Hospitals & Asylums
Recalculation of the 2014 Annual
Report of the OASDI Trustees HA-20-7-15
By
Anthony J. Sanders
Free Disability
Insurance Reallocation Tax (DIRT) Act:
To
immediately amend the DI tax rate from 1.80% to 2.30%, from 0.90% to 1.15% for
employees and from 0.90% to 1.15% for employers under Sec. 201(b)(1)(S) of the
Social Security Act 42USC(7)II§401 and amend the OASI tax rate from 10.60% to
10.10%, from 5.30% to 5.05% for employees under 26USC(C)(21)(A)§3101 (a) and
from 5.30% to 5.05% for employers under 26USC(C)(21)(A)§3111 (a) to avoid
depletion of the Disability Insurance (DI) Trust Fund in 2016 without
increasing the overall 12.4% OASDI or 15.3% OASDI and Hospital Insurance (HI)
tax-rate under 26USC(A)(2)§1401 beginning October 1, 2015.
To
amend the DI tax rate again in 2018 to 2.20% from 2.30%, from 1.15% to 1.10%
for employees and from 1.15% to 1.10% for employers under Sec. 201(b)(1)(S) of
the Social Security Act 42USC(7)II§401 and amend the OASI tax rate from 10.10%
to 10.20%, from 5.05% to 5.10% for employees under 26USC(C)(21)(A)§3101 (a) and
from 5.05% to 5.10% for employers under 26USC(C)(21)(A)§3111 (a) without
increasing the overall 12.4% OASDI or 15.3% OASDI and Hospital Insurance (HI)
tax-rate under 26USC(A)(2)§1401 to maximize efficiency until a deficit appears
in the OASI Trust Fund in 2019.
Without Income
Limit Law (WILL) Act:
To
abolish the maximum taxable limit on DI contributions on January 1, 2016 and
OASI contributions January 1, 2017 and repeal Adjustment of the contribution
and benefit base Section 230 of the Social Security Act 42USC(7)§430.
To
require the Social Security Administration to pay for SSI Costs beginning
January 1, 2017.
To
share profits in excess of social security program costs to the general fund of
the U.S Treasury on a sliding scale beginning year end 2016 DI 50/50 with the USPS, and OASI 10/90 to eliminate the federal
budget deficit. In 2020 OASI would share
at negotiated rates an estimated 25/75, by 2025 OASDI would share 50/50 and by
2030 OASDI would save to pay for the peak in costs of Baby Boomer generation in
2035 that might raise the overall OASDI tax rate from 12.4%.
Audit:
Two errors have been detected, in OASI Trust Fund Table IV.A.1, and at least
one more is suspected before Table IV.A.3 OASDI. First a uniform rate of interest must be
declared. Second, the high expenditure
figures are misplaced in the low-cost projection. The Actuaries must correct the 2014 Annual
Report before they first redo the DI Trust Fund Table A.2 using Arabic numeral
0 and negative numbers. Second, from a credible
starting date, the Actuary must redo the OASI Trust Fund Table IV A.1 at an
interest rate of their own declaration. Third,
they must recalculate the combined OASDI Trust Fund Table IV A.3. Fourth, the SSA Actuaries must come to agreement
with the 2.3% DI 10.1% rate of taxation until 2018 when it changes to 2.2% DI
and 10.1%, under penalty of having to calculate, for the sake of comparison,
half a dozen “pain in the OASDI tax rates” that take a week to finish, so sit
straight on a soft cushion. Fifth, publish
the legislative proposal before it is inserted into a new first Chapter to the 2015
Annual Report of the Trustees, that presents Congress with both the Free DIRT
Act, that will be in effect as an emergency countermeasure, whether or not
Congress has the mind to edit the FICA tax on paystubs and/or pay the WILL Act and
balance the federal budget before 2020.
