HCS 455 Week 2 Discussion question 2
Description
Hi Class,
An excellent example of regular policy revision is Social Security, one of the policies that is under constant analysis and revision. I want to discuss some perceptions that you will see in the media and explain how the Social Security Trust Fund works. In very basic terms, it is a ‘pay-as-you-go’ program. Current workers are paying for current beneficiaries. In reference to the Trust Fund, that was the excess money built up in the early decades of the program when there were more workers per retiree than there are now. When the media refers to ‘raiding’ the trust fund, what they are referencing is some accounting approaches of either including it or not including it in the budget deficit calculation. The concern now is that there fewer workers per beneficiary, and tie that to the lengthening life span, it is those calculations that come out every spring with a report on how long the SS trust fund will last. Each year the end date is different due to policy changes made by Congress to lengthen its timeline.
Here is a link to the page on the Social Security Web site that shows how this fund has grown over the years – http://www.ssa.gov/oact/ProgData/assets.html. When you see a media story about the trust fund running out of money in a certain year, it is because the projections of income and outgo shifts to more outgo than income as we have an aging population and a decreasing work force.This is why our elected officials spend a lot of time discussing fixes to both Social Security and Medicare.
As you see articles in the news about this issue, please bring a reference to this posting so that we can see how it plays out in the daily media.
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References:
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