Skip to main content

tv   Washington Journal Charles Blahous Robert Reischauer  CSPAN  June 7, 2018 1:21pm-2:22pm EDT

1:21 pm
watch the cbs news special report from june 6th, 1968, the night robert kennedy died from gunshot wounds. >> they quickly decided to transfer him to good samaritan hospital, where the facilities were better for delicate brain surgery. mrs. kennedy was with him all of the time riding in the ambulance now from one hospital to the other. the suspect, now identified as sirhan sirhan, was grabbed by rafer johnson and rosey greer, the two kennedy men. then he was led by police back through the ballroom and the hotel. some of the officers had to protect him from the crowd. there were several kennedy supporters, bystanders who were close to hysteria at this point, and there was concern for the suspect's safety. >> watch "reel america," sunday at 4:00 p.m. eastern on american history tv on c-span3. for a discussion this
1:22 pm
morning on the future of social security and medicare trust funds, we're joined now by robert reischauer of the urban institute, and charles blahous of george mason university. having this discussion after the publication this week of the annual trustees report that offered some warnings about the long-term health of those trust funds. so, mr. blahous, first, who are these people who publish this report, the trustees that we call them? >> well, right now, the trustees are only four people -- the secretary of the treasury, secretary of hhs, the secretary of labor, and the acting social security commissioner. now, by law, there are supposed to be six trustees. there's supposed to be two members of the public, one from each party serving as public trustees, but their basic job is to report annually on the financial status of the social security and medicare trust funds. >> and should note, you both previously served as public trustees. what is the role of that person, for those two people? >> well, the public trustee
1:23 pm
positions were added as part of the 1983 social security amendments, and they were added very specifically to substantiate public confidence in the objectivity and, you know, accuracy and high quality of the trustees' projections. basically, apart from the public trustees, all of the people working as trustees are members of the current administration. and so, in order to make sure that there was independent, bipartisan oversight of the projection process, the public trustee positions were established. >> so, mr. reischauer, why hasn't there been any since 2015? >> well, this administration has had trouble filling the appointments and i think public trustees are fairly down in the private list of any administration, compared to deputy assistant secretaries, assistant secretaries and all of the other positions that have to be filled. so, i'm hopeful that this
1:24 pm
vacancy situation will end soon. >> but with those vacancies, in the absence of public trustees, you both have worked with the bipartisan policy center to go through these reports. talk about your findings and the comparison to what this week's report found. >> well, we haven't made independent estimates of the appropriate numbers and the projections, but rather looked broadly across the process and the results, and i think speaking for myself and probably for chuck as well, we're fairly pleased that the traditions that the trustees have had over seral decades have persisted. in other words, the trustees have made reasonable sets of assumptions, used consensus methodologies to put together
1:25 pm
these reports, which provide an objective outlook on the problems social security and medicare face. >> here are the top-line numbers from this year's trustees report. the social security and medicare trust fund expected to be completed by 2026, social security trust fund completed by 2024. start with the term of depleted. >> that's when the trust fund is totally devoid of reserves, both social security and medicare maintain basically sort of contingency reserves. they hold them in their trust funds. so, to the extent that expenditures in those programs exceed incoming tax revenues in a particular year, they have those reserves to draw upon. now, once those reserves are depleted, then the amount of benefits that you can pay, or insurance payments that you can make for medicare is going to be limited to the amount coming in in payroll tax revenue. and in our current situation,
1:26 pm
those payroll tax collections are going to be far, far below what is needed to pay benefits. so, unless there are reforms to extend the solvency of the program's trust funds, beneficiaries are at risk of sudden reductions in their benefits. >> and what reforms are you proposing that are instituted in both these programs, both these social safety net programs? >> we try to be very circumspect about this and focus on analyzing the underlying fiscal problem. bob and i both did serve on a bipartisan policy center retirement security commission that did make recommendations for sustaining the solvency of social security, and it was roughly split, as you will manage, with a bipartisan commission between revenues -- measures on the revenue side and measures on the slowing expenditures, but we try to keep those policy views out of our analysis of the basic problem. i think what we're trying to do is make sure that lawmakers and
1:27 pm
the public, and certainly the press, are hearing the alarm bells that the trustees are ringing, that action needs to be taken soon or else these programs are in substantial trouble. >> mr. reischauer, do you think the administration is taking seriously the alarm bells? >> i'm not sure they've been heard at all, either on capitol hill or down pennsylvania avenue at the white house. we have a political system that delays painful decisions as long as they can, and when somebody says, well, a crisis is going to occur in 2026 or 2034, most elected officials say, well, you know, that's not on my watch right now, i'll deal with the crises of the day. and this is a very difficult set of issues, because we're going to have to tighten our belts. as chuck said, we're going to have to do some combination of tax increases and slowing down
1:28 pm
