten our belts.
we'll have to do commendation as tax increases slowing down spending growth if the programs are going to continue. on their programs for huge numbers of elderly and disabled people. >> will spend the rest of the hour talking about those potential options in the future of social security and medicare. we want to hear from you. special line for you to call him. and our guests of the urban institute, charles is with the bipartisan policy center. arnold is up first in florida. go ahead.
>> caller: i have a question, for several years now the democratic party has made -- they have tried to get congress to approve taken the cap off of social security paying. there's people in this country that make way more than $120,000. it is common sense. i'm from a small town in north carolina where they had a lawyer named sam ervin. he was a backwoods country lawyer. the man had common sense. common sense seems to be gone. we send our jobs overseas, which actually takes our tax base away. the jobs out there now our service industry jobs.
i drove a tractor trailer for 35 years. if you don't have the plants to produce goods, that service industry job, when i was driving a truck the loads were not there to pick up. i didn't have the money to go out to eat at the restaurants or to spend back into the economy. >> thank you. >> it's nice to hear someone talk about answers than denying the problem. i complement the caller for proposing a solution. that's not always the case. too often you hear people denying this problem. the excessive public focus on the insolvency date was very much misplaced. the problem doesn't just begin
when the trust runs out. as far too large to solve in any practical way. the message we tried to carry forward is that already the shortfalls in these programs that continued make it almost impossible to do so. there is a further warning that went out that showed both of those programs trust runs are beginning their depletion time this year. that's a stunning development. it was not supposed to happen until the early 2020s. this is a much more immediate problem. back to the suggestion, to the extent there is going to be a bipartisan discussion which we hope there will be an people come to the table on the revenue and expenditure side, is likely an increase on the cap of wages
will be a part of that discussion. the effects of that are concentrated on higher income people. that was the case when we serve. but here's a caution, it doesn't accomplish that much in terms of the overall solvency of the program. benefits are linked to contributions. people on the high income and have a low return. so you would somewhat improve but absent other changes you'll still have the vast majority of this. >> so you have the medicare, the social security trust fund by 2034, you are just talking about the difference from laster's report, how did the insolvency date change from last year.
>> they didn't change at all, which is a good bad news. if it didn't deteriorate we should be pleased about it. with respect to medicare it move forward. he was 2029 the master's report was 2026. when i think about that given the slow pace that the legislation gets done, that's a moral. >> what was the cause of that. >> interestingly enough, it was largely because of the base of which the projections were being made this year it was lower than what was anticipated. last year, the trustees thought
that they would have more wages and more tax payments into the system then turned out to be the case. they had to lower down the base to which the projections were made. in a way, it wasn't that they looked out things were markedly worse going forward as a point to where they started the war. >> to think the numbers would be different if they were public trustees of all? >> that's hard to say. my initial reading the various assumptions, mortality, immigration, fertility, is that the trustees did a very good job of making some small changes here and there, but not making medical changes. >> back to your calls. lines for social security and
medicare recipients. for those who receive both social security and medicare. >> i just wanted to comment, not only the situation with medicare and social security, but the general economic outlook does not bode well for the economy. the savings rate among individuals who are found, the debt load that people are carrying is a, and wage increases are not consistently improving. all of that along with social
security and medicare, and all boats for not too good economic outlook. was just wondering if they could comment on the. >> i agree with the colors concern. we have a difficult situation were facing with two very large programs and substantial changes will have to be made. at this point there's no way to avoid there be an adverse effects on people who participate in the programs and certainly with respect to the overall budget of the federal government. in a better policy world, we would have gotten the rest of our fiscal house in order so we'd be in a better position. but we actually have the economy performing relatively well. markets have done relatively well, labor markets are doing
well, it ought to be a moment for fiscal consolidation and improving the long-term outlook. not really a moment to be floating a large amount of federal debt and undermining our ability to deal with these problems. i share the colors concern. i think were not in as good of a fist trend fiscal position. >> you look at the future of social security and medicare, a new york times story said the administration's economic tax cuts will generate the long-term growth needed to secure these programs, do you agree? >> no. i'm under the consensus of my profession and saying that the boost that we were going to get is relatively short-term, that is because in large measure we are accumulating debt at a high
rate. that debt will raise interest rates and depress economic growth. unlikely the administration's hopes with respect to the tax cut into regulation will have the dynamic affect they would like to see. if, social security and would be markedly improved i think very few people want to make that bet. . . problems to roll the dice on. point 5 million people receive retirement or disability benefits through social security. 58.4 million receive medicare. aboutrograms account for 40% of all federal spending. we are talking about the future of those programs this morning
