tv Washington Journal Charles Blahous Robert Reischauer CSPAN June 8, 2018 1:22am-2:23am EDT
spinning for our discussion this morning on social security and medicare trust fund we are joined now from the urban institute and from number kate center having this discussion after the annual trustees report offered warnings about the long-term health of the trust fund. who are these people that publish this report? the trustees? >> so right now they are only four people secretary of treasury, hhs, secretary of labor and acting social security commissioner. there are supposed to be two memberspppp of the public but their basic job is to report annually on the financial status to make you previously served as public trustees. what is the role of that
person? >> they were added as part of the 1983 social security amendments added specifically to substantiate public confidence in the objectivity with the accuracy and high quality all of those working as trustees are part of the current administration so to make sure with that process those were established. >> why hasn't there been? >> this whole time with the public trustees. the assistant secretaries those positions have to be
filled. vacancy. >> in the absence of the public trustees who worked with the bipartisan policy center talk about your findings for this week's report? >> we haven't made independent estimates with those appropriate numbers and tooo look broadly across the process will there is fairly please with those traditions they have had over several decades and that the trustees have made reasonable set of assumptions of those methodologies to put together
these reports to provide that objective to make here are the top line numbers from the report into be completed as social security trust fund by 3034 so let's start with that term depleted. >> the point at which it is entirely devoid of reserves social security and medicare to maintain those contingency reserve to the extent those expenditures exceed incoming tax revenues so now once those reserves are defeated then those amount of benefits you could pay is limited to the amount coming in and those
payroll tax collections will be far below benefits. so unless there are reforms to extend that solvency of the fund and they have sudden reductions benefits. >> and the social safety net program. >> we try to be very circumspect. and focus on the problem now we both did serve on the bipartisan policy center commission to make to make recommendations to sustain the policy of social security was roughly split through the bipartisan commission measures on the revenue side and measures on the other but we try to them of that analysis
to hear the alarm bells that action needs to be taken soon. is this administration taking the alarm bell seriously? >> i'm not sure they have been heard at all on capitol hill or pennsylvania avenue at the white house.. that the least painful decisions as long as it can if the crisis will occur in 2026 so officials say that is not on my watch right now. and this is a very difficult set of issues we will have to
tighten our belt to do some accommodation of tax increases to slow down spending growth if these programs will continue and they are vital as huge numbers of elderly and disabledam people. >> we will spend the rest of the hour talking about those options and we want to hear from you social security and medicare recipients. and from the urban institute of distinguished fellow and also t17 bipartisan policy center. our first caller from florida for those who receive medicare social security benefits gori ahead. >> yes. i have a question for several
years now the democratic partys has made or tried to get the congress and all to approve taking the calf off of social security so many people in this country that make $120,000 it is common sense. originally from a little town in north carolina talking about the backwoods country lawyer, he had common sense but common sense in this country seems to be gone.se send our jobs overseas that actually takes the tax j base away for those jobs that are out there now and driving a
tractor-trailer 35 years. it is a services industry job that if you don't have the plants producing goods when i was driving a truck i didn't have the money to go out to spend to the economy. >> guest: it is nice to talk about answers rather than the problem and i complemented the caller for part of the solution. that isn't always the case. too often people deny this is an urgent problem and when we served as trustees that the public focus on the so-called diplomacy was misplaced becausewa the problem doesn't begin just when the trust fund runs out it is far too large
to solving any practical way what we try to carry forward is already the shortfalls that continued further delay makes it almost impossible to do so there was a furtherha warning bell to show that both are beginning the depletion. this year and that was very startling development and that wasn't to happen until the early 2020s. this was a more immediate problem but back to the suggestions, to the extent there will be a bipartisan discussion coming with proposals on the revenue side and expenditure side, it is likely an increase of the taxation is a part of that discussion because the effects
