Monday, December 27, 2010

On Social Security and Medicare, life will be unfair to -- somebody; Part B premiums rise for "wealthier" benes in 2011 anyway

Robert J. Samuelson has a column on p A15 of the Washington Post, “On fairness dilemma” in print, “On Medicare and Social Security, be unfair to the boomers” today Dec. 27, link here.

He writes “not making cuts would also be unfair to younger generations and the nation’s future. We have a fairness dilemma: Having avoiding these problems for decades, we must now be unfair to someone.”

The gradual raising of Social Security benefit eligibility ages has already been proposed, but he says that quickly (within a few years, as the economy recovers) benefits for wealthier retirees should eventually be cut now. Indeed, admit that FICA is a redistributive tax, not a retirement annuity. He talks about benes paying some of their own Medicare premiums, but we already do that with Part B  ($96.40).

It's actually a bit more complicated than that. In 2011, the standard Part B premium rises to $115.40 (20%). But, Social Security writes "However, there is no Social Security cost-of-living adjustment (COLA) in 2011. So, most people with Medicare already enrolled in Part B in 2010, with income below $85,000 for an individual or $170,000 for married couples, will pay the same premiums in 2011 they are paying in 2010." The presence of accumulated or inherited wealth doesn't seem to matter, just IRS-reported income. (How else could they do it, anyway?) The link is here.

On Dec 19, Samuelson had run a column “Retiree benefits are cheating our children”, about the lack of prefunding for public employee retirement programs.

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