for our last 40 minutes this morning on the washington journal. you can join in. those who receive social security and medicare benefits, (202) 748-8000. .ll others, (202) 748-8001 oscar is on the line for all others. caller: good morning. i just wanted to ask a question about the limit. i know the trust funds depletion is an issue. but there is a maximum benefit right nowent of $2687 for a full retirement age person. given that there are 140 million people living under poverty i don't think 140 million people that retire today will be isre 140 billion people living n poverty i don't think they will be receiving $2,600 so i
question how can it be that we can't raise the tax limit to raise it from 27,000 up to 130 probably to make over $300,000 that will help us to make this salted and connects. the 61 million or 68 million will be over 100 million people receiving social security. let's elaborate on what happens if we raise the portion of
monies that are subject to the fact is it would solv was sold f the problem if we didn't change that benefits thoseec people receive and the whole basis of the system is you get a return that is much lower then the low income contributors. let's keep this situation and allow these people that are going to pay more, the hedge fund left their g benefits rise, thenbe it's about 36% of the tol
problem. so, no matter what we do we still have a big chunk to deal with. >> host: where did you think the sweet spot is? >> guest: what ever you can agree between the republicans and democrats. racing at three, four, $5,000 a year over a longer period of time. >> host: are there any members on both sides coming together looking for that right now? are there any proposals as >> guest: there are a number of proposals that have come out of the last few years. as you might imagine, people tend to put out the vote reflecting their own negotiating starting point with the benefits on the other sides of the individual proposal tends to
reflect the position of the party but ultimately we will have to meet somewhere in the middle.in >> host: salem oregon from those go ahead. >> caller: i am a retired [inaudible] off the subject for having three companies don't we stop spending billions of dollars to other countries and spend it on america? that's all i have to say, gentlemen. good day. >> guest: we have allies around the world and a big chunk
ability. >> host: about a half-hour left in the discussion today. waiting in alabama on the line for those that receive social security and benefits. go ahead. >> caller:. the second comment i would like to make it each time i go into an office, there's about a waiting room of 100 people and out of the 100 people it looks l like about ten or 12 are retirement age. how has the disabilitybi portion of social security grown as opposed to the retirement debate? >> guest: many people don't realize it's not just a retirement program but it's also a program that pays benefits to surviving widows and dependent children and disability benefits. the disability insurance trust
fund was facing much more imminent depletion and entrance trust fund but that is no longer the case. when you look at the financial pressures in the size of the shortfalls they are much larger on the retirement side in absolute and relative terms. there was a very substantial burst in the disability applications and awards during the recession that's pretty typical whenever the labor market goes south disability applications increase and awards increase. they dropped him off the last few years as the labor market has recovered and one of the reasons the bad news about the payroll taxes has been offset by some improvements in the projections going forward is that it reflects the lower rates of approval in the last couple of years relative to what was happening before.
>> host: >> caller: thank you for taking my call and to both of you for being here discussing thismy topic. i want to know why it is that you never see white collar crime for medicare fraud. that's the amount of people involved and number two, why is it that $21 trillion has gone missing from two departments and this is a fact from the army, the dod and hud. why is nobody addressing this issue? if we havee the 21 trillion that was stolen, w we wouldn't be in this mess that is the issue is it not? >> it couldn't be $22 trillionn or billion in the dod that has
gone missing. i haven't seen the figure anywhere but i'm not knowledgeable on those things.dg with respect to medicareso frau, i would point out the justice department offering medicare services has improved greatly after going after medicare and medicaid fraud and there've been quite substantial recoveries. these programs are big and complicated and wee try to not encumber them so the doctor sends in a bill and payment is made almost automatically
through the computer it's only later that they go back and check these things. so there is an advantage to the way that we administer these programs which allows for some fraud, but the government is doing an okay job. >> host: staying on medicare for a second, what did the affordable care act have on theseti trustee corrections on e depletion date and has it changed at all from the effort to roll back parts? >> guest: certainly yes there was the independent commission. it served as a safety valve that was never appointed but if medicare spending went up to an
excessive rate, the commission was charged with coming up with ideas that would automatically be put into action if congress allowed that to do moderate the growth and that commission was abolished the efforts of the administration and those in congress among other. there also was a new tax bill is goinwas going to be imposed on e subsidized employer plans and bent tax was supposed to go into effect the next couple of years but was pushed off and so the revenues could come into the system through that tax is no longer there.