are concentrated on higher income all. but to caution about that it isn't that much to improve the overall policy of the program because benefits are linked to contributions the more you collect the more you pay out so you would improve that by increasing the cap but absent other changes he still have a problem to deal with. >> the trustees report the hospital insurance trust fund and that was depleted by 3034 so talk about last year's report., how did those dates change from last year? >> with respect social
security they did not change at' all. it is still bad but they didn't deteriorate but what we should be pleased about but with respect to medicare to move forward four years sooner than it was 2029 in asher's report it is 2026 now. if you think about that that the important legislation is done and. >> what is the cause of the three-year jump? >> interestingly enough, largely because the base of the projections that are made. this year lower the unanticipated. so the trustees thought 2017 would have more wages or more
payroll tax payments into the system so they have that baselevel from those projections so in a way things were markedly worse going forward as opposed to where they were. >> do you think the numbers could be different if those involved inhe the process? >> it is hard to say that my initial reading of those demographics that the trustees did a good job to make some small changes here and there are not making any radical changes over what we have the past year. >> for social security medicare recipients now those
that receive social security and medicare go ahead. >> caller: i just wanted to comment not only the situation with medicare and social security but the general economic outlook the savings among the individuals is down and what people carry is up and the wage increases are not distantly improving. all of that along with social security and medicare without
and outlook for any of this. and i just wonder if they could comment on that? >> in short i agree with the concerns we have a very difficult situation with two very large programs with substantial changes. and at this point there is no way to avoid the adverse effects for those who participate in with respect to the overall benefit of the federal government. so in a better policy world to have the fiscal house in order where we are in a position with the financial markets have done pretty well the labor markets do well and for
fiscal consolidation with the long-term outlook. it isn't federal debt to undermine the ability to deal with these challenges and programs. because of that i share the caller's concern not where we should be given those needs. >> to talk about the future of social security and medicare to say the administration's economic agenda tax cut and improved trade agreements will generate the long-term growth needed for these programs. do you agree? >> no. the consensus of myam profession is to say that the boost we get is relatively short and that is because in large measure we are accumulating debt.
that will produce investment and raise interest rates and depressed economic growth. over the long run, it is unlikely the administration's hopes with respect to the tax cut and the regulation have the dynamic effect they would like to see. when they come to pass that very few people want them to do that this is the important set of problems and through social security both programs account for 40%.
to raise the tax on 127,000 limit i think it raised should be raised to a quarter million. because the population outside of the 140 million that will help to make this solvent but in the next 20 years that would be over 100 million people receiving social security. >> let's just elaborate on our response if we raise the cap on those learnings that are subject but the fact is about 7% of earners are in that
rangeel. if we eliminated that completely with the medicare payroll tax, it would solve about 55% of the problems if we did it change the benefits with the whole basis of the social security system is a return on what you have contributed over time. and contributors is much lower than the low income contributors. so let's allow those who will pay more and let the benefits rise, then it solves the d6%
so no matter what we do in that sense where is the sweet spot? >> i think personally it is whatever you can agree. gradually three or four or $5000 per year. >> are there any members on both sides looking to that spot? >> there are a number of proposals and as you might imagine people tend to put out those to reflect their own starting point so one side has it all by restraining benefits the other does it all by raising taxes so it needs to reflect the starting position
but we all have to meet somewhere in the middle. >> go-ahead salem oregon. >> i am a retired teamster but off the subject real quick to thinkk my government for the deregulation and to have those three companies and i get social security and medicare but why do we stop sending billions of dollars to other countries? that's all i have to say. >> is in the integrated world and have allies around the world and a big chunk of the world's population live in
abject poverty. helping them and our allies, protecting ourselves is very important. >> what about all foreign aid today with that fix the problem? >> not all of it. with this perception that you often see is that somehow important programs are shortchanged if you look at the growth of the federal budget that is exactly the opposite what is happening is a mandatory spending program that are eating up a larger share of the budget and we were heading back so if you like the idea of cutting other spending that is alreadyin happening and so we are to the point where those programs of themselves.
