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The Nation's Pulse
Deeper in Debt Than Anyone Knows
Federal law linking Social Security to Medicare only makes it worse — though here’s an opportunity for Republicans.
It’s no secret to anybody who’s been paying attention to budget numbers that the United States, with its current GDP of just under $14 trillion, is sinking deeper into debt by the day, week, and month. However, what’s not generally known is that America’s national debts is actually $52 trillion larger than advertised, thanks to one specific area: Medicaid and Social Security payments owed to those who have already prequalified by paying into the system.
No matter how you look at those numbers, that’s some real money — and that’s just what’s already owed folks who are over 22 and in the workforce or have already retired, all having paid into the system at some point. The program could be ended today, and we the taxpayers would still be left holding a $52 trillion IOU.
Here’s something else you might not know: the federal government skirts around this issue when doing its budgeting by counting Medicare and Social Security as “liabilities,” rather than “debts,” because those who are or will be eligible for returns under the programs have no actual binding or contractual right to those returns. That’s why you hear so much about a “$7 trillion national debt” — that additional $52 trillion is purposely left out of the discussion through the use of clever accounting terminology.
Current and future Medicare costs for those already owed benefits make up over 60% of that liability ($32.3 trillion). Given this, you might think it a good idea to opt out of a Medicare program that probably won’t be solvent enough to cover the costs of your care as a retiree, in favor of a Health Savings Account or some other less costly, more efficient health insurance plan, which you can help pay for with your meager Social Security benefit checks.
Here’s one more thing you might not know: under federal law, that’s not an option. Whether there’s money to fund your Medicare or not, once you’re retired, you’re legally required to accept Medicare as your health coverage. If you try to turn down Medicare Part A and go with another, more cost-effective (and higher quality) form of coverage, you officially forfeit your ability to collect on the Social Security benefits you paid into your entire working life.
Representative Marsha Blackburn (R-TN) has introduced legislation that would change that, cutting the ironclad tie binding Medicare enrollment to Social Security benefit eligibility. H.R. 1118, the “Health Care Choices for Seniors Act,” would cut the cord tying Medicare to Social Security, and would allow seniors the choice (yes, choice in health care — can you imagine that?) of accepting a voucher for a private Health Savings Account or other high-deductible private health plan in lieu of Medicare Part A “benefits,” or of opting out of Medicare altogether, without losing the Social Security benefits they paid into their entire working lives.
The current “penalty of opting out [of Medicare] is severe because you are also forced to opt out of all Social Security benefits,” said Blackburn about the bill.
“Think about that for a moment,” she continued. “Unless you accept government-run health care, you have to forfeit a federal benefit you have paid into for your entire life. For a healthy 65 year old with a robust HSA, this is a galling prospect.”
Blackburn’s “Health Care Choices for Seniors Act” follows in the footsteps of H.R. 7148, Rep. Sam Johnson’s (R-TX) 2008 “Medicare Beneficiary Freedom to Choose Act,” which also would have freed seniors to choose efficient, quality health coverage without losing their Social Security benefits. Unsurprisingly in the Democrat-led 110th Congress, Johnson’s bill never made it out of committee.
With the 111th composed as it is, Blackburn’s is even less likely to see the light of day. With the current emphasis being put, by both Congressional and administration Democrats, on an effort to shoehorn the entire country into a one-size-fits-all, inefficient government-run health care program, it seems a bit much to ask that a commonsense bill that allows people to opt out of one such program would receive the attention and consideration it deserves.
However, in a time when the Democrat-dominated federal government seems set on expanding its scope and power at the expense of citizens’ personal freedom of choice, Blackburn’s proposed legislation should serve as a model for the Republican opposition’s commitment to providing legislative alternatives that embrace the conservative and libertarian ideals of personal freedom, choice, and independence of government control.
Real reform of government spending, management, and health care — not the so-called “reform” being offered by Congressional Democrats and the Obama administration — is what America needs, and is what Americans want. If the GOP can rally behind proposals like Rep. Blackburn’s “Health Care Choices for Seniors Act,” then it will be well on its way to setting the tone for a 2010 election in which it can and will represent real change for America, in the form of a return to personal freedom and choice, and of smaller, more responsible government.
Letter to the Editor View all comments (22) | Leave a comment
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Pingback| 3.24.09 @ 9:27AM
Am. Spectator highlights Blackburn healthcare effort | In Session | Politics & Govern links to this page. Here’s an excerpt:
Franklin's Locke | 3.24.09 @ 9:58AM
Laws like this and so many is why our healthcare costs are skyrocketing. If Medicare was taken out the loop, we would be on the way to reform healthcare. Yes, solid, true reform is what America is starving for. They do want less government and more choices. This alone would drive costs down.
http://franklinslocke.blogspot.com/
Shamus| 3.24.09 @ 1:51PM
Scratch a leftist, find a fascist.
Pete | 3.24.09 @ 2:59PM
jharp, apparently the Evelyn Wood speed-reading course didn't pay off for you. Nowhere in the article was being "uninsured" mentioned as being a viable choice to Medicare--"efficient, quality health care" of a senior's choosing was the given alternative. Numbnut brain.
TmH| 3.24.09 @ 3:43PM
jharp wrote: "God help us with the stupidity of the republican party. "
Yeah, we're witnessing the greatest minds of the Democrats at work a 9.6T deficit in 10 years. Hoorah for the libnut geniuses!
