Yesterday, Henry Paulson, Secretary of the Treasury, gave some grim news about Social Security and Medicare. If left unchanged, by 2041, Social Security will only be able to pay out 78% of benefits, unless the government begins paying back what it owes to the fund. In order for the program to be fully funded and paying out 100% of benefits, they estimate that they would need to increase the payroll tax rate from 12.4% to 14.1%.
Medicare is even worse. At the current rate, it’ll go bust by 2019, in eleven years! The cost to fix? Increase the payroll tax from 2.9% to 6.44%.
Source: CNN Money
One response to “Grim Social Security & Medicare Outlook”
The government will probably never pay back those funds. They’ll make us pay for their fiscal recklessness, and what’s worse, we’ll allow them to do it. Everybody screams loud enough to make them listen when they even think of taking away benefits, but nobody screams from statements like “unless the government begins paying back what it owes to the fund”… A law needs to be added that prohibits use of this money for anything except Social Security and Medicare benefits. If government isn’t denied use of this money, we’ll be back in the same sinking boat.