spending growth, if these programs are going to continue, and they're vital programs for, you know, huge numbers of old -- elderly and disabled people in america. >> we'll be spending the rest of the hour in our program talking about those potential options, talking about the future of social security and medicare. as we do, we want to hear from you this morning, a special line set aside for social security and medicare recipients, 202-748-8000 is that number. all others 202-748-8001. our guest, again, robert reischauer of the urban institute, distinguished fellow there. charles blahous is with the bipartisan policy center, as well as george mason university's mercades center. for the line receiving social security or med call benefits, go ahead. >> caller: yes, i've got a question. you know, for several years now,
1:29 pm
the democratic party has made -- you know, they have tried to get the congress and all to approve taking the cap off of social security pay-in. you know, there's so many people in this country that make way more than $120,000. it's common sense. i mean, i'm originally from a little town in north carolina where they had a lawyer named sam irvin. you know, he's talking about, he was a backwoods country lawyer, you know. the man had common sense. common sense in this country seems to be gone. i mean, we send our jobs overseas, which actually takes our tax base away. those jobs that are out there now are service industry jobs. myself, i drove a tractor-trailer for about 35 years. you know, it's a service
1:30 pm
industry job. but you know, if you don't have the plants and all producing goods, that service industry job, i can't -- when i was driving a truck, you know, loads weren't there to pick up, the loads weren't there to pick up. i didn't have the money to go out and eat at the restaurant, to go out to spend back into the economy. >> thanks for sharing your story. charles blahous, what do you want to pick up on? >> well, it's always nice to hear someone talking about answers, rather than denying the problem, so i would compliment the caller for proposing a solution, or at least part of a solution. that isn't always the case, and too often you hear people denying that this is an urgent problem. and one of the points that i think bob and i tried to make repeatedly when we served as trustees, is that the excessive public focus on the so-called insolvency date in social security and medicare, was really very much misplaced, because the problem doesn't begin only when the trust funds run out. the problem by then is far too large to solve in any practical
1:31 pm
way. and the message that we have tried to carry forward is that already the shortfalls are so large in both of these programs that continued further delay in solving them makes it almost impossible to do so. and there was a further warning bell that went off this year in this year's reports that showed that both of the program's trust funds are actually beginning their depletion period this year, and that is a very startling and almost stunning development, because that wasn't supposed to happen until the early 2020s in both programs, but it's starting right away. so, this is a much more immediate problem than we knew as of a year ago. but back to the caller's suggestion. to the extent that there is going to be a bipartisan discussion, which we hope there will some day, and people are coming to the table with proposals on the revenue side as well as the expenditure side, it's likely that an increase of the cap on wages subject to social security taxation is going to be a part of that discussion because the effects of that tend to be concentrated
1:32 pm
on higher-income people. and that was certainly the case with the retirement security commission that we served on. but i would issue a caution about that. it doesn't accomplish that much in terms of improving the overall solvency of the program. because benefits are linked to contributions, the more you collect from people, the more you pay out in benefits. now, people on the high-income end, they get a low return, so you would somewhat improve the solvency of the system by increasing the cap. but absent many other substantial changes, you're still going to have the vast majority of the problem to deal with. >> top-line numbers from this year's trustees report -- the medicare hospital insurance trust fund depleted by 2026, the social security trust fund depleted by 2034. mr. reischauer, mr. blahous was talking about the difference from last year's report. how did those insolvency dates change from last year's report? >> well, with respect to social security, they didn't change at all. which is a bit of good-bad news,
1:33 pm
in a sense. i mean, it's still bad, but that it didn't deteriorate we should be pleased about. with respect to medicare, it moved forward by four years sooner than it was. so, it was 2029 in last year's report. it's 2026 now. when you think about that, given the slow pace at which important legislation gets done here, that's tomorrow. >> what was the cause of that three-year jump that it will become insolvent three years sooner? >> well, interestingly enough, it was largely because the base off of which the projections were being made this year is lower than it was anticipated last year. so, last year, the trustees thought that 2017 would have more wages, more payroll tax payments into the system than
1:34 pm
turned out to be the case. so, they had to lower down the base off of which the projections were made. so, in a way, it wasn't that they looked out and things were markedly worse going forward as opposed to the point at which they started was lower. >> do you think these are rosy numbers, or do you think they might be different if they were two public trustees involved in the process this year? >> hard to say. my initial reading of the various assumptions -- and there are lots of other ones, demographic ones, mortality, immigration, ferrtility assumptions -- that the trustees did a very good job of making some small changes here and there but not making any radical changes, and quite sensible ones, given what we've learned over the past year. >> back to your calls again, lines for social security and medicare recipients, 202-748-8000. all others 202-748-8001.
