Recently released reports reveal truth about troubled entitlement programs; "These systems are not sustainable," Institute for Truth in Accounting founder says
Chicago - Who will write the scariest story this year? Anne Rice? Dean Koontz? Stephen King? Unfortunately, these fiction writers "can't hold a wooden stake to this year's reports from the Social Security and Medicare Trustees," the Institute for Truth In Accounting announced today. The report, which can be viewed at: http://www.ssa.gov/OACT/TRSUM/tr08summary.pdf, outlines the alarming truths about our nation's entitlement programs. "In this new report, the trustees of Social Security and Medicare describe systems that are 'not sustainable,'" said Sheila Weinberg, founder and CEO of the Institute for Truth in Accounting. "The public needs to understand the true financial condition of these systems."
This year, the trustees report warns that:
-Social Security's annual surpluses of income over expenses will begin to decline in just thirty months;
-Medicare's Hospital Insurance fund is projected to pay out more than its tax base provides;
-Medicare and Social Security have trillions of dollars of projected cash shortfalls. To bring Medicare to balance would require an immediate 122% increase in payroll taxes or an immediate 51% benefit cut. Social Security would require an immediate 26% tax increase or an immediate 20% benefit reduction. Both fixes would raise the total payroll tax to a whopping 22%.
"Despite these blunt warnings, our political leaders do not seem willing to face the truth about the systemic problems with our nation's two largest promises to our seniors," Weinberg said. "Our leaders-especially the three presidential candidates-appear content to believe that Social Security and Medicare's 'trust funds' will sustain both programs far into the future."
Unfortunately, the Treasury Department tells us that the term "trust fund" does not have the same meaning in the government as it does in the real world. The Congressional Budget Office points out that "in the public debate, 'solvency' means keeping the trust funds from exhausting their balances. Federal trust funds, however, are merely accounting mechanisms---the balances of the funds are not assets of the government." The Office of Management and Budget confirms this.
"The Institute for Truth in Accounting is concerned that our leaders are confusing the fictional trust funds for true assets available to make good on the programs' promises," Weinberg said. "How can American citizens make decisions about Social Security and Medicare when their leaders do not recognize truthful information? Our country's retirees have already been promised more than $40 trillion in benefits, even though nobody has determined how these promises will be funded. Yet we are told that the trust funds have assets to cover benefits for decades to come."
"To make knowledgeable decisions the public must be given truthful and transparent information, and that starts with the candidates facing reality," Weinberg continued. "They need to recognize that Americans are facing huge financial challenges and tell us, truthfully, what they will do to once they take office."
About the Institute for Truth in Accounting
The Institute for Truth in Accounting (IFTA) is dedicated to promoting honest, accurate, and transparent accounting at all levels of government. As a non-partisan, non-profit organization, the IFTA works to expose accounting deficiencies while promoting better, more accessible delivery of accurate government financial data-and, in turn, providing a foundation for more informed public policy. The IFTA provides its expertise to develop more effective accounting standards and deliver accurate government financial information to policymakers, opinion leaders, and citizens so that they can work for a more secure financial future. To learn more, please visit our website at www.truthin2008.org.