S S Trustees project both "likely insolvency in 2041" and "no problem"

[papau]

One projection having more conservative assumptions (rea; lousy growth in the economy) than the other.

No projection was done by the SS Acturies for the SS Trustee's Report with anything near historical growth, or even growth at the level that is the median level in bad times such as those years when the GOP have the Presidency. All 3 projections are quite conservative. yet one of the three still shows no problem ever.

Still, raising the retirement age for full benefits (Reagan's 67 moving up to 68 by 2030 and to age 70 by 2055) while keeping early retirement at 62 is likely to be a part of any restructing of the finances of SS - if such is passed. It will also have to include the wage base going to $220,000 immediately and thereafter following the increase in the Erisa covered wages level increase. But that will only happen if we take back Congress.


http://news.yahoo.com/s/ap/20061002/ap_on_el_ge/social_security_politics

By WILL LESTER, Associated Press Writer

WASHINGTON - Social Security has drifted out of the national debate, but Democrats, eyeing the senior vote, are trying to revive the issue — just in time for the midterm elections.<SNIP>

Politicians from both parties acknowledge Social Security is likely to face insolvency in future years as the population ages, although they don't agree on the solutions.

Overhauling the landmark New Deal program to aid seniors was President Bush's postelection goal in 2004. His proposal called for allowing workers under age 55 to divert some Social Security taxes into personal accounts in exchange for lower guaranteed benefits.<SNIP>

And Republicans have made clear they're not giving up on changing the program.

In June, Bush said in a speech that he remains determined to make changes in the Social Security system, as well as other federal programs like Medicare. "If we can't get it done this year, I'm going to try next year," he promised.

House Majority Leader John Boehner, R-Ohio, has said in interviews that he wants to bring up Social Security again next year.

And Rep. Jim McCrery (news, bio, voting record), R-La., who heads a House Ways and Means panel dealing with Social Security, has promised to "come up with a Social Security plan that we can all embrace — Republicans and Democrats."
<SNIP>

[bemildred]

1. When Congress pretends to think 35 years ahead,

you know there is something else going on.

[dem91203]

2. Some Social Security History ( Or why the RNC is destroying the Social Security Administration )

If one looks at the early days of the Social Security Administration the motivations of todays RNC /Cato/Heritage Alliance should be self evident. FDR's creation the Social Security Administration was under fire from the RNC of the 1930's from the legislation's introduction into the congress to its enactment into law. Each step was a battle against the RNC .

CRS Legislative Histories

• 
  

  P.L. 271-74th Congress, Enactment
  of the Social Security Act

  
  
  
  

  The Social Security Act became law on August 14, 1935, when President
  Roosevelt signed H.R. 7260. Title II of the Act created a compulsory national
  old-age benefits program, covering nearly all workers in commerce and
  industry and providing monthly pensions at age 65 for insured workers.
  A benefit weighted toward lower-paid workers was to be based on cumulative
  wages and was to be payable beginning in 1942 to persons aged 65 and over
  who had paid Social Security taxes for at least 5 years. The benefit was
  to be withheld from an otherwise qualified person in any month in which
  he or she did any work. Under Title VIII of the Act, a payroll tax of
  1%, each, on employees and employers, payable on earnings up to $3,000
  each year, was to be imposed as of January 1, 1937, on covered jobs, and
  was scheduled to rise in steps to 3% by 1949 ^{P.L. 271-74th Congress.}

This is what FDR wanted IF the above had been left in the legislation and the tax increases had been enacted as prescribed there would have been no potential problems today. The Social Security system would have been a "prepaid system" with a huge reserve earning interest at a unbelievable rate. But the RNC and some stupid Democrats .

• 
  

  C. Payroll Tax Freeze, 1942-1947

  
  

  Between 1942 and 1947, the Social Security payroll tax rate increase
  was postponed seven times. It was not until 1950 that the 1% Social Security
  tax rate was allowed to rise to 1.5%.

  
  

  1. The Revenue Act of 1942, P.L. 753 (H.R. 7378, 77th Congress) was signed
  by President Roosevelt on October 21, 1942. It provided that for calendar
  year 1943, the payroll tax rate for old-age and survivors benefits would
  be frozen at the existing rate of 1% for employees and employers, each,
  instead of being increased to 2% on each as otherwise would have been
  required.