>> we have a half hour left in our discussion and now we are on the line for those receiving benefits. go ahead. >> good morning. first, thank you for the employees of social security. there is a waiting roomom of 100 people so it looks like ten or 12 our retirement age. how has the disability portion grow as opposed to retirement. >> that is a great question because many people don'tma realize it is a retirement program also to benefit surviving widow and widowers in providing for disability benefits. now the disability insurance trust fund is facing much more
imminent the old survivors trust fund that is no longer these case. if you look at the financial pressures and the shortfalls with absolute and relative terms with a very substantial burst during the recession is pretty typical as those increase they dropped a lot over the last two years as the labor market has recovered it one of the reasons is that the near-term bad news about payroll tax has been offset going forward to reflect that lower rate of disability relative to what was happening before.
>> good morning. thanks for taking my call and to discuss this topic. i want to know why it is you never see white-collar crimes for medicareol fraud. why is the money that is missing from the army and dod? where is it and why is nobody addressing this issue? if we get that $21 trillion back that was stolen we would not be in this mess that is the issue. >> i don't know anything it couldn't be trillions of dollars there are billions of
dollars with dod that has gone missingi . i am not knowledgeable on that that with medicare fraud over the last decade the justice department it has improved greatly with medicaid fraud as well to be quite substantial recoveries they are big and complicated and we have tried not to encumber them with the doctor sentences the bill and it is almost automatically but it is only later intel they go
back so there is the advantage that the government is doing an okay job going after this. >> so what impacted the passage of the affordable care act have on the projection of the completion date and did that change from the efforts topa hold back on -- rollback? >> the second part of the question is yes. one part was the creation of the independent payment commission.si that's her at the safety gal. with medicare spending went up add excessive rate on the
commission charged with coming up with ideas that would automatically be put into action to moderate the growth and that was abolished by the efforts of the administration and those in congress. also there was a new tax with very high benefit that has been subsidized and that tax was supposed to go into effect over the next couple years but pushed off assuming coming into that system, this is a
way the affordable care act acted to moderate the growth of the overall cost. >> and those.st >> thank you c-span. i am on social security now and we are o stumbling along but i was subjected to the elimination provision and i am wondering if you could explain that? i understand there is legislation attempting to go through because a lot of people are affected by this so do you have a status of the legislatio legislation?
what if we could hope that they will repeal that so we are not punished? u >> it could be employment state or local government because some of these attempt in a crude way to compensate for the fact some people spend part of their lives collecting from social security it is difficult to reconcile those two programs. >> these are people who work for the federal government they didn't have to pay money into social security with state and local so how do you match that?
>> because the social security system looks at the wage history they may think they could have and actually much lower income for that earnings history. but to be established in a very rude way but there have been proposals in recent years to have bader did. and to be individual appropriate that crude adjustment despite the lawmakers attempts to push that forward in the house. >> this would be a component a of.