1:35 pm
scott's in maine for the line for those receiving both social security and medicare. go ahead. scott, are you with us this morning? we'll go to myra, who receives social security benefits, newport news, virginia. myra, go ahead. >> caller: yes. i was just wanted to comment on not only the situation with medicare and social security, but the general economic outlook doesn't bode pretty well for the economy. i mean, the savings rate among individuals is down. the debt load that people are carrying, it is up. and wage increases are not consistently improving. all of that along with social security and medicare, it all
1:36 pm
kind of bodes for a not too good economic outlook on any of this, and i was just wondering if they could comment on that? >> mr. blahous? >> well, in short, i agree with the caller's concerns. we have a very difficult situation that we're facing with two very large programs, where very substantial changes are going to have to be made. they've been delayed far too long. and at this point, there is simply no way to avoid there being adverse effects on people who participate in those programs, and certainly, probably with respect to the overall budget of the federal government, because the changes have been postponed for so long. now, in a better policy world, we would have gotten the rest of our fiscal house in order so we'd be better positioned to take on those challenges, but we haven't. we're in a position where we actually have the economy, at least in the near term, performing relatively well. financial markets have done pretty well the last few years. the labor market's doing well. unemployment is down. this ought to be a moment for fiscal consolidation and
1:37 pm
improving the long-term outlook. this is not really a moment to be floating a huge amount of federal debt and undermining our ability to deal with these challenges in these programs. so, because of that, i share the caller's concern. i think we are not in as good a fiscal position as we should be, given what these programs need. >> a quote from treasury secretary mnuchin on the future of social security and medicare, "the new york times" story from this week, saying that "the administration's economic agenda, tax cuts, regulatory reform and improved trade agreements, will generate the long-term growth needed to help secure these programs." do you agree? >> no, i don't. i think i'm with the consensus of my profession, economists, in saying that the boost that we're going to get is relatively short term, and that's because in large measure, we're accumulating debt at a very high rate, and that debt will reduce
1:38 pm
investment, it will raise interest rates, and it will depress economic growth. so, over the longer run, it's unlikely that the administration's hopes with respect to a tax cut and the deregulation are going to have the dynamic effects that they would like to see. if, for some reason, they came to pass, the situation in medicare and social security would be markedly improved, but i think very few people want to make that bet. this is, as chuck said, way too important set a problems to roll the dice. >> about 61.5 million people receive retirement and benefits from social security, 58.4 million receive medicare and they both account for 40% of all federal spending. we're talking about the future of those programs this morning. for our last 40 minutes this morning on the "washington
1:39 pm
journal," you can join in. those who receive social security and medicare benefits, 202-748-8000. all others, 202-748-8001. oscar on the line for others, go ahead. >> caller: yes, hi. good morning, gentlemen. i just wanted to ask a question about the limit. i know that the trust fund, its depletion is an issue, but there is a maximum benefit on retirement of $2,687 right now for a full retirement-age person. now, given that there are 140 million people that are living under poverty, i don't think 140 million people that retire today will be receiving $2,600. so, i question, how can it be that you cannot raise the tax limit -- or you commented earlier that it may not make a ripple to raise the tax from
1:40 pm
127,000 limit, or i think it's going to go up to 130, probably, but i think it should be raised to 250,000, because the rest of the population, outside of the 140 million, they do make over $200,000, $300,000. and that will help allow us to make this solvent. in the next 10, 12, 20 years, that 61 million or 68 million people will be over 100 million people that are receiving social security. >> oscar, thanks for the call. mr. reischauer. >> yes, let's just elaborate on chuck's response to what happens if we raise the cap on the portion of earnings that are subject to payroll tax. the fact is that only about 7% of earners are in the above-the-cap range.
