Bankrupt....or not.

Shame on Dana Milbank! (Washington Post 10/16/07) Unnecessarily inciting panic, based on misinformation, is irresponsible. Social Security is not headed for bankruptcy. It is running a surplus. If no action is taken (such as raising the income subject to the payroll tax), by 2017, the surplus will be spent. Under current law, there will be ample funds replenishing the Trust Fund from payroll and other designated taxes to pay benefits at the current rate until 2027. By 2027, Social Security will begin liquidating its bonds. (Don't tell me the Treasury will honor bonds owned by banks in the US and abroad, but not to pay benefits to its elderly, disabled, and survivors, as required by law.) By 2042, the Trust Fund's reserve will be exhausted, but payroll taxes will continue to pour in to pay Social Security benefits, always designed as a pay-as-you-go program. At that point, benefits will be paid at 75% of the current formula, but those benefits will still be greater than current beneficiaries receive because of rising wages on which benefits are based. Moreover, the American economy will be able to support paying higher benefits.

Medicare is a different matter. Its benefits are unaffordable, not least because we waste $5.2 billion a year pumping tax dollars into private insurance companies, instead sticking with traditional Medicare (the Washington Post's figures, Dec. 1, 2006), and waste another $15 billion under the Medicare Part D program. Medicare should be fixed along with the entire health care system, most economically by enacting a single-payer comprehensive health care program for all Americans.