>> the compromise will require sacrifice and nobody wants to have that sacrifice because what will happen if we don't make those notches in our belts and faced with a response later on. >> what about 2026? >> in a sense the medicare completion is an easier political problem not economic because lawmakers can shift the burden onto the providers do they the bills to the providers before they can do what they have done in the
past which is shipped those expensive lung -- expenses paid for out of the hospital insurance fund and those is more of a political situation. >> when will this get done? >> i want to elaborate on why we have this problem because it is important to understand older generations god a lot more out of them than originally contributed. they can only be balanced if others put a lot more in than they get out. people get very upset when this requires them to get more
than they receive so this system as a whole, we keep shifting greater to other generations. and the other that is unfortunate b that there is too much of a political temptation to have an often opportunistic approach. you deserve everything that is coming to you you but the problem with the programs more than their own contribution. it is hard to tell people that. >> good morning and thank you for taking my call with a
couple of questions so what happens to the social security that people do not get a chance to draw on? because they pass away or that? so where does that money go? and the insurance that you have with medicare advantage you can break medicare. and then you have to pay 500 before theyy pay anything then you pay $135 per month that comes out of my social security check for medicare and i'm retired from the state. so what happens to that money? when i asked when i retired
and he told me nothing. so hee let me know i couldn't draw on his because i had my ow own. >> this is an important set of questions because often times people are under the impression that their own personal contributions are saved is the account somewhere that they just throw back their own money it is much more analogous like insurance fund where basically you are insured against the prospect to live a long life. so they draw a lot more benefits from people who die earlier they get put in more
than they get out. if somebody passes awayea earlier they did not reap the benefit of that insurance value but somebody else in the system did. certainly there are issues with medicare advantage and the reason that medicare advantage payments were higher than previous projections. but it is no means limited to medicare advantage present not only with the trust fund but also rapid cost from the trust fund that causes the increasing pressures on the federal budget. oor it isn't any one that experiences the financial strain. fferent benefits from th
work histories, if the husband, et's say, who has a higher social security benefit passes away, the 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 a sense, some of, in that situation, which i'm not sure at all is joanne's situation, but in that situation, some of the husband's contribution ends up, even though he's deceased, boosting the payment that the spouse receives. host: to go over the top-line number from the trustee's report that came out for this week, here's a chart showing the social security trust fund
assets. it's projected the beginning of decline, expected to be depleted by 2034. that was the projection in the latest report, and then here it is for medicare, another chart on that, and the medicare h.i. trust fund assets, the historical assets going to 2016, and then the depletion starting, expected to be depleted by 2026. we're talking about the future of those two social safety net programs for about the next 15 minutes. we'll take you live to the floor of the house of representatives when they gavel in this morning. but until then, taking your calls. charlotte, albany, georgia, the line for those who receive social security. go ahead. caller: yes, good morning. yes, have been seeing it since retiring about eight years now. along with a pension, and so the combination of those two, of course, creates great stability. as it relates to the bipartisan
policy group that i read quite a bit with the white papers, d it's a very good dissemination of good methodology, one of the things about this shifting of the responsibility of who pays and who contributes, currently, as older generation people, we are, those of us who are 60 plus, are a part of the generation that, in fact, from the beginning of let's say the setup of social security, we are, in fact, having -- it's an arrears program, is that how i understand it? if it actually is an arrears program, where you're paying -- you're paying in, but then there's a future payment that has to come for you. to get to the cap, i think the cap issue is where this debate comes. the medicare advantage with the lady from texas also spoke to the very point that medicare advantage does, in fact, impact
that bottom line, because that is a program that does, in fact, pay out quite a bit, and i think it's actually high-income seniors, as i'm one of those six-figure seniors who had careers and we received high maximum social security benefit in addition to pension and investment. and so the older generation right now are, in fact, the recipients and the beneficiaries of i think this stability that we have in the society, and we've shifted this stability off of the young to get in college, to not being able to have housing that has assets that we have had, that we are now benefiting from. but to get to the cap, it is, in fact, a flat-out fact that we need to, and we can, those of us who are high earners and those of us who are high earners currently, can afford to have that cap shifted. guest: well, i would just reiterate, i think what we're hearing on the call is very
consistent with what public surveys usually indicate, which is when you survey people as to what should be done about social security, the idea of raising the cap to which -- on which social security taxes are assessed, is probably more favorably cited than anything else. having said that, amphetamine it's going to be part of the discussion, we need to be very clear-sighted about what it's likely to accomplish and what it's not likely to accomplish. if we do, in a hypothetical circumstance, as bob indicated, lift the cap entirely so that we're taxing all the income of the bill gates of the world and the jeff bezos of the world, you know, we're going to be winding up paying a ton of additional benefits to people who don't need them because of this link between contributions and benefits. so in order to prevent a very inefficient and really wasteful