1:41 pm
if we eliminated the cap completely, which is the case with medicare payroll tax, the h.i. tax, it would solve about 55% of the problem, if we didn't change the benefits that those people receive. and as chuck says, the whole basis of the social security system is you get a return on what you've contributed over time, although the return for high-income contributors is much lower than it is for low-income contributors. if you said, well, let's keep that situation the same, let's allow these people who are going to pay more -- the pro basketball players, the hedge fund guys -- we'll let their benefits rise, then it solves about 36% of the total problem. so, no matter what we do in that
1:42 pm
sense, we still have a big chunk to deal with. >> where do you think the sweet spot is, then? >> oh, i think the sweet spot, personally, is whatever you can get agreement between republicans and democrats for. gradually rise, raising it, you know, $3,000, $4,000, $5,000 a year over a long period of time i think would make a lot of sense. >> mr. blahous, is there any members on both sides that are coming together looking for that sweet spot right now? is there any proposals on the table in congress? >> actually, there are a number of proposals in congress that have come out over the last few years. as you might imagine, people tend to put out proposals reflecting their own negotiating starting point, so you'll see proposals on the one side to do it all by constraining the growth of benefits, on the other side to do it all by raising taxes. so, the individual proposals tend to reflect the starting positions of the two parties. but ultimately, we're going to
1:43 pm
have to meet somewhere in the middle. >> sbob in salem, oregon, on that line for those who receive benefits. go ahead. >> caller: yeah, good morning, gentlemen. how are you doing? >> doing well. >> good. >> caller: yeah, good. hey, i'm a retired steamst stes teamster for a major freight company going on 14 years in november. thank you. off the subject real quick, i'd like to thank my government for passing deregulation and having three companies swept out from under my feet. and then my issue is, i get social security and medicare. thank you. but why don't we stop sending billions of dollars to other countries and spend it on america? that's all i have to say, gentlemen. good day. >> mr. reischauer, you want to start? >> well, we live in an integrated world. we have dangers facing us and allies around the world. we have a big chunk of the world's population living in
1:44 pm
abject poverty. helping them, helping our allies, protecting ourselves i think is very important. >> if we cut off foreign aid today, would it fix the problem that we're talking about? >> not at all. in fact, i think the misperception, i think, that you often see in many public discussions is that, somehow, important programs like social security and medicare are being short-changed because resources are being diverted elsewhere. if you look at the growth of the federal budget over the last several decades, it's exactly the opposite. what's happening is that the mandatory spending programs -- social security, medicare, medicaid -- they are eating up a larger and larger share of the budget, and we're actually cutting back the share of the budget devoted to defense, to oth other domestic appropriations and that category. if you like the idea of cutting other spending to make more room for social security and medicare, that's already happening in spades. the challenge we have is that we're getting to the point where even those programs themselves are overwhelming our ability to
1:45 pm
finance. >> john's waiting in alabama on the line for those who receive medicare and social security benefits. go ahead. >> caller: good morning, gentlemen. first, i'd like to say thank you for the employees of social security. they seem to be awfully effective. second comment i'd like to make is, each time i go into a social security office, there's a waiting room of about 100 people. and out of 100 people there, it looks like about 10 or 12 are retirement age. how has the disability portion of social security grown as opposed to retirement age? >> this is a great question, actually, because many people don't realize that social security is not just a retirement program. it's a retirement program. it's also a program that pays benefits to surviving widows and widowers and dependent children, and it's a program that provides for disability benefits. now, the disability insurance trust fund as of a few years ago
1:46 pm
is facing much more imminent depletion than the other, but that's actually not the case. you look at the financial pressures and the size of the shortfalls, they're much larger on the retirement side now, both in absolute and relative terms, than they are on the disabilities side. there was a very substantial burst in disability applications and awards during the recession. that's pretty typical. whenever the labor market goes south, disability applications increase and awas increase. they have dropped a lot over the last few years as the labor market has recovered. and actually, one of the reasons that the near-term bad news about payroll taxes has been offset a little bit by some improvements in the projections going forward, it reflects that lower rate of disability application and approval in the last couple of years relative to what was happening before. >> mr. reischauer, you've got denise in brick, new jersey. good morning.
