Obama’s one-term promise fails stress test

February 2nd, 2012 by | Permalink

President Obama's signature on the "Stimulus Legislation". (White House file photo)

“I will be held accountable. You know, I’ve got four years. … A year from now, I think people are gonna see that we’re starting to make some progress, but there’s still gonna be some pain out there. If I don’t this done in three years, then there’s gonna be a one-term proposition.” Barak Obama, Today show, Feb 2, 2009.

President Obama promised that if the stimulus was passed, unemployment would peak at only 8%. It peaked well over 10% nationwide, with many states, counties and metropolitan areas surpassing 26%.

But the drop in unemployment rates are deceiving. Social Security Disability Insurance filings have increased. Food stamp filings have increased. (The Obama Administration has even been rewarding states who process more food stamp applications, sometimes to the tune of $5 million.)

While the President lays claim to the lowering of the unemployment rate, he denies responsibility for the rise in government dependency, as well as the fact that many who are no longer eligible for unemployment benefits yet still have not found work are turning to these programs. Programs which are subjective, to say the least, in determining eligibility.

55% of the determinations for who is eligible for these disability insurance programs are not medical in nature. The strain this is putting on the system, both in terms of deciding eligibility and the payments going out once they are approved, is devastating the available funds of an already drained system.

It has led to at least one officials calling for more funding from the federal Payroll tax to shift more to the SSDI from the “old age” Social Security funds.

“[A] simple tax-rate reallocation between OASI and DI, as wasdone in 1994,” Goss, chief actuary of the Social Security Administration, explained. “[C]ould equalize the financial prospects of the trust funds. We estimate that temporarily raising the Disability Insurance program’s share of the 12.4-percent OASDI payroll tax rate from 1.8 to 2.2 percent for 2012 through 2024 and to 2.0 percent for 2025 through 2029 would make scheduled benefits payable for both OASI and DI beneficiaries until 2036.”

However, Goss admitted that in regards to the population of baby boomers moving into the social security collection range, and the “drop in birth rates after 1965” there will be a “permanent shift in the age distribution of the population with fewer workers to support more elderly retirees.”

Disability baby boomers are already hitting the funds now, Goss said. “the baby boomers already moved from young ages (25-44) in 1990, where few were disabled, to older ages (45-64) in 2010, where many more are disabled. Thus, the 20-year demographic shift in the age-distribution of the population has already occurred for DI.”

However, the Obama Administration seems determined to continue the rhetoric that the drop in unemployment rate is not only validation of their efforts to fix the economy instead of acknowledging the paradigm shift of unemployed survival strategies in this country.

President Obama’s promise to be a one term President seems to not have affected his decision to run for re-election.

 

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