these are ways in which the affordable care act is to moderate the growth of overall health care costs which has an impact. >> host: we have rose in franklin west virginia on the line for those that receive benefits. >> caller: good morning. thank you c-span. iow have a question. i'm on social security. i was disabled 20 years ago and so i've been kind of stumbling along. i went on social security in 2016 and i was subjected to the windfall elimination provision and i wonder if you could claim that a little bit better to me. i understand the legislation that's been attempting to gor through over the years because a lot of people apparently have been affected by this and i wonder if you know the status of theus legislation and if we can
help at all thahope at all thatl that. >> guest: can i ask. some of these provisions attempt to compensate for the fact some people spendsp part of their tie working in the retirement system and they are also collecting from social security. it's difficult to reconcile the formula for those two programs they didn't have to pay money intone social security so the ty have two pensions, state and local and social security.
because they are looking at the wage history and not seeing a good portion of it they might think they might be lower income than they actually were at the bottom line a is they were establishing a crude way and they don' don't don't fi don't d there have been proposals in congress in recent years to do it right for reasons that are not clear to me there was a proposal to do that years ago so people would get an individually appropriate adjustments to their benefit and not this crude adjustment that it died despite the lawmakers pushing it out. >> guest: if we sat down and worked out a compromise for the long-term solution, this would be af compliment.
why can't we sit down and work out a compromise? >> guest: because compromise will require sacrifice and nobody wants to have that sacrifice because nobody realizes what is going to happen if we don't make a few notches further into the belt to tighten and we are faced with a catastrophic response later on. >> the medicare depletion is an easier political problem and economic problem because lawmakers can shift the burden off onto providers because what medicare is doing is paying bills to providers or they can do what they've done in the pa
past. that is funded largely by federal taxes and by bringing peoples pay so it is a little bit different political situation than it is for social security. >> host: when do youd think this will get addressed? >> guest: i want to elaborate on why we have this problem because it's important for us to understand them. anothert reason we have this problem is older generations in these programs got a lot more outid of them than the individually c contributed which means the system's finances can only be balanced with other generations are having to put a lotot more in and people don't want to do that. the system's finances contribute
more to the system can be personally received and so they resist attempts to balance them as a whole and so we keep shifting greater and greater losses to the generations. the other reason, and this is unfortunate, but i think there is too much of a political temptation to have an opportunistic approach inn the programs. it's very easy to tell people you don't need to make any sacrifices you deserve everything coming to you. the only problem is politicians stole all the money would help you. these things are untrue, but the problem with these programs. simply as people have been promised much more benefits than their own contributions can finance. if nothing else but it's hard for politicians to tell that. >> host: in san antonio texasne for those that receive benefits, good morning. >> caller: good morning and thank you for taking my call.
i would like to ask a couple of questions. i would like to know what happens to the social security that people do not get a chance to draw because they either pass some of the youngay and old. my husband passed away and didn't draw from his so where does that money go? and another thing, these assurances they take the case then you have to pay $500 before they ever start paying anything on your doctors bills or medicationio or anything. then i'm paying $135 a month that comes out of my social security checks for medicare and i'm retired from the state. i would like to know what
happens to the money. when i asked what would happen to his, i was told nothing. she lets me know i couldn't draw any of his because i had my own. >> host: thanks for the question. >> guest: this is an important set of questions because often times people are under the misimpression their own personal contributions to social security are being saved in an account somewhere and that somehow there is money of theirs that they are drawing back their own after they contribute. it's much more analogous to something like an insurance fund where basicallyns you are being insured against the prospect of living a long life. so what happens is a lot of people that do this a longtime e draw more benefits out of the system but people who died
earlier put a lot more into the system than they ever get out and so that basically what's happening is if someone gets left out of the system because they passed away earlier, you know, they basically do not reap the benefit of the insurance value but someone else in the system did. on the second question certainly there are issues with medicare advantage as there are on all portions of the decay and one of the reasons the rejections took a slightn turn for the worst in near term is medicare advantage payments were a little higher than the previous projectionsbl and it's not a shortfall in the supplementary trust fund but there's very rapid cost growth index fund that causes increasing pressures on the budget so it isn't just a portion that is experiencing the financial strain.