1:47 pm
>> caller: good morning. thank you for taking my call, c-span, and thank you to both of you gentlemen for being on the show discussing this topic. my issue is this. i want to know why it is that you never see white-collar crime for medicare fraud. that's number one, the number of people involved in it. that's number one. and number two, why is it that $21 trillion is currently missing from two departments? and this is a fact. from the army and -- from the dod and hud. why is that money missing? where is it? and why is nobody addressing this issue? we should be cutting no programs. if we got the $21 trillion back that was stolen, okay, we would not be in this mess. that's the issue, really, is it not? >> well, i don't know anything about the -- it couldn't be $22 trillion. billion dollars in dod and hud that has gone missing, i haven't
1:48 pm
seen that figure anywhere. but you know, i'm not knowledgeable on those sorts of things. with respect to medicare fraud, i would point out that over the last decade or so, the justice department, the office of medicare and medicare services has improved greatly going after medicare fraud and medicaid fraud as well, and there have been quite substantial recoveries. these programs are big, they're complicated. we try not to incumber them with lots of regulations and lots of intrusion. so, doctor sends in a bill. the payment is made almost automatically with a computer. it's only later that they go back and check these things.
1:49 pm
and you know, so, there's an advantage to the way we administer these programs, which allows for some fraud, but i think the government is doing an okay job going after this. >> staying on medicare, what impact did the passage of the affordable care act have on these trustee report projections about the depletion date, and has it changed at all from the efforts to roll back parts of the aca? >> well, the second part of the question, the answer is certainly yes. one part of the affordable care act was the creation of a commission, the independent payment commission that sort of served as a safety valve. it was never appointed. but if medicare spending went up at an excessive rate, this
1:50 pm
commission was charged with coming up with ideas that would automatically be put into action if congress allowed that and didn't provide a substitute to moderate the growth. and that commission was abolished by the efforts of the administration and those in congress, among other things. there also was a tax, a new tax that was going to be imposed on very high best subsidized employer plans, and that tax was supposed to go into effect next couple of years and it was pushed off and so revenue that was assumed to come in to the system through that tax is no longer there. so, you know, this is -- these are ways in which the affordable
1:51 pm
care affordable care acted to moderate the growth of overall health care costs which have an impact on the growth of medicare costs. >> mr. reischauer, you have rose in franklin, west virginia. on the line for those who receive benefits. >> yes, thank you. good morning, c-span. >> go ahead, rose. >> i'm on social security now. i was disabled in california 20 years ago and so i've been stumbling along. i went on social security in 2016 and i was subjected to the windfall elimination provision. i'm wonder if you could maybe explain that a little bit better to me and i understand there's legislation that's been attempting to go through over the years because a lot of people have been affected by this and i wonder if you have a status of the legislation on that and if we can hope at all that they are going to repeal that so that we aren't punished
1:52 pm
the way we are being punished by that. >> could i ask the caller if they -- >> rose just hung up. >> they might have been an employee of a state or local government is the question i was going to ask because some of these provisions attempt to, in a very crude way, sort of compensate f the fact that some people snd part of their lives working in a state or local retirement system but also collecting from social security. it's difficult to reconcile the benefit formula for those two programs -- >> let me just add these are people who when they were working for the state or local government or under the federal government under the old system they didn't have to pay money into social security and so they have in effect two pensions a state and local one or a federal one, and social security and how do you match that up. >> right. and so because the social
1:53 pm
securitys system is looking at the person's wage history and not seeing a portion of it they might be a much lower income worker than they were because they are only seeing a part of their earnings history. the bottom line these provisions were established in a crude way to adjust for this. they don't do it perfectly. there have been proposals in congress in recent years to try to do it right now that we have better data to do it with. for reasons that aren't entirely clear to me there was a proposal to do that several years ago so people would get an individual appropriate adjustment to their benefits, not this crude wep adjustment. but it died despite lawmakers attempts to push it forward in the house. >> i would expect if we ever sat down and worked out a compromise for long term solution to this, larger problem, this would be a component of it. >> why can't we sit down and work out a compromise?