  
  

  2. P.L. 211, (H.J. Res. 171, 78th Congress), a joint resolution regarding
  the Tariff Act, signed by President Roosevelt on December 22, 1943, froze
  the payroll tax at the 1% rate until March 1, 1944. The purpose of the
  resolution was to give Congress time to consider the scheduled payroll
  tax increase before it went into effect.

  
  

  3. The Revenue Act of 1943, P.L. 235 (H.R. 3687, 78th Congress), was
  vetoed by President Roosevelt on February 22, 1944; the veto was overridden
  by the House on February 24, 1944 and by the Senate on February 25, 1944.
  The bill deferred the scheduled payroll tax increase (from 1 to 2%) until
  1945……..
  ……
  

  Although Senator Vandenberg (R-MI) was the main spokesman for postponing
  the payroll tax increases, the legislative effort to defer tax increases
  was bipartisan. "Without regard to party or ideology, elected representatives
  of the people were not willing to argue for increases in an earmarked
  tax if a current need for them could not be demonstrated," one scholar
  has observed.⁽⁴⁹⁾

  
  
  

The afore mentioned fun and games from the 78^th congress is what created the last two funding short fall scares. A chart of the tax increases since that debauchery. looks like this .

The Bush Con Job

The SADISTIC NE-CON EVANGELICAL ACTIVISTS bag of tricks is deep and ripe with a diverse array of deceptions as one can present to the U. S. electorate and still maintain a semblance of credibility.

The tell tale signs of a Boondoggle began to show in the Communicating Social Security Reform Pdf By The House Republican Conference Chairman Deborah Pryce, January 2005. This document let the cat out of the bag. Now every body knew that the RNC / Cato/Heritage Alliance is willing to say any thing to accomplish their goal of destroying The Social Security Administration.

If one reads the actuarial economic assumptions of the " Intermediate" model the attempted con job becomes apparent. Table V.B2--Additional Economic Factors Calendar Years 2005-80 Intermediate Assumptions depicts a long period ( from 2014 to 2080 ) during this period the Real GDP drops below 2% and is frozen at 1.8% for 35 years???? After spending 16 years stuck 1.9%??? Is some one cooking the books or is the RNC / Cato/Heritage Alliance predicting the mother of all recessions? This outrageous assumption along with other strange depictions of economic reality were used to produce the fabled " Three Outcomes Chart"

From The SSA Condition Report

So says the Social Security Administration actuaries in their LTAM ( Long Term Actuarial Model ). This model is a "deterministic" model that is loaded with the economic assumptions selected by the actuaries at the Social Security Administration .

Then came OCACT Stochastic Model (OSM, Version 2004.1) The new stochastic model of the Social Security Trust funds. This model does not use "fixed" pre determined values of it's economic assumptions instead the value of each assumption is stepped through a range of values. The range of the values is based on a probability distribution about a known point or value ( historical value ). The computation involves trend line analysis as an input to the predictions. In many ways this system mirrors the LTAM model but differs in one very important way, this system follows TRENDS. If the economy has been improving over the last few years OSM will reflect this if the economy is taking a nose dive over the past few years OSM will reflect this automatically.

This is a block diagram of the OSM Social Security Trust fund model

The required computations to obtain the Social Security Trust fund balances remain the same . here is a sample of OSM output.

From http://www.cbo.gov/showdoc.cfm?index=6064&sequence=0

As one may note the Social Security Trust fund goes to zero about 2055. As can be seen in the well known three out comes chart the year of Social Security Trust should be 2041.

"

This is the latest projection from the chief actuary in recent testimony before congress.

What we have here is OSM LTAM divergence . The reason for this divergence is simple. OSM is self adjusting as the economic conditions change so will the assumptions in the OSM model. The Bush Administration has demanded that the last group of out side actuaries be held over to continue the effort of privatization effort. These same people LOWERED the assumed interest rate for the Social Security Administration Trust assets in an environment of rising interest rates this kept the year of LTAM's Social Security Administration trust exhaustion fixed at 2041 where they want it. This is what passes for actuarial science in the Bush Administration .