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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (2690)	11/3/2007 8:49:08 AM
From: Road Walker	Respond to of 42652

If my understanding is correct it was not until the democrat controlled Congress passed legislation in roughly 1972 that they finally gained the power to spend all of the surplusses generated by Social Security and Medicare. The government could always deficit spend. That's when they passed the "unified budget" (rolling the SS and MC surpluses into the Fed Budget) to hide the deficit spending from the Vietnam war. Still have the unified budget today hiding SS surpluses.

To: Peter Dierks who wrote (2690)	11/3/2007 9:55:37 AM
From: TimF	Read Replies (1) \| Respond to of 42652

Even before 1972 any surpluses would have been "invested" in government bonds, and so the funds would be available to spend. Maybe in 1972 they passed a law increasing the SS tax so that their was such surpluses for the first time. Apparently in 1972 Social Security benefits where increased "This paper examines the consumption response to the 1972 Social Security benefit increase. Nominal benefits were increased by 20 percent while annual cost of living adjustments (COLAs) were contemporaneously implemented and scheduled to begin in less than three years." ideas.repec.org Also changes in how SS numbers where issued happened in 1972 en.wikipedia.org Apparently the increased benefits where passed in the same bill as an increase in the federal debt limit "One of the most important pieces of Social Security legislation was one enacted as a rider to a debt-extension bill. In the summer of 1972 the government was faced with increasing the federal debt limit as the Treasury was about to exhaust its existing borrowing authority. While a House bill to raise the limit was pending the Senate, Senator Frank Church (D-Idaho) introduced a rider with two important provisions: one to provide an immediate 20% increase in benefit amounts, and another to provide for automatic annual Cost-of-Living-Allowances (COLAs) for Social Security benefits. (There was also a second Senate rider, a minor one have to do with flood insurance.) The Church rider authorized annual COLAs starting in 1975, based on the actual computed increase in the cost-of-living. This has turned out to be one of the most important provisions of the Social Security program, one that drives a considerable portion of program costs and that maintains the purchasing power of Social Security benefits." ssa.gov One interesting fact that I didn't know "Following the passage of the 1972 Social Security amendments, it became clear to policymakers that Social Security faced significant financial difficulties and that the 1972 legislation would need to be revisited in the near term. Among other problems was a double-indexing error that, when corrected, would result in the notorious "notch." (See discussion of the Notch issue.)" ssa.gov "Since both productivity increases and inflation naturally increase wage levels over time, new beneficiaries reach retirement age with higher average wage histories than workers with similar careers who retired earlier. Since the Social Security Administration bases benefits on a worker's wage history, these new retirees qualified for higher benefits as a result of this wage growth. But they also realized an increase whenever Congress increased benefits for those already on the rolls in order to offset inflation.(14)" ssa.gov Benefits increased along with wages, then congress was passing increases to keep up with inflation. So many beneficiaries got a double increase.