1:54 pm
>> because compromise is going to require sacrifice, and nobody wants to have that sacrifice because nobody realize what will happen if we don't make a few notches further into our belt to tighten now and we're faced with more catastrophic response later on. >> what do you think will happen in 2026 when that date hits for medicare? >> you know, in a sense the medicare depletion is an easier political problem, not economic problem, because lawmakers can shift the burden off on to providers, because what medicare is doing is paying bills to providers, or they can do what they've done in the past which is shift some of the expenses
1:55 pm
that are paid out of the hospital insurance fund to the part b and part d program, the supplement medical insurance program and that's funded largely by federal taxes, and by premiums that people pay, so it's a little bit different political situation than it is for social security. >> mr. blahous, do you wish to offer a date when this will get addressed. >> i want to address why we have this problem. it's important for us to understand them. another reason we have this problem is that older generations on these, in these programs got a lot more out of them than they individually contributed which means the system's finances can only be balanced if other generations are having to put a lot more in than they get out and people don't want to do that. people get very upset when they discover righting the system's finances they need to contribute
1:56 pm
more than they receive so they resist attempts to balance the system as a whole and we keep shifting greater and greater income losses to younger generations. the other reason and this is unfortunate, and bob can disassociate him from these remarks if he cares too. there's too much of a political temptation to have an opportunistic approach to these programs. it's very easy to tell people you don't need to make any sacrifices, you deserve everything that's coming to you, the only problem is evil politicians stole this money in the trust funds. these statements are untrue and urban legends. the problem is people were promised much more in benefits than their own contributions can finance. nothing else. it's hard for politicians to tell people that. >> joanne is waiting in san antonio, texas on the line for those who receive benefits. good morning. >> good morning, thank you for receiving my call. i would like to ask mr. blahous a couple of questions.
1:57 pm
i would like to know what happens to the social security that people do not get a chance to draw because they either pass away or even some of the young and old. my husband passed away, he didn't draw his. so where did that money go? and another thing these insurance that you all have with the medicare advantage, they are the ones breaking medicare. they take your case and pay $500 before they start paying anything on your doctor bills or medication or anything. then plus you're paying, at least i'm paying $135 a month that comes out of my social security check for medicare. what happened to that money. my husband didn't draw his. when i asked the lady when i
1:58 pm
retired what happened to his she said nothing. she let me know i couldn't draw any of his because i had my own. >> thanks for the question. this is a very important set of questions the caller has asked because, i think, oftentimes people are under the misimpression that their own personal contributions to social security are being saved in an account somewhere under their name and somehow there's money of theirs that is not -- that they are just drawing back their own money after they contribute. that's not how it works. it's more closely analogous to an insurance fund. you're being insured against living a long life. what happens a lot of people who do live a long time draw a lot more benefits out of the system than they ever put in. people who die earlier put in a lot more in the system than they
1:59 pm
get out. so if someone gets a lot less out of the system becse they pass way earlier, you know, they basically did not reaphe benefit of that insurance value but someone else in the system did. certainly there are issues with medicare advantage with all portions of medicare. one of the reasons medicare rejections took a slightly turn for the worse in near term medicare advantage payments were higher than previous projections. the problems in medicare are no means limited to medicare advantage. the balance is spread throughout the system. they are present in the hospital insurance trust fund. but supplementary medical insurance trust fraud but rapid cost growth in that trust fund that causes increasing pressures on the federal budget. not just one portion of medicare that's stressing the financial strings. >> i can add another wrinkle to all this and that is if you have
2:00 pm
a married couple and they receive different benefits size from their work histories, if the husband, let's say, who had 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. >> to go over those top line numbers again from that trustee's report that came out this week for our visual learners here's a chart showing
2:01 pm
the social security trust fund, excted to be depleted by 2034. at was the projection in the latest rert. here it is for medicare another chart on that, medicare hi trust fund 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 net safety programs for 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. from albany, georgia for those who receive social security. good morning. >> good morning. i've been receiving it since retiring about eight years now. along with a pension and so the combination of those two, of course, create great stability. as it relates to the bipartisan
2:02 pm