DI Trust Fund Balance 2015-2022
|
Year |
Total
Revenue |
Payroll
Tax |
Other
Revenue |
Net
Interest |
Total
Spending |
Net
Increase Year End |
Year
End Balance |
|
2015 |
121.2 |
117.3 |
1.9 |
2.0 |
151.0 |
-29.8 |
28.4 |
|
2016 |
125.8 |
123.8 |
2.0 |
0 |
155.8 |
-30.0 |
-1.6 |
|
2017 |
133.6 |
131.4 |
2.2 |
0 |
161.2 |
-27.6 |
-29.2 |
|
2018 |
141.9 |
139.4 |
2.5 |
0 |
167.1 |
-25.2 |
-54.4 |
|
2019 |
149.7 |
147.0 |
2.7 |
0 |
173.6 |
-23.9 |
-78.3 |
|
2020 |
157.6 |
154.7 |
2.9 |
0 |
180.6 |
-23 |
-101.3 |
|
2021 |
165.5 |
162.4 |
3.1 |
0 |
189.4 |
-23.9 |
-125.2 |
|
2022 |
173.5 |
170.1 |
3.4 |
0 |
198.5 |
-25 |
-150.2 |
Source: Annual Report of the OASDI Trustees 2014 Table
IV.A.2.
To
begin calculating the OASDI tax reallocation DI Table IV.A.2 must be filled
out. The Actuary leaves it to the reader
to add other revenues, meaning the taxation of benefits, contributions from the
General Fund and net interest, to come up with total revenue. Because there are is no interest revenues, insignificant
to nothing contributions from the General Fund are combined with the taxation
of benefits to come up with Other Revenue.
There is no interest after 2015 because the Trust fund will be depleted
under current law. Net Interest is estimated at 3% for DIRT and WILL
projections. Total spending is estimated
using the Actuary’s intermediate projections for the current law. Administrative and Railroad Benefits are
affordable and do not raise any questions.
Net increase at year end is total revenues minus total spending. The total net increase is added to previous
number, or subtracted if that number happens to be negative. At the end of 2015 the DI Trust Fund is
estimated to have a balanced of $28.4 billion, however due to the ongoing
deficit, the trust fund will be depleted sometime in 2016 and at the end of the
year the balance will be -$1.6 billion, in 2017 it will -$29.2 billion and by
2020 it will reach -$101.3. The OASI
Trust Fund could pay the deficit as a reduction in assets at the end of the
year and there would be no DI trust fund, only a payroll tax and some taxation
of benefits for revenues and benefit payments, administration and Railroad
benefits for expenses. This is the
easiest solution, it is sloppy accounting, but not criminally so, because
no-one’s benefits would be unnecessarily cut. SSA Actuaries have previously
always been able to perform the OASDI reallocation math or raise taxes if
necessary. Now we are ready to begin
calculating the optimal OASDI tax rate; using the 2013 Report figures
supporting the Free DIRT Act 2.3% DI and 10.1% OASI was found to be optimal
until 2018 when the optimal rate becomes 2.2% DI and 10.2% OASI.
DI Trust Fund:
Current, Free DIRT and WILL 2015-2022
|
Year |
Total
Rev. |
Payroll
Tax |
Other
Rev. |
Net
Interest |
Gross Cost |
Gross
Increase |
USPS Fed
2020 |
Year
End Balance |
|
2015 |
121.2 |
117.3 |
1.9 |
2.0 |
151.0 |
-29.8 |
0 |
28.4 |
|
2016 |
125.8 |
123.8 |
2.0 |
0 |
155.8 |
-30.0 |
0 |
-1.6 |
|
DIR
2.3 |
161.2 |
158.2 |
2.0 |
1.0 |
155.8 |
5.4 |
0 |
33.8 |
|
WILL |
208.7 |
205.7 |
2.0 |
1.0 |
161.0 |
47.7 |
21.4 |
54.7 |
|
2017 |
133.6 |
131.4 |
2.2 |
0 |
161.2 |
-27.6 |
0 |
-29.2 |
|
DIRT |
171.3 |
167.9 |
2.2 |
1.2 |
161.2 |
10.1 |
0 |
43.9 |
|
WILL |
222.4 |
218.3 |
2.2 |
1.9 |
167.3 |
55.1 |
21.9 |
87.9 |
|
2018
|
141.9 |
139.4 |
2.5 |
0 |
167.1 |
-25.2 |
0 |
-54.4 |
|
DIR
2.2 |
174.4 |
170.3 |
2.5 |
1.5 |
167.1 |
7.3 |
0 |
51.2 |
|
WILL |
226.9 |
221.4 |
2.5 |
3.0 |
173.9 |
53 |
22.3 |
118.6 |
|
2019 |
149.7 |
