Are you paying attention to the Medicare Trust Fund? What about the Social Security Trust Fund? Do you and your employees understand what FICA and OASI mean on your paycheck stubs? Do you know why they are important to you now and after retirement? As a small-business owner, these questions are critical to you and your business, but why? What impact will it have on your family, your business, and employees?
The future doesn’t seem very bright for traditional entitlement programs. Annual reports, as reported in May, 2011, for both the Social Security and Medicare Trust Funds stated that the Medicare Trust Fund would be depleted by 2024 (five years earlier than estimated in 2010) and the Social Security Trust fund would be exhausted by 2036 (one year earlier than estimated). It’s time for some reform, but who will do it best?
Issue: What are candidates doing to ensure that programs like Social Security and Medicare are sustainable to support American citizens long-term- both Presidential and Congressional? Do your state representatives want more control of programs in their own states or utilize federal assistance?
Impact: How does this affect your business? The success of our economic stability both now and in the future is dependent on employment, job growth and sustainability.
Growth doesn’t seem realistic in the current environment where the Social Security Trust Fund benefits have exceeded revenues in both 2010 and 2011, the first time consecutive deficits have occurred and the first deficit since 1983. Additionally, the Social Security Administration counters this deficit by redeeming U.S. Treasury Bonds, but this quick fix has also had detrimental effects on the national debt now and would continue in the future. Furthermore, Congress “borrowed” from special funds created by excess revenues that are now depleted. While there is currently no immediate concern of the social security fund – with continued benefits exceeding revenues, the normal fund will begin to deplete.
Think of this like your business revenues – it is your goal to create revenue, and enough so that you can build a surplus for times when you lose out on a bid, projects are fewer and you still want to maintain business and your employees. Having a surplus allows you to operate without making major changes, but even when this happens, you still don’t spend the way you would if you were turning people away due to too many jobs. If you didn’t have this fund, you cut spending, maybe jobs, technical offerings, benefits… shouldn’t the same go for the federal budget?
Here’s a great example – the difference might mean saving my social security benefits in the future rather than a few bucks more in my paycheck. The payroll tax cuts set to expire at the end of 2012 have depleted the Social Security Trust Fund by $100 billion dollars. With predictions of these programs becoming extinct as early as 2024 – what future do we have – especially if Congress keeps borrowing from any excess revenue that may be generated?
Knowing the positions of your candidates seeking office is more important than ever. How will they work together to reform the operation of these two programs? Do they even want reform or see that change is needed? President Obama states that both Medicare and Social Security are structurally sound, but some “tweaking” needs to occur. Romney states you have to “look at spending before anything else” – and put control back in the states hands.
It’s time for someone to make a huge impact and protect our future as citizens and as business owners. We need job creation, people working and investing in our future. Just as you want investment into your business – it’s time to invest in our country.