policy group, is the group that i read quite a bit with the white papers and it's a very good indication of the 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 set up of social security, we are, in fact, having -- it's in arrears program is that how i one it, mr. blahous that it is in arrears program where you're paying -- you're paying in but then there's a future payment that has to come for you. but to get to the cap, i think that the cap issue is where this debate comes. the medicare advantage where the lady from texas also spoke to the very point that medicare advantage does, in fact, impact
2:03 pm
that bottom line because that is the program that does, in fact, pay out quite a bit and i think it's actually high income. i'm one of those six figures seniors who had careers and we received high maximum social security benefit in addition to like i said having a pension and investments and so the older generation right now are, in fact, the recep current aipient beneficiaries of this stability. we shifted the stability off the young to get in college, to not being able to have housing that we had asset have that we're 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 who are high earners currently can afford to have that cap shifted. >> i would just reiterate, i think what we're hearing on the calls is very consistent with
2:04 pm
what public surveys usually indicate, which is when you survey people as to what should to be done about social security, the idea of raising the cap to which, of which social security taxes are assessed is probably more favorable cited than anything else. having said that, although it's going to be part of the discussion, we just need to be very clear sighted what it's likely to accomplish and what it's not likely to accomplish. if we do in a hiypothetical circumstance lift the cap entirely so we're taxing all the income of the bill gates of the world and jeff bezos of the world, we'll wind up paying a ton of additional benefits to people who don't need them because of this link of contribution to benefits. in order to prevent a very inefficient and really wasteful
2:05 pm
collection of resources that we probably need for, you know, the stability of the program and other needs of the federal government, we would have to change how the benefit formula works so as to not have that effect. so you really can't avoid the question of having to do a substantial portion of it through reforms on the benefit side because just lifting the cap and by the way i would accentuate some of the figures bob indicated and say that even those numbers to an extent exaggerate 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 less an less as that 75 year window goes on and less and less after that. we can buy some time after lifting the cap. we still have most of the problem to solve. we have to be clear sighted about that. >> let me just add one of the reasons why lifting the cap is popular is as i said before,
2:06 pm
would affect only 7% of the figures in america, so the other 93% would be off scott free. raising the payroll tax or the cap puts all of that burden on working generations, and just to make a confession here i'm a social security and medicare recipient have been for a number of years not with standing my boyish looks and, you know, 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 said a pension from some other organization, some assets to spend down, for them to contribute a little in the sense of moderating maybe the growth of our benefits, or making some other kinds of
2:07 pm
adjustments. i think this is a societal problem that all of society should be a part of the solution. >> the caller mentioned that she was a fan of bipartisan policy center which is the group -- >> that's great. >> partnered to discuss this trustee's report. bipartisan is the website if viewers want to check them out. about ten minutes left in our discussion. linda from medina, ohio. good morning. >> good morning. i want to mention first 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? i see it is very popular these people that sell things out of their home, work on the side, perhaps lyft or uber drivers but
2:08 pm
i'm assuming a lot of them don't pay into social security, and is it a definite revenue problem for future recipients? >> linda, thanks for the question. >> that's a very fascinating question because we just had some surprising revisions to the ratio of taxable labor compensation to overall gdp. >> explain that a little bit. >> what it means is relative to the size of our economy there was a smaller tax base for social security and medicare than trustees thought there would be. we don't know why that is. 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's a case and
2:09 pm
certainly we should be trying to find out why that is. if for whatever reason -- >> do you think the gig economy is part of that. >> i have no particular reason to believe it is, but it certainly is the case that we're collecting less payroll tax revenue than we anticipated. >> i think linda really did put an interesting issue here on the table. but i guess i don't spend sleepless nights worrying about this, because if you think of the big players in the gig economy, lyft, uber, airbnb, the way they operate is 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 are reporting these payments to treasury and irs. and so -- >> and social security, is coming out of that. >> and social security. the government knows how much
2:10 pm
