Last Saturday, as a Fox News Alert swooshed across the screen, the big news was not the release of American prisoners in Iran (that was reserved for the small print in the news ticker) but Republican candidates sounding off about the national debt.
Host Gerri Willis opened the discussion by “asking,” If candidate Chris Christie was “right,” that “entitlement spending is a major problem that needs to be addressed.”
Of course, the nearly all-conservative panel thought so
Panelist Gary B. Smith suggested we’re all going to die if we don’t cut Social Security and Medicare.
SMITH: When they write the history of the United States, it won't be asteroids that did us in, climate change, Iran, Obama. It'll be entitlements. Two facts, Social Security Trust Fund goes bankrupt in 2034. Medicare Trust Fund is exhausted in 2030. That's all you really need to know. We're going to be paying it on the backs of taxes which are going to skyrocket, that’ll mark the end.
This is scare mongering of the worst sort. As CBS News explained (but nobody on this show did), Social Security is very unlikely to go bankrupt ever, “as long as democracy reigns.” Medicare is not only not bankrupt but the Affordable Care Act (ObamaCare) has substantially improved the program’s finances.
Instead of offering any challenge or pushback, host Gerri Willis gave Smith a thumbs up: "Don't know if I like your odds on Sixth Avenue, but I appreciate the honesty," she said.
Watch it below, from the January 16 Bulls & Bears.
Currently, the SocSec withholding cuts off at $118,500 a year at 6.2% for the employee (employer covers 6.2% as well) so a person who makes $200,000 a year is paying exactly the same as someone who makes $120,000 a year for Social Security. Medicare withholding has no maximum but it only takes 1.45% from the employee.
So, a person with a $50,000 salary has $3100 withheld for SocSec and $725 for Medicare. A person with a $118,500 salary has $7347 withheld for SocSec and $1718 withheld for Medicare. A person with a $200,000 salary has $7347 withheld for SocSec and $2900 withheld for Medicare. (A person would have to make more than $507,000 a year for the Medicare withholding to outdo SocSec—at that level, chances are pretty good you’re either self-employed or you’re living on a trust fund, and, in either case, you’re probably paying even more because you cover both the “employer” and “employee” contributions. But, if you’re paying as self-employed, you also get to deduct some of the withholding.)
So. Let’s increase the Social Security withholding to cover ALL earnings.