collection of resources that we probably need for the stability of the program and other needs of the federal government, we would so chang how the benefit formula works so as to want have that effect. so you really can't avoid the question of having to do a substantial portion tv through reforms on the benefit side, because just lifting the cap, and by the way, i would accentuate some of the figures that bob indicated and say that even those numbers to an extent rate, i would say, the good of lifting the cap, because you're basically buying time, and so, yes, over the 75-year window, you saw a certain percentage of the problem, but it's less and less as the 75-year window goes on and less and less after that. so we can buy time by lifting the cap. we still have most of the problem to solve. and we have to be just clear-sighted about that. guest: let me just add that one of the reasons why lifting the cap is popular is, as i said
before, it would affect only 7% of the workers in america. the other 93% would be off scot-free. raising the payroll tax or the p puts all of that burden on working generations, and just to make a confession here, i'm a social security and medicare recipient and have been for a number of years, notwithstanding my boyish looks. and, you know, am very much in favor of these programs. but i'm also in favor of asking those of us who have lived comfortably and have as the woman who called, as was said, a pension from some other organization, some assets to spend down, for them to contribute a little in the sense of moderating the growth of our benefits or making some
other kinds of adjustments. i think this is a societal problem that all of society should be part of the solution. host: the caller mentioned she was a fan of the bipartisan policy center. we partnered with them to discuss this trustees report. bipartisanpolicy.org is the website if viewers want to check out about 10 minutes left in our discussion. linda, ohio, go ahead. caller: hey, good morning. i wanted to mention first that i completely agree with the windfall elimination program, which does directly affect me, but i feel like it's fair. my question to the gentleman this morning is what effect do you see happening with this latest gig economy? see it -- it's very popular, people selling things out of their home, perhaps lyft or
uber drivers, but i'm assume ago lot of them don't pay into social security, and is it a definite revenue problem for future recipients. host: thanks for the question. guest: that's actually a very fascinating question, because we just had some surprising revisions to the ratio of taxable labor compensation to overall g.d.p. host: explain that a little bit. guest: what it means is that relative to the size of our economy, there was a smaller tax base for social security and medicare than the trustees previously thought lfs going to be. now, we don't know why that is, but, you know, 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 than we previously thought. and we don't know why that is the case, and certainly we should be trying to find out
why that is. and if for whatever reason -- host: do you think the gig economy is part of that? guest: i have no reason to believe it is, but it's certainly the case that we're collecting less payroll tax revenue than we anticipated. guest: i think linda really put an interesting issue here on the table, but i guess i don't spend sleepless nights worrying about this, because if you think the big players in the g economy, lyft, uber, airbnb, the way they collect, they collect the revenues and then they give them out to the drivers or the folks that are renting out their apartments. and these are big companies, and they're reporting these payments to treasury and the i.r.s. host: social security is coming out of that? guest: and social security -- well, the government knows how much they're receiving.
and so if they file their income taxes, that's a lot different from a gipp a cab or a guy who's selling hotdogs out of a stand on 34th street, operating with cash, not receiving money through the internet from a big cap. host: middletown, ohio, gary receives both medicare and social security. go ahead. guest: yeah, i want to thank the panelists for being there today. hey, look, when the president adds $2.7 trillion on top of our already national debt, that's not paying our way forward. look, if you don't have the top fortune 500 paying in and paper back tax where they get a refund, and when you give the top five
wealthiest 5% people tax breaks where they don't have to pay it in, yeah, i can see that they cover it through their company, and they show where they pay it out. but look, i paid into the system for 45 years. and i had to beg, borrow and steal, and the only ones that made out on my case, unfortunately, was the attorneys and how they put me in this so-called bracket to where i get minimum payment. i'm not 67 yet, but they put me in this little category, and i would like to ask either gentlemen on the panel, could they live off of $816 a month, and then i got to pay $350 upfront to get my medications, then i got to do to my disability, you have to pay out -- due to my disability, i have to pay out almost $400 a month
in mel care, and i can't even get help to pay my hospital bill on an upcoming surgery where they have to do l-4, l-5, s-1 reconstructive back surgery, and i've paid into -- i'm at my social security benefits at the age of 44. i paid in. my maximum benefits. now, these other people that are not paying it in, and yes, you do these under the table companies that don't report, and they do not report, i know it firsthand, because i've heard it from thousands of people. host: thanks for sharing your story. guest: well, i think, first of all, there are a number of port elements to the caller's questions and comments. the first one is it obviously does sound like a very difficult situation, and i think anyone would be challenged to try to make ends meet in the circumstances that the caller is in. d certainly i agree with the preface to the caller's comment, which is that, you know, given the vulnerabilities
of people in these programs, and given the necessity of action to strengthen 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 can address them. having said all that, you know, i would issue a caveat on the ther side, which is that flyers source of the problem in these programs essentially other than the fact that we are promising far more benefits from them than we are -- than we can pay with the contributions that people have made. so even though people will very routinely say i paid into the system my whole lifetime, i should be entitled to my benefits, in a conceptual sense, that is true. but it doesn't answer the question of how high the benefits should be and the factory mains that the benefits of the system is promising are much higher than the contributions that workers have put in.
