Paul Ryan on the Social Security debacle

Quick Links Overview Social Security is Going Broke The Need for Reform The Path to Prosperity Social Security Cost of Living Adjustment Additional Information Social Security provides vital financial support for more than 54 million seniors. Social Security also provides critical benefits to widows and those with disabilities. Unfortunately, Social Security faces a $6.5 trillion deficit over the next 75 years (an amount equal to over one-third the size of the entire U.S. economy).  With 10,000 “Baby Boomers” turning 65 every day, it is essential that we work to preserve the programs these seniors have come to count on.  As Chairman House Budget Committee, one of my top priorities is to preserve the Social Security safety net and make sure the program remains solvent for future generations. Social Security is Going Broke Social Security is funded by the payroll taxes of current workers to pay the benefits of current retirees. Projected long run program costs are not sustainable under current program parameters. The Social Security Trustees project that the cash flow deficits that began in 2010 will continue permanently.  That means that to pay full Social Security benefits, the government must cut spending, raise taxes, or borrow more money to finance pension payments. A central factor in the looming financial crunch is the fact that our society is aging.  The “Baby Boom” generation has already started to collect their Social Security retirement benefits. As a result, there are fewer workers to support each retiree than when Social Security was created. Increasing life expectancy and the approaching retirement of more Baby Boomers continues to put increasing pressure on Social Security each year. Over the next several years, the number of retirees is expected to grow more rapidly than the number of individuals whose taxes will pay for future benefits. Because of this, the number of workers supporting each Social Security recipient is projected to fall from 3.3 today to 2.2 in 2041. When comparing these figures with those from 1950 (when there were 16 workers for every 1 recipient), the challenges of the program become clear. The Need for Reform According to the 2011 Social Security Trustees Report, beneficiaries will face a painful 23 percent benefit cut in 2036 when the Social Security Trust fund is exhausted.  These reductions are expected to grow to 26 percent in 2085.  Even those who are currently on Social Security – those now 62 and older – may experience indiscriminate cuts in benefits at a time when they are increasingly reliant on the program. The Path to Prosperity A common reaction to the question of what to do about the problem with Social Security has unfortunately been, “What problem?” The deniers claim that the Social Security trust fund will remain solvent for another 16 years, at which point the government could theoretically cover the shortfall by raising taxes. Others downplay whether any changes to Social Security will be necessary – they claim that sustained economic growth could take care of the problem all by itself. Neither is correct. First, any value in the balances in the Social Security trust fund is derived from dubious government accounting. The trust fund is not a real savings account. From 1983 to 2011, the trust fund collected more in Social Security taxes than it paid out in Social Security benefits. But the government borrowed all of these surpluses and spent them on other government programs unrelated to Social Security. The trust fund holds Treasury securities, but the ability to redeem these securities is completely dependent on the Treasury’s ability to raise money through taxes or borrowing. Beginning in 2010, Social Security started paying out more in benefits than it collected in taxes – a trend that will skyrocket as the baby boomers continue to retire. In order to pay full benefits, the government must pay back the money it owes Social Security. Those who wish to solve this problem by raising taxes are ignoring the profound economic damage that such a large tax increases would entail. Just lifting the cap on income subject to Social Security taxes, as some have proposed, would, when combined with the Obama administration’s other preferred tax policies, lift the top marginal tax rate to over 60 percent.  In reality, lifting the cap on income subject to Social Security will hurt the self employed – like many of the farmers and small business men and women in the First District – hardest as these individuals pay both the employee and employer share of the Social Security tax and further hamper the economic growth these individuals can provide.   Most economists agree that raising marginal tax rates that high would create a significant drag on economic growth, job creation, productivity and wages. This nation cannot fix its retirement-security system by leaving young families with nothing to save. President Roosevelt himself viewed Social Security as an evolving program. As he wrote in a 1939 message to Congress, “We shall make the most orderly progress if we look upon Social Security as a development toward a goal rather than a finished product. We shall make the most lasting progress if we recognize that Social Security can furnish only a base upon which each one of our citizens may build his individual security through his own individual efforts.” The evolution must continue today, because Social Security’s fragile condition poses a serious problem that threatens to break the broader compact in which workers support the generation preceding them, and earn the support of those who follow. I believe there is a bipartisan path forward on Social Security – one that requires all parties first to acknowledge the fiscal realities of this critical program. The President’s Fiscal Commission made a positive first step by advancing solutions to ensure the solvency of Social Security. While certain details of the Commission’s Social Security proposals, particularly on the tax side, are of debatable merit, the Commission undoubtedly made positive steps forward on bipartisan solutions to strengthen Social Security. The House-passed budget builds upon the Commission’s work, forcing action to solve this pressing problem by requiring the President to put forward specific ideas on fixing Social Security. In a shared call for leadership, the budget also puts the onus on Congress to offer legislation to ensure the sustainable solvency of this critical program. Both parties must work together to chart a path forward on common sense  reforms, and the House-passed budget provides the nation’s leaders with the tools to get there. Social Security Cost of Living Adjustment On October 19, 2011, the Social Security Administration announced that a new Cost-of-Living-Adjustment (COLA) increase will be effective for Social Security checks issued beginning in January 2012.  The Social Security Act provides that the COLA will increase automatically each year, provided that there is an increase in inflation, as measured by the Consumer Price Index (CPI).  This 3.6% increase marks the first COLA since 2009.