147.0 |
2.7 |
0 |
173.6 |
-23.9 |
0 |
-78.3 |
|
DIRT |
184 |
179.6 |
2.7 |
1.7 |
173.6 |
10.4 |
0 |
61.6 |
|
WILL |
240.2 |
233.5 |
2.7 |
4.0 |
180.9 |
59.3 |
22.8 |
155.1 |
|
2020 |
157.6 |
154.7 |
2.9 |
0 |
180.6 |
-23 |
0 |
-101.3 |
|
DIRT |
194.1 |
189.1 |
2.9 |
2.1 |
180.6 |
13.5 |
0 |
75.1 |
|
WILL |
254.0 |
245.8 |
2.9 |
5.3 |
188.2 |
65.8 |
32.9 |
188.0 |
|
2021 |
165.5 |
162.4 |
3.1 |
0 |
189.4 |
-23.9 |
0 |
-125.2 |
|
DIRT |
204.2 |
198.5 |
3.1 |
2.6 |
189.4 |
14.8 |
0 |
89.9 |
|
WILL |
267.6 |
258.1 |
3.1 |
6.4 |
197.2 |
70.4 |
35.2 |
223.2 |
|
2022 |
173.5 |
170.1 |
3.4 |
0 |
198.5 |
-25 |
0 |
-150.2 |
|
DIRT |
214.4 |
207.9 |
3.4 |
3.1 |
198.5 |
15.9 |
0 |
105.8 |
|
WILL |
281.3 |
270.3 |
3.4 |
7.6 |
206.3 |
75.0 |
37.5 |
260.7 |
Source: 2014 Annual Report of the OASDI Trustees 2014
Table IV.A.2.
To
calculate the free DIRT estimates for DI is necessary to multiply the taxable
payroll with 2.3/1.8 = 1.278 until 2018 when it becomes 2.2/1.8 = 1.222 and add
other revenues and net interest for the total revenues. Total spending uses the intermediate
projection. The gross increase at end of
year is total revenues minus total spending.
The Year End Balance is the net increase at end of year, (less the
postal service in WILL), plus the previous Year’s End Balance. The WILL is calculated by multiplying the
free DIRT payroll tax revenues by 1.3.
Medicare is estimated to have a taxbase 1.33
times the size of SSA’s because Medicare doesn’t have a maximum taxable limit
and has some other minor sources of taxbase that are
not readily available to SSA. Wherefore,
the estimate of 1.3 times the free DIRT payroll tax is made and total revenues
are recalculated. Not to lose all the people’s money to the federal deficit the
high cost scenario is used in the WILL total spending projections to benefit
the poor, while the intermediate revenue projections continue to be used as a
baseline for revenues, to ensure a conservative estimate. Interest is estimated at 3.4% of the previous
year’s Year-end balance. Revenues from
the DI WILL are expected to be so high that the surplus revenues must be
shared. Therefore, after paying the high
cost projection and sharing with the US Postal Service $20 billion (2014) + 2%
annual growth until 2020, if revenues allow, when the General Fund would share
the surplus 50/50 and pay for USPS. In
deciding on the optimal free DIRT tax rate one must adjust the rate in 2018 to
prevent a deficit in the OASI account.
In the WILL OASI shall become responsible for paying for SSI in
2017. SSI growth should be estimated
highly, because laggard economies grow quickly, at around 5% annual growth from
$70 billion in 2017. The SSI is added to
the high estimate that happens to be in the low-cost future in Table
IV.A.1. The OASI Trust Fund shall share
90% of surplus revenues with the federal government until 2020 when the rate
shall be reviewed, it is estimated at 75% from 2020-2022. The optimal OASDI tax rate will need to be respeculated and there will be a new 1% UN FICA tax on the
agenda in 2020. Before we can swiftly
analyze the combined OASDI accounts in a concise table of total revenues and
total expenditures, it is of course necessary to admire the effects of the free
DIRT and WILL Acts on the largest asset in the world. Interest is estimated at 3.4% of previous
Year-end Balance. OASI high cost
projections and SSI costs are added in the WILL to create Gross Cost. Total revenues are subtracted by gross costs
to give gross increase at end of year.