and so there has to be adjustments made to balance them, because in an aggregate sense, workers have not paid for the entirety of the benefits from these programs that are being paid. host: the caller brings up -- guest: but most of the problem is really our grandparents' parents, when they provided adequate benefits for our grandparents and parents, and they paid in very, very little amounts of money, and it was pay as you go system. so large baby boom population is contributing, and now they're coming into the eception of benefit stage of life, and much of the money they put in saved them from having to take care of their grandparents and parents financially. guest: i'm sorry to interrupt, but there's a point that bob made before and made again, and i want to accentuate t. we talk about raising the cap on taxable wages. that is a way of having people
working now in the system basically, come up with the money to bail it out. but it's also the case that the biggest income transfers in the system are along generational lines. the people who are already being treated the worst in the system are not the older generation, but are the younger generations. but yes, you can rails the cap on taxable wages, but you're basically causing the people to take even bigger losses. host: the house coming in in just a couple of minutes. we'll try to take one or two more calls. we'll take you live to the house when they do come in. vera, former medicare worker, go ahead. caller: actually, that would be medicare. host: medicare worker. caller: yeah, that's ok. so the one thing that i just would like to say is, yeah, medicare is running out of money, and we have a lot of 20-year-olds on medicare that have never paid into the system. this plents a huge issue. guest: you're talking about disabled individuals?
caller: yes, whenever you're talking about children whose parents applied for s.s.i., we're talking children that have just different issues. whenever they turn 18, they stay on s.s.i. if they're continued disabled for two years. then the states pass them off to the federal government. how many people like that do you think we have on medicare and are getting social security that have not paid in? host: want to give our guests a chance to respond. guest: i don't have the fainltest idea. she stumped me. host: some of the issues she brings up. guest: but i think that's right. these programs, they pay benefits not only to people who are of retirement age, but to their depends ends, both social security and medicare, avenues of eligibility for people who are 18, dependent children, and so certainly in those instances, in both programs,
you don't have a record of wage contributions by people you can say are technically beneficiaries, but in order to earn the benefits for those individuals, there have been contributions made by other workers in the household. host: talk about your work with the policy center and about the minute we have left and what you're going to be doing with the trustees report that came out this week, what more they can find from it. guest: well, again, for me, this was a very striking report. and we're going to be doing another joint publication summarizing the findings later on this year. but i have been struck by how little public and press attention there's been to a report that i think was very sobering. and i think part of that is because there is a natural tendency to overemphasize the projected depression dates. we've had a very sudden and immediate turn for the worse in the short-term finances of these programs, and there needs -- e greater awareness that
the new 12 mile bridge. >> translator: this year we have a lot more questions about the relationship between russia and the west. i should say it's not only about some alarming feelings but also about the feelings of disappointment. i will quote one of the messages we received. as if russia should be blamed for everything. how should we behave when no one even turns to listen to our arguments and we can clearly s