>> guest: if you have a married couple and they receive different benefits from their work histories come if the husband but to say who has a higher benefit passes away some of thef spouse will receive the larger of the two benefits in other words the spouse will receive more than the system alone would have provided that individual so in that situation some of the husband's contribution ends up and the spouse receives. >> host: took over those numbers again from the trustees report that came out this week here's a chart showing the
social security trust fund assets at the beginning of the decline expected to be depleted by $2,034 the projection in the latest report and then here it is for medicare another chart on that for the historical assets and then the depletion starting by 2026. we are talking about the future of the two safetyty net programs and we will of course take you live to the floor of the house of representatives when they gaveled in this morning. on the line for those that receive social security, go ahead. >> caller: yes, i have been receiving it for about eight yearsal now along with a pension so the combination of those two things cause greater stability.
as it relates to the bipartisan policy group i read quite a bit with the white papers and it's a very good dissemination of good methodology. one of the points about this shifting of the responsibility of who pays and contributes. as older generation people, those of us that are 60 plus are part of the generation that is at the beginning of the setup oi social security. you are paying him but then there's a future payment that has to come through.
this also spoke to the client that impact the bottom line impe because that is a program that does in fact pay out quite a bit and it's high income seniors that received high maximum social security benefits to having pensions and investments so the older generation right now i think we have shifted off of thehe young to get in college to not have housing that has the asset though that we are now benefiting from, but to get to the cap it is a fact those of us thatat are high earners can affd to have that shifted. >> guest: i would just
reiterate what we are hearing is consistent with what the public surveys indicate which is when you survey people. having said that although it's going to be part of a discussion we just have to be very clear about what it's likely and unlikely to accomplish. so we are taxing all of the income we will wind up paying a ton of additional benefits to peoplele who don't need them because of this link to the benefits so in order to prevent a very inefficient and wasteful
collection of resources that we needed for the stability of the program and other needs in the federal government we would have to change howen it works to not have that effect. you can't avoid the question of the substantial push him on the benefit side because just lifting the cap, and by the way i would f accentuate some of the figures. some exaggerate i would say the good of lifting the cap because you are basically buying time and so over the 75 year window useful this can percentage of the problem but it's less and less as the window goes on so we can buy some time but we still have most of the problem to solve and we have to be clear about that. let me add one of the reasons
that its popular as i said before i if they wouldnl affecty 7%. of the workers of americ inr the other 93% would be off scott free raising the payroll tax cap puts the burden on the working generations to make a confession on the social security that have been a number of years notwithstanding my boyish looks and very much in favor of the programs but i'm also in favor of asking those of us who have lived comfortably and have asked the woman who called attention from some other organization and assets to spend down for them to contribute in the sense of moderating the growth of the
benefit or making some other kinds of adjustments. i think that this is a societal problem that all o of the sociey should be part of the solution.i >> host: a group that's partneredsc to discuss the trustees report, bipartisan policy is the website if you want to check them out there's about ten minutes left in the discussion. linda in ohio, go ahead. >> caller: good morning. i wanted to mention first that i completely agree with the windfall elimination program that does directly affects me but i feel like it's fair. my question to the gentleman gen this morning is what effect do you see happening w with this latest economy that icy it seems very popular these people that sell things out of their home,
work on the side perhaps they are drivers but i'm assuming a lot of them don't pay into social security. is it a definite revenue problem for the future recipients? >> guest: is >> guest: is a fascinating question because we just had some surprising revisions to the ratio of the taxable labor compensation to the overall gdp. >> host: explain that. >> guest: relative to the size of the economy, there was a smaller tax base for social security and medicare than they previously thought that was going to be.y we don't know why that is, but certainly it suggests that less of our national economic output is emerging on our balance sheets in the form of payroll tax revenue paid to social security and medicare k than we
thought and we don't know why that is the case an that we shod be trying to find out why that is and if for whatever reason -- >> you think the economy as part ois partof that? >> i have no reason to believe it is, but it's certainly the case we are collecting more than we anticipated. >> guest: i think wind up with an interesting issue on the table but i don't spend sleepless nights worrying about this because if you think of the big players in the economy, lyft, uber, air bnb, they collect and give them out of the drivers are the folks that are renting out their apartments and these are big companies and they are reporting these payments to treasury and the irs.