There is a 90% federal share until 2020 when it will be renegotiated
from this 75% share through 2022. The
Year-end Balance is sum of gross increase year end, less the federal share plus
the previous year’s Year-end Balance.
The free DIRT Act reduces OASI revenues by multiplying current payroll
taxes times 10.1/10.6 - = 0.953 and adding other revenues until 2018 when the
current payroll tax is multiplied by 10.2/10.6 = 0.962.
OASI Trust Fund;
Current, Free Dirt and WILL 2015-2022
|
Year |
Total
Rev. |
Pay- roll
Tax |
Other
Rev. |
Net
Int. |
OASI
Cost |
SSI
Cost |
Gross
Cost |
Gross
Increase |
Federal
Share |
Year
End Balance |
|
2015 |
816.8 |
691.1 |
31 |
94.7 |
758.7 |
0 |
758.7 |
58.1 |
0 |
2,783.7 |
|
2016 |
858.8 |
729.2 |
33.9 |
95.7 |
807.5 |
0 |
807.5 |
51.3 |
0 |
2,835.0 |
|
DIRT |
824.5 |
694.9 |
33.9 |
95.7 |
807.5 |
0 |
807.5 |
17 |
0 |
2,800.7 |
|
WILL |
824.5 |
694.9 |
33.9 |
95.7 |
807.5 |
0 |
807.5 |
17 |
0 |
2,800.7 |
|
2017 |
907.4 |
773.5 |
37.5 |
96.4 |
861.1 |
0 |
861.1 |
46.3 |
0 |
2,881.3 |
|
DIRT |
869.7 |
737.0 |
37.5 |
95.2 |
861.1 |
0 |
861.1 |
8.6 |
0 |
2,809.3 |
|
WILL |
1,090.8 |
958.1 |
37.5 |
95.2 |
880.2 |
70 |
950.2 |
140.6 |
126.5 |
2,814.8 |
|
2018 |
959.6 |
820.7 |
40.9 |
98.0 |
920.5 |
0 |
920.5 |
39.1 |
0 |
2,920.4 |
|
DIRT |
926.1 |
789.7 |
40.9 |
95.5 |
920.5 |
0 |
920.5 |
5.6 |
0 |
2,814.9 |
|
WILL |
1,163.2 |
1,027 |
40.9 |
95.7 |
949.7 |
73.5 |
1,023 |
140.2 |
126.2 |
2,828.8 |
|
2019 |
1,009.8 |
865.8 |
44.7 |
99.3 |
985.1 |
0 |
985.1 |
24.7 |
0 |
2,945.1 |
|
DIRT |
973.5 |
833.1 |
44.7 |
95.7 |
985.1 |
0 |
985.1 |
-11.6 |
0 |
2,803.3 |
|
WILL |
1,223.9 |
1,083 |
44.7 |
96.2 |
1,024 |
77.2 |
1,101 |
122.9 |
110.6 |
2,841.1 |
|
2020 |
1,059.6 |
910.9 |
48.6 |
100.1 |
1,055 |
0 |
1,055 |
4.6 |
0 |
2,949.7 |
|
DIRT |
1,020.4 |
876.5 |
48.6 |
95.3 |
1.055 |
0 |
1,055 |
-34.6 |
0 |
2,768.7 |
|
WILL |
1,284.7 |
1,140 |
48.6 |
96.6 |
1,103 |
81.0 |
1,184 |
100.7 |
50.3 |
2,891.4 |
|
2021 |
1,109.4 |
956.5 |
52.6 |
100.3 |
1,123 |
0 |
1,123 |
-13.6 |
0 |
2,936.1 |
|
DIRT |
1,067.1 |
920.4 |
52.6 |
94.1 |
1,123 |
0 |
1,123 |
-55.9 |
0 |
2,712.8 |
|
WILL |
1,347.4 |
1,196.5 |
52.6 |
98.3 |
1,183 |
85.1 |
1,268 |
79.4 |
39.7 |
2,931.1 |
|
2022 |
1,158.5 |
1,001.8 |
56.9 |
99.8 |
1,197 |
0 |
1,197 |
-38.5 |
0 |
2,897.6 |
|
DIRT |
1.113.1 |
964.0 |
56.9 |
92.2 |
1,197 |
0 |
1,197 |
-83.9 |
0 |
2,628.9 |
|
WILL |
1,409.8 |
1,253.2 |
56.9 |
99.7 |
1,270 |
89.3 |
1,359 |
50.8 |
25.4 |
2,956.5 |
Source: Annual Report of the OASDI Trustees 2014 Table
IV.A.1.
