President's 2014 Budget/Medicare and Social Security

posted Apr 10, 2013, 8:57 AM by Frank Baskin   [ updated Nov 18, 2013, 12:26 PM ]
The President is proposing a budget which will impact Medicare and Social Security. Medicare A and B may be combined and Social Security would .be determined ..CLICK TITLE FOR MORE...  on a new formula.
Social Security The Chained CPI would reduce the amount which reciepients receive each year.:For many older Americans, Social Security is their primary source of income.  Based on the sequester, funding for congregate meals and "Meals on Wheels" has been cut.  Should we now cut their Social Security benefits because they are now buying generic corn flakes rather than chicken to prepare for their meals???
 
Social Security benefits are paid from the trust fund created by the FICA taxes paid by workers.  The only impact that Social Security can have on the federal deficit is that the trust funds are invested in government bonds--and obviously if the bonds are redeemed, then the federal deficit would increase.  There is no immediate need to consider redeeming any of these bonds--and if the cap ($113,700 in 2013) on FICA taxes were to be increased or eliminated, there would be no need to consider this in the foreseeable future. The following shows how social security benefits would decrease over time:
Over 5 years, the loss would be 4.9%
Over 10 years, the loss would be 19.6%
Over 15 years, the loss would be 47%
Over 20 years, the loss would be 90.7%
Over 25 years, the loss would be 155%
 
The percentages were calculated by comparing the loss over that period to the base benefit amount(Note - Thanks to Regina Curren for this calculation).
 Medicare - In the President's proposal Medicare A(Hospital and nursing home insurance) and Medicare B(out-patient benefits) premiums would be combined. This would increase the monies beneficiaries have to spend for health care.
 
 
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