Big Leo| 3.24.09 @ 4:26PM
jharp and Dave Mathews-- are they the same person, or just twins separated at birth?
Rick| 3.24.09 @ 7:41PM
This article states that the national debt is $52 trillion larger than advertised due to Social Security and Medicare. Actually, it's even worse than that! In an article entitled "Storms on the Horizon," dated May 28, 2008, written by Richard W. Fisher, President and CEO of the Federal Reserve Bank of Dallas (you can locate it on the Internet), Mr. Fisher points out that the unfunded liability for Social Security and Medicare is just under $100 trillion (that's a one followed by 14 zeros!): $13.6T for Social Security, $34.4T for Medicare A, $34T for Medicare B, and $17.2% for Medicare D, or $99.2T, or $100T rounded. That comes to $330,000 for every man, woman, and child currently in the U.S. today, or $1.3 million per family of four--over 25 times the average household's income. Those number are impossible! And this article was written before TARP, the AIG and auto bailouts, the "stimulus" plan, the recently passed Omnibus bill, and Obama's pending budget proposal. How can we sustain such high levels of debt? When can we expect the whole house of cards to collapse? What then?
Luonne Dumak| 3.24.09 @ 9:47PM
As a Senior citizen on medicare I would like to put my two cents in. About 5 yrs ago Pres,Bush and the Republicans came up with a plan called Medicare Advantage plan. It gave Seniors a choice especaily for low poor seniors. It corordinates with private insurers. Plans may differ put most are fee for service plans. You pay a copay whenyou go to the Dr., some plans might have a small monthly also. It is great, the paper work is minimal. I just pay my copay when I go to the Dr. I can go to the Dr. of my choice. With regular Medicare when you went to the Dr. they first sent the bill to Medicare they then decided how much they would pay, then the bill was sent to your supplental insure for the rest of the payment. If there was a balance then you paid the rest. This process took forever and there was paper work galore, plus many mistakes. Now the Dems. are planning to take away this help for low income Seniors and given to the S-chip program. This program was supposed to be for low income children, but most of the people on this program are Adults. This is just another step to Socialist Medicine. The last I read there is a billion dollars in fraud in Medicare. Privatizing Medicare would would help limited fraud. I hope that everyone takes the time to read all they can about Universal (death care). The lastest comes from England were they figured 1,200 people died needlessly.
B. Johnson| 3.24.09 @ 10:25PM
I'm glad that Obama is president for the following reason. The constitutionally ignorant people will ultimately be forced to reconnect with the Constitution and its history in order to protect themselves from Socialist Obama's misguided pen.
It's been forgotten that the Founders made the 10th A. to reserve the lion's share of government power to the states, not the Oval Office and Congress. In fact, Chief Justice Marshall had established the following case precedent which appropriately limits the power of the feds to lay taxes.
"Congress is not empowered to tax for those purposes which are within the exclusive province of the States." --Chief Justice Marshall, GIBBONS V. OGDEN (1824) http://supreme.justia.com/us/22/1/case.html
So Obama's constitutionally unauthorized stimulus package can be thought of as the feds returning money to the states that it had stolen from the states anyway.
The bottom line is that citizens need to wise up to the federal government's scandalous usurping of state powers and do the following. The people need to work with their state legislators to repeal the 16th Amendment. That is the amendment that gives the feds the power to tax citizens directly. The problem with that amendment is that it has made it too easy for the corrupt federal government to lay constitutionally unauthorized taxes. So the states need to put the renegade federal government back on its constitutional leash, finding an alternate way to finance the feds.
Again, the 16th A. has to go!
Patrick| 3.24.09 @ 10:35PM
There is neither sanity nor accountability in government today, nor has it existed in many decades. The government will burn through money until it must either default, or hyper-inflate, and then default. As for what happens next, well, it won't be pretty.
Go ahead, invest in gold. I'll be putting my money into lead and brass. At least that's useful.
Alan Brooks| 3.24.09 @ 10:57PM
sobering piece.
very
Martin Hover | 3.25.09 @ 1:57AM
I was unaware that you could not decline Medicare coverage without giving up your Social Security benefits. This is a most horrifying prospect, the most evil thing imaginable, very un-American.
Evelyn Guzman | 3.25.09 @ 8:41AM
I don't understand why you're so down on the Democrats when they are the ones trying to help the common people. Just look at what happened in the last eight years and see what the common people lost. It will take long to get that back but at least this administration is trying its best and needs our help and cooperation in doing so. It will take time and money I know but at least they're trying.
Evelyn Guzman
Debt Challenger
Jimbo| 3.25.09 @ 10:16AM
I agree w/B. Johnson's concept for Constitutional Ammendment, but let's not just limit ammendments to the 16th A. We also need an ammendment for term limits on Senators and Congresspersons, just like thise inposed on the Pres. Our Founding Fathers did not envision Professional politicians who would be in office for life; the only "lifetime" members of our government are the Supreme Court Judges.
The problem is that those numbskulls in Congress have to approve any Amendment; do you think they would vote for any ammendmant like these. What we need is a way to force them to take such action. As Shakespear said, "Ah, there's the rub."
The Constitution opens w/ "We the people, in order to establish..." We need, somehow, to take back our Government and our country. I would think that we would be better off if we played "fruitbasket turnover", and fired the lot of them. Sure, we might loose some good ones, but in MHO, we could not be any worse off with an entirely new Congress!
MDT| 3.25.09 @ 10:21AM
How did we go from a budget surplus to a huge deficit in the last 8 years and 65 days?