Two
errors have been detected, in OASI Trust Fund Table IV.A.1, and at least one
more is suspected. First, the rate of
interest had to be normalized at the arbitrary net interest rate of 3.4%, thus changing
future total OASI revenues, gross increase and Year-end balance; so as not to
be overly pessimistic about the Free DIRT Act, that
seems to be more accurately projected than that of the 2014 Annual Report. Second, the high expenditure figures are
misplaced in the low-cost projection. Because
they are higher than the intermediate projections these low-cost projections
are used to describe expanded SSA spending under the WILL Act. This is the first time that any hacking has
been detected in the Annual Report of the OASDI Trustees. This is very trying on the mental health of
the analyst swayed by high OASI and feudal DI estimates. Comprehension at the
moment of the publication has so far been at absolute zero, a number that hasn’t
even yet been invested by our non-Palestine Supreme Court compensating Actuary. SSA Actuaries must first redo the DI Trust
Fund Table A.2 using Arabic numeral 0 and negative numbers. Second, from a credible starting date, the
Actuary must redo the OASI Trust Fund Table IV A.1 at an interest rate of their
own declaration. Third, they must
recalculate the combined OASDI Trust Fund Table IV A.3. Fourth, the SSA Actuaries must come to agreement
with the 2.3% DI 10.1% rate of taxation until 2018 when it changes to 2.2% DI
and 10.1%, under penalty of having to calculate, for the sake of comparison,
half a dozen “pain in the OASDI tax rates” that takes a week, so make sure to
sit up straight on a soft cushion. Under the proposed OASI tax rate a deficit
would not appear in the OASI account until 2019. Saving the DI trust fund, at no cost to
taxpayers, by reallocating the FICA, moves the first expected deficit in the
OASI account from 2022 to 2019. Although
the 10.2 OASI 2.2 DI rate seems to be a better expression from 2018 there is no
half a percent that can save both OASI and DI from a deficit in 2019. OASI is
much better able to bear the costs of a deficit than the much smaller DI Trust
Fund.
OASDI Trust Funds;
Current, Free DIRT and WILL 2015-2022
|
OASI |
DI |
OASDI |
||||||
|
Year |
Total
Rev. |
Gross
Cost |
Gross
Increase |
Total
Rev. |
Gross Cost |
Gross
Increase |
Total
Rev. |
Gross
Cost |
Gross
Increase |
|
2015 |
816.8 |
758.7 |
58.1 |
121.2 |
151.0 |
-29.8 |
938.0 |
909.7 |
28.3 |
|
2016 |
858.8 |
807.5 |
51.3 |
125.8 |
155.8 |
-30.0 |
984.6 |
963.3 |
21.3 |
|
DIRT |
824.5 |
807.5 |
17 |
161.2 |
155.8 |
5.4 |
985.7 |
963.3 |
22.4 |
|
WILL |
824.5 |
807.5 |
17 |
208.7 |
161.0 |
47.7 |
1,033.2 |
968.5 |
64.7 |
|
2017 |
907.4 |
861.1 |
46.3 |
133.6 |
161.2 |
-27.6 |
1,041 |
1,022 |
18.7 |
|
DIRT |
869.7 |
861.1 |
8.6 |
171.3 |
161.2 |
10.1 |
1,041 |
1,022 |
18.7 |
|
WILL |
1,090.8 |
950.2 |
140.6 |
222.4 |
167.3 |
55.1 |
1,313.2 |
1,117.5 |
195.7 |
|
2018 |
959.6 |
920.5 |
39.1 |
141.9 |
