WASHINGTON, DC, July 18 - There was pretty scary news this week for people expecting to receive Social Security checks in less than 16 years from now: the Trust Fund won’t have the funds to make payouts starting in 2030, according to the Congressional Budget Office.
“If things don’t change, the spendthrifts in Washington will blow through the $2.8 trillion balance in the Fund. We’ve been warned about that prospect before, but it appears the clock is ticking faster than anybody thought. It seems the economic recovery is slower than expected and new jobs are being created at a snail’s pace. Meanwhile, health care costs are rising faster despite promises that Obamacare would reduce medical bills. In addition, the healthcare law, itself, is having an unexpected negative impact,” Dan Weber, president of the Association of Mature American Citizens, said.
President Obama’s own CBO described the situation this way: “health insurance purchased through the exchanges created under the Affordable Care Act-would rise sharply, to a total of 14 percent of GDP by 2039, twice the 7 percent average seen over the past 40 years. That boost in spending is expected to occur because of the aging of the population, growth in per capita spending on health care, and an expansion of federal health care programs.”
According to a report by Investor’s Business Daily, the CBO “explained that the Affordable Care Act’s subsidy structure - subsidies fall as income rises - makes work ‘less attractive.’ Further, some people who earn right around 400% of the poverty level - the cutoff for subsidies - will have an incentive to earn less. This will be especially true for older workers who will pay up to three times as much as young workers for similar coverage via the ObamaCare exchanges.”
Lower earnings reduce the Social Security Tax base at a time when the population is growing older and the number of benefit recipients is increasing rapidly.