Fact Check: Paying in to Entitlements
The President just told the AARP that seniors pay in to Social Security and Medicare. The problem is, that claim is half true. While individuals obviously do pay in to the Social Security and Medicare programs, most beneficiaries receive more in benefits than they paid in in taxes. An Urban Institute study about the entitlement benefits and taxes recipients will receive (and pay) over their lifetimes found that a senior with average wages retiring this year will have paid $58,000 in Medicare taxes – but will receive over $167,000 in Medicare benefits. The Associated Press ran a story on this issue in December 2010, and its headline was clear: “What You Pay for Medicare Won’t Cover Your Costs.”
Our nation’s entitlement programs are in dire need of reform, to become more sustainable. Perpetuating myths about their long-term viability, which the President’s comments imply by saying individuals fully-fund their benefits when paying into the system, only makes generating the political consensus necessary for true entitlement reform more difficult.