the government knows how much they are receiving and so if they file their income taxes that is a lot different than a gypsy cab or someone selling hot dogs out of a stand on fourth street operating with cash not receiving money through the internet from a big company. >> host: middletown ohio gerry receives medicare and social security. go ahead. >> guest: >> caller: i want to thank them for being there today. look, when the president adds $2.7 trillion on top of our national debt, that isn't paying our way forward. if you don't have the top fortune 500 paying him and giving a tax paperback where they get a refund and you get
the top five wealthiest 5% of people tax breaks where they don't have to pay it in, i can see that they covered through their company and said they would pay about, but i paid into the system for 45 years and i had to beg, borrow and steal and the only ones made up on my case unfortunately was the attorneys and how they put me in this so-called bracket where i get minimum payment. i'm not 67 yet, but they put me in this category, and i would like to ask either of the gentlemen on the panel could they live off of $816 a month and then i've got to pay $350 up front to get my medications. then due to my disability, i've got to pay out almost $400 a
month in medical care and i can't even get help to pay on my hospital bill for an upcoming surgery where they have to do l. four, five and s. one reconstructed back surgery. i met my social security benefits at the age of 44. i paid into my maximum benefit. these other people that are noty paying him coming at you do have undercover that do not report and i've heard it from thousands of people. >> host: thank you for sharing your story. >> guest: there's a number of important elements and i think the first is obviously it does sound like a difficult situation and i think anyone would be challenged to make ends meet in the circumstances the caller is in and certainly, i agree with the preface to the caller's
comment which is dependable and abilities of the people in the programs an and given the necese necessity of action to strengthenen their finances, we ought to be doing a better job of balancing the finances of the federal government and putting ourselves in a fiscal position where we cane address them. having said all that, i would issue a caveat on the other side which is there is no source of the problem in the programs potentially other than the fact that we are promising far more benefits from them then we can pay with the contributions people have made. so they know people will vary routinely say i paid intoin the system my whole lifetime i should be entitled to my benefitsts and in the conceptual sense that is true but it doesn't answer the question of how high the benefits should be and the fact remains it is
promising to be much higher than the contributions workers have put into their have to be adjustments made to balance them because in the aggregate sense, workers haven't paid for the entirety of the benefits and programs that are being paid. >> guest: most of the t problem is our grandparents parents when we provide adequate benefits for our grandparents and parents and they paid him very little amount ofd money and it was a pay-as-you-go system. some of the baby boom population is contributing and now they are coming into the reception benefit stage of life and much of the money they put in saved them from having to take carearf their grandparents and parents financially. >> guest: i'm sorry to interrupt but there is a point bob made before and i want to accentuate when we talk about raising the cap on taxable wages
and bob emphasized that is a way of having people working now in the system to come up with money to bail it out but also the biggest income transfers are along generational lines and the people that are being treated the worst of the system are not the older generation but the younger generations who can raise the cap that you are basically causing people that are taking the biggestst income losses to take bigger ones. >> host: the house coming in a couple of minutes and we will go live to the floor when they come in. thank you for calling in, former medicaid worker go ahead. >> caller: actually that would be medicare. one of the things i would like to say is yes medicare is running out of money and we have a lot of 20-year-olds on medicare that never paid into the system. so this presents a huge issue.
whenever children -- >> guest: you are talking about disabled individuals? >> guest: >> caller: yes. whenever you are talking about children whose parents apply, we are talking children that have just different issues whenever they turn 18, they stay on in our continued for two years, then the states pass them off to the federal government. how many people lik like data tu think we have on medicare and they are getting social security that they have not paid in? >> guest: want to give the guests a chance to respond. >> guest: some of the issues that she brings up? >> guest: these programs pay benefits not only to people who are of retirement age, but to their dependence both social security and medicare for people who8, are dependent children and
so certainly and doesn't consist of both programs you don't have a record of wage contributions by people who are technically beneficiaries come about to earn the benefits for those al there've been observations made by others in the household. >> host: talk about your work with the bipartisand policy center in the minute we have left and what you are going to be doing with thee trustees report that came out this week with more they can find. >> guest: for me this was a very striking report and we are going to be giving another joint publication summarizing the findings later on this year, but i have been struck by how little public and the press attention there has been but it was very sobering and part of that is because there's a natural tendency to override of the depletion date. but we have had aon very southen turn for the worst in the
programs and therprogram said ta greater awareness. we should have prepared these a while ago but a they are startig to take on water and it's going to get hot very fast. >> host: george mason university kate in. center and robert is with the urban institute has a distinguished fellow of the air. you can check out their work at the bipartisan policy.org. thank you very much and come back again.
once a year russian president vladimir putin appears on a national television program to answer questions from russian viewers. in this portion of the program, he answered questions about relations with the west, russian forces and the construction of a 12-mile bridge to the crimean peninsula. this year we have a lot more questions about the relations with russia anda the west. ish should say