167.1 |
-25.2 |
1,101.5 |
1,087.6 |
13.9 |
|
DIRT |
926.1 |
920.5 |
5.6 |
174.4 |
167.1 |
7.3 |
1,100.5 |
1,087.6 |
12.9 |
|
WILL |
1,163.2 |
1,023 |
140.2 |
226.9 |
173.9 |
53 |
1,390.1 |
1,196.9 |
193.2 |
|
2019 |
1,009.8 |
985.1 |
24.7 |
149.7 |
173.6 |
-23.9 |
1,159.5 |
1,158.7 |
0.8 |
|
DIRT |
973.5 |
985.1 |
-11.6 |
184 |
173.6 |
10.4 |
1,157.5 |
1,158.7 |
-1.2 |
|
WILL |
1,223.9 |
1,101 |
122.9 |
240.2 |
180.9 |
59.3 |
1,464.1 |
1,281.9 |
182.2 |
|
2020 |
1,059.6 |
1,055 |
4.6 |
157.6 |
180.6 |
-23 |
1,217.2 |
1,235.6 |
-18.4 |
|
DIRT |
1,020.4 |
1,055 |
-34.6 |
194.1 |
180.6 |
13.5 |
1,214.5 |
1,235.6 |
-31.1 |
|
WILL |
1,284.7 |
1,184 |
100.7 |
254.0 |
188.2 |
65.8 |
1,538.7 |
1,372.2 |
166.5 |
|
2021 |
1,109.4 |
1,123 |
-13.6 |
165.5 |
189.4 |
-23.9 |
1,274.9 |
1,312.4 |
-37.5 |
|
DIRT |
1,067.1 |
1,123 |
-55.9 |
204.2 |
189.4 |
14.8 |
1,271.3 |
1,312.4 |
-41.1 |
|
WILL |
1,347.4 |
1,268 |
79.4 |
267.6 |
197.2 |
70.4 |
1,615 |
1,465.2 |
149.8 |
|
2022 |
1,158.5 |
1,197 |
-38.5 |
173.5 |
198.5 |
-25 |
1,332 |
1,395.5 |
-63.5 |
|
DIRT |
1.113.1 |
1,197 |
-83.9 |
214.4 |
198.5 |
15.9 |
1,327.5 |
1,395.5 |
-68 |
|
WILL |
1,409.8 |
1,359 |
50.8 |
281.3 |
206.3 |
75.0 |
1,691.1 |
1,565.3 |
125.8 |
Even
adjusting for a uniform 3.4% rate of interest, OASI net interest defies logic
to make the free DIRT Act look like dirt.
According to this math, keeping the DI trust fund solvent to sustain
interest earnings causes OASDI a slight loss.
The free DIRT Act will cause an OASDI deficit in 2019 instead of 2020 by
a margin of error less than $2 billion.
The OASDI tax reallocation equation will need to be re-addressed in
2020. There must be more scientific ways
to calculate optimal rates other than dire necessity of the disability
beneficiary. Because the OASI Trust Fund
balance is so much larger than the DI Trust Fund balance, the tax rate must be
biased to protect the DI Trust Fund against deficit. Ultimately, everyone agrees that by 2020 we
are going to need to raise the rate of OASDI taxation. Why we haven’t already abolished the maximum
taxable limit on OASDI contributions is probably that it is more than SSA
demands. SSA could expand OASDI and SSI
benefits in support of ILO Holidays with Pay Convention 132 of 1970, Workers
with Family Responsibilities Convention 156 of 1981 and Maternity Protection
Convention 183 of 2000.At this time the projected OASDI surplus from a WILL is
not enough to satisfy official demands regarding the federal deficit. However, it is enough for a disability
beneficiary to sustainably balance the federal budget, if only the Allowances
and Other Defense Civil Programs rows were abolished from OMB Table 4.1;
military spending was limited to less than $500 billion and Health and Human
Services spending to less than $1 trillion, at least until 2020. Agency spending growth, in all other
departments, is limited to no more than 3% annually, aiming for 2% agency
growth that provides 3% income growth.