they are receiving. and so if they file -- they are required to file income taxes that's a lot different than a gypsy cab or a guy who is selling hot dogs out of a stand on 34th street, operating with cash, not receiving money through the internet from a big company. >> middletown, ohio is next. gary receives both medicare and social security. go ahead. >> yeah. i want to thank you for being here today. look, when you -- 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 getting a tax papers back where they get a refund, and when you give the top five wealthiest 5%
2:11 pm
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 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 payments. i'm not 67 yet. but they put me in this little category and i would just like to ask either gentleman 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 due to my disability i have to pay out almost $400 a month in medical care and i can't even get help
2:12 pm
to pay on my hospital bill on an upcoming surgery where they have to do l4, l5 and s1 surgery. i paid into my maximum benefits. now these other people that are not paying it in and, yes, you do have these under the table companies that don't report and they do not report, i know firsthand because i've heard it from thousands of people. >> thanks for sharing. mr. blahous. >> one of the important elements to the caller's questions and comments it does sound like a very difficult situation. anybody would be challenged to make ends meet and the circumstances that the caller is in. and certainly i agree with the gist of the preface to the caller's comment which is that
2:13 pm
given the vulnerabilities of people in these programs and the necessity of action to strengthen their finances we ought to do 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 other side which is that there's no source of the problems in these programs essentially other than the fact that we're promising far more benefits from them than we are, 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's true. but it doesn't answer the question of how high the benefits should be, and the fact remains that the benefits that the system is promising are much higher than the contributions were put in. so there has to be adjustments
2:14 pm
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. >> most of the problem is really our grandparents and parents when we 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. large baby boom population is contributing and now they are coming into the reception of benefits stage of life, and much of the money that they put in saved them from having to take care of their grandparents and parents financially. >> there's a point bob made before and it's made again. it's that we talk about raising the cap on taxable wages and as bob emphasized that's a way of having people working now in the
2:15 pm
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 line and people who are already being treated the worse in the system are not the older generation but the younger generations. yes you can raise the cap on taxable wages but you are also asking people who are taking big losses to take even bigger ones. >> leah, vero beach, florida. former medicaid worker. >> actually medicare. that's okay. that's okay. one thing 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 never paid into the system. so this presents a huge issue. whenever children -- >> you're talking about disabled
2:16 pm
individuals? >> yes. let me finish. whenever you're talking about children whose parents apply for ssi we're talking about children that have just different issues. whenever they turn 18 they stay on ssi if they are continued disabled for two years. then your state passes them off to the federal government. how many people like that do you think we have on medicare and are getting social security they've not paid in? >> you want to give our guest that chance to respond? >> i don't have the faintest idea. leah stumped me. >> some of the issues she brings up. >> i think that's right. these programs, they pay benefits not only to people who are of retirement age but to their dependents, both social security and medicare have avenues of eligibility for people who are 18, dependent children and so certainly in those instances in both programs
2:17 pm
you don't have a record of wage contributions by people you could 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. >> so talk about your work with bipartisan policy center and about the minute we have left and what you're going to be doing with the trustee's report that came out this week, what more they can find from it. >> 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 press attention was given to the report that i think was very sobering and part of that is because there's a natural tendency to overemphasize the natural depletion dates. we had a very sudden, immediate turn for the worse in the short term financing of these programs and there needs to being a
2:18 pm
greater awareness that, you know -- we sort of repaired the holes in the ships a while ago but it's starting to take on water very fast. >> we want to thank charles blahous and robert reischauer. you can check out their work at bipartisan thanks so much. come back again. >> thank you. live pictures this afternoon from the white house rose garden. today president trump is hosting japanese prime minister shinzo abe. the two held a meeting earlier today and as is typical with visiting heads of state the two are holding a briefing for reporters this afternoon. we are expecting it to get under way shortly here. vice president mike pence arrived just a short time ago and secretary of state mike pompeo also there. so it should start in just a moment. this is live coverage on c-span 3.
2:19 pm
2:20 pm
2:21 pm
2:22 pm
>> ladies and gentlemen, the president of the united states and the prime minister of japan. thank you very much. today i'm greatly h


info Stream Only

Uploaded by TV Archive on