I’m sure that everyone is aware of, or should be aware of the problems facing the Social Security Administration. For example, here’s an excerpt of the bleak outlook from the 2009 Report issued by the Social Security and Medicare Boards of Trustees. The report points out the obvious problems that have been debated for decades. You may skip this part if you want to get straight to my point below.
A MESSAGE TO THE PUBLIC:
Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. This message summarizes our 2009 Annual Reports.
The financial condition of the Social Security and Medicare programs remains challenging. Projected long run program costs are not sustainable under current program parameters. Social Security's annual surpluses of tax income over expenditures are expected to fall sharply this year and to stay about constant in 2010 because of the economic recession, and to rise only briefly before declining and turning to cash flow deficits beginning in 2016 that grow as the baby boom generation retires. The deficits will be made up by redeeming trust fund assets until reserves are exhausted in 2037, at which point tax income would be sufficient to pay about three fourths of scheduled benefits through 2083. Medicare's financial status is much worse. As was true in 2008, Medicare's Hospital Insurance (HI) Trust Fund is expected to pay out more in hospital benefits and other expenditures this year than it receives in taxes and other dedicated revenues. The difference will be made up by redeeming trust fund assets. Growing annual deficits are projected to exhaust HI reserves in 2017, after which the percentage of scheduled benefits payable from tax income would decline from 81 percent in 2017 to about 50 percent in 2035 and 30 percent in 2080. In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.
The drawdown of Social Security and HI Trust Fund reserves and the general revenue transfers into SMI will result in mounting pressure on the Federal budget. In fact, pressure is already evident. For the third consecutive year, a "Medicare funding warning" is being triggered, signaling that non-dedicated sources of revenues—primarily general revenues—will soon account for more than 45 percent of Medicare's outlays. A Presidential proposal will be needed in response to the latest warning.
The financial challenges facing Social Security and especially Medicare need to be addressed soon. If action is taken sooner rather than later, more options will be available, with more time to phase in changes and for those affected to plan for changes.
The Missing Link
My dilemma may be found in the title of the report itself. To be more specific it is found in the words ‘Social Security and Medicare Boards of Trustees’. Of course my first question is who’s on the board(s)? And my second is who’s supposed to be on the board(s)? Following is another excerpt from the 2009 Report.
Who Are the Trustees? There are six Trustees, four of whom serve by virtue of their positions in the Federal Government: the Secretary of the Treasury, the Secretary of Labor, the Secretary of Health and Human Services, and the commissioner of Social Security. The other two Trustees are public representatives appointed by the President, subject to confirmation by the Senate. The two Public Trustee positions are currently vacant.
So if I am reading this correctly, ‘the other two Trustees are public representatives appointed by the President, and subject to confirmation by the Senate’. And to date, please correct me if I’m wrong, ‘the two Public Trustee positions are currently vacant’. The Board of Trustees is composed of the following four individuals:
- Timothy F. Geithner, Secretary of the Treasury, and Managing Trustee
- Hilda L. Solis, Secretary of Labor, and Trustee
- Kathleen Sebelius, Secretary of Health and Human Services, and Trustee
- Michael J. Astrue, Commissioner of Social Security, and Trustee
One has to go back to the 2007 Report to find the last time that the two public trustee positions were functional. Here’s an excerpt from the 2007 Report:
The other two members, John L. Palmer and Thomas R. Saving, are public representatives initially appointed by President William J. Clinton on October 28, 2000, and reappointed by President George W. Bush on April 18, 2006.
The only other lapse I can find is in 1990. George H. W. Bush was sworn into office on January 20, 1989. The public trustee positions became vacant at the end of 1989, and they were vacant for all of 1990. In 1991, President Bush appointed Stanford G. Ross, and David M. Walker.
Here is a link to a historical listing of the Boards of Trustees:
So what’s my beef?
There is no public oversight over Social Security and Medicare. There has not been any public oversight for the last two years and I don’t see any on the horizon. A public corporation can’t even function properly without outside board members. Without independent, external oversight there's no telling whether we are on the right path, or whether we are even getting the truth.
So 2008 passed without public trustees. Then 2009. Now it’s 2010 and no one is even talking about this? With major issues looming for both Social Security and Medicare, my beef is that the American people deserve to have competent, non-governmental, outside, public trustees on the Social Security and Medicare Boards of Trustees in order to monitor, verify, and criticize the information that is being disseminated. Granted this may not be the most desirable job, both positions need to be filled. That's my beef.
By: Larry Walker Jr