Sagicor Life

Sagicor Life has "small face" tradition whole life and Single Premium Whole Life products that are issued standard through "about" table 4.

They are a great company for small life insurance policies in my opinion - disclaimer - I am a general agent for Sagicor.

EMC National Rate Changes 4-1-09

EMC National Life will have a rate change April 1st on Universal Life. Annuities do not change at this time. Call us at 800-658-6737 if you need contracting or have questions.

Interest rates will decrease for April 2009 on new sales of EMC National Life Company's Universal Life product. Interest rates for new sales of all other EMCNL products remain unchanged. A summary of interest rates*, effective April 1, 2009, can be found below:

Universal Life - new rate -ULTRA CHOICE, ELP003 4.15%

Annuities
FPDA, LP9134 4.95% (3.95% base rate + 1.00% first year bonus)

Bonus SPDA 1%, LP215 5.45% (4.45% base rate + 1.00% first year bonus)

Bonus SPDA 1.5%, LP216 5.65% (4.15% base rate + 1.50% first year bonus)

Bonus SPDA 2%, LP202 & LP208 5.75% (3.75% base rate + 2.00% first year bonus)

SPDA 3, LP203 & LP209 3.00%

SPDA 4, LP203 & LP209 3.00%

SPDA 5, LP203 & LP209 3.55%

SPIA, LP198 & LP207 Life contingent: 5.05%, Non-life contingent: 3.85%


* For complete interest rate information, including rate guarantees, go to EMC National
and access the Communique Archive in the Communication
section of the agent site.

Ask about their new worksite products if you are in that market space

Shenandoah Life goes into receivership

Not much good news for Shenandoah - OneAmerica pulled out of take over talks and that prompted the next step - policyholders will be alright but the fate of the agents (and their compensation) is undecided.

We have many alternatives for your clients and are fortunate that we chose not to represent them - they had great products. Call us if you need final expense life, annuities, medicare supplements or long term care for your clients at 800-658-6737

Here's the story...

RICHMOND — The State Corporation Commission (SCC) has been named receiver for henandoah Life Insurance Company by the Circuit Court of the City of Richmond. Both Shenandoah Life and the Commission determined that the receivership was necessary to protect the interests of policyholders and creditors.

Shenandoah Life is a Virginia-domiciled life and health insurer writing primarily life, annuities and dental insurance. The company is headquartered in Roanoke, Virginia and is licensed to do business in 31 states plus the District of Columbia. Shenandoah Life recently experienced financial difficulties because of impairments in its investment portfolio. Shenandoah Life lost approximately $50 million when the value of its equity position in Fannie Mae and Freddie Mac preferred stock was significantly diminished. Virginia Commissioner of Insurance Alfred W. Gross has been appointed deputy receiver in an effort to rehabilitate the company. A moratorium has been placed on the payment of claims and benefits, except for accident & health claims, death claims, and periodic annuity payments, until the deputy receiver completes his evaluation of Shenandoah Life’s financial condition. The company currently will no longer issue new insurance policies. Policyholders with questions about the receivership are encouraged to call the SCC’s Bureau of Insurance. From within Virginia, the toll free number is (800) 552-7945. Callers may also dial direct at (804) 726-2630. Information is also available by calling Shenandoah Life at (540) 985-4400 or from the company’s web site at www.shenlife.com

Case Number INS-2009-00032