Nancy Pelosi: Medicare is our solemn pledge, a pledge of stability for our seniors. They paid into the system and we want them to get everything they deserve out of it. What we are promising with our new legislation is the following: better benefits, closing the doughnut hole and lowering drug costs, ensuring free preventive care and better primary care. Number 1 is better benefits. Number 2 is guaranteed access to your doctors for our seniors. Eliminating the 21% pay cut your doctor was facing for Medicare reimbursements, ensuring that these doctors will be able to care for our seniors, especially in rural areas. And third, extended financial stability of Medicare.

Extending the solvency of Medicare trust fund for 5 years. Cutting waste, fraud and abuse in Medicare, and re-investing those savings in benefit improvements. And focusing healthcare dollars on care and benefits, instead of overpayments to private insurance companies.

John Dingell: This is the gavel I used when I presided over the House when we passed Medicare in 1965. I want to reintroduce some of the comments that my Republican colleagues were making when I was sitting up in the chair using this gavel. Here is what Carl Curtis, senator from Nebraska, said about Medicare: “It is not needed, it is socialism. It moves the country in a direction which is not good for anyone, whether they’re young or old. It charts a course from which there will be no turning back. It is not only socialism, it is brazen socialism.” Sounds a little like what they’re saying about the health bill that we’re pushing.

Barbara B. Kennelly: I stand here as a senior, absolutely appalled at what I’ve heard all summer. Absolutely appalled. Max Richmond, my vice-president is somewhere here. We have gone around the country and done townhall meetings with members of Congress. And I hear things that are absolutely wrong, and all that din and all that noise doesn’t tell what Speaker Pelosi’s bill does. And so that’s why I am here today, to make sure that seniors understand what is going on right now. And you know, here is the big problem. Seniors think, and they’ve been told, if we don’t have healthcare reform that they can have the status quo. Well, they can’t. Because healthcare costs are increasing. We all know about how much all healthcare costs are increasing.

Martin Heinrich: We know, as you’ve heard before today, that the status quo is unsustainable. American seniors included simply can’t afford to keep paying the rising costs of health insurance, and our seniors shouldn’t have to choose between necessary prescription drugs and paying their utility bills. The house bill does a great deal for seniors. It weighs deductibles and co-pays for preventative care. It improves quality and lowers costs, extending the solvency of the Medicare program, and cracks down on unscrupulous companies who would take advantage of our seniors. Significantly, the bill will reduce and eventually eliminate the prescription drug doughnut hole. There is no issue that I hear more about from my seniors than closing the doughnut hole in Medicare Part D.

Gerry Johnston: I’m Gerry Johnston, and I’m a causality of a medicare doughnut hole. Last year, as I was refilling a prescription, I was told that I owed a hundred dollars. I thought, “They must be mistaken”, since I had been asked to pay that much before. But no, I was told I was in the doughnut hole and if I wanted to get my pain relief for my back, I would have to pay the $100. It was a terrible surprise because I didn’t have room in my budget to pay for the medicine that allows me to manage my chronic back pain. I was torn between going without the prescription and coping with the pain of putting the charge on my credit card, and hoping I could work out something later. I’m glad to be here today to speak for the millions of seniors who understand that we can’t reform Medicare and solve the doughnut hole problem unless we address the healthcare reform bill overall. Most seniors are on fixed incomes, as myself, and don’t have a lot of options when it comes to paying their rising health costs bills. We need reform now. Thank you so much.

Hi, this is Don Jorgensen again with MySocialSecurityAttorney.com and this… today’s topic is going to be Social Security Disability Benefits, SSDI vs. SSI, what’s best for me?

Now, in order to understand Social Security, or SSI vs. SSDI, let me take a step back. Social Security, everyone knows or most people know about Social Security retirement. What most people don’t know is that there’s a whole other area of Social Security which is for disability. It’s a safety net for society and that safety net is broken up into two different parts. One is SSI Disability and one is Social Security Disability Insurance benefits.

Now, what’s the difference? From a disability standpoint, they’re exactly the same. In other words, the proof required for SSI is the same as SSDI, but the non-medical proof is what they’re different or where they differ.

Let’s start with SSDI or Social Security Disability Insurance benefits. Now, again, we’re not talking about the medical proof, we’ll talk about it in a minute. It’s the non-medical proof that we’re talking about.

SSDI, if you as an employee have been working fulltime for five out of the last 10 years, then your employer has been paying into the Social Security for you and what’s been happening is you’ve been purchasing essentially an insurance policy in the event you become disabled, and now that you’re disabled, now that you can’t work, that’s when that insurance policy is due and you can collect on it.

Here’s the catch, once you stop working, your insurance policy only continues for five years. Once that five years is up, you no longer are insured.

SSDI offers monthly income based on how much money you paid into the system. It could be anywhere from a couple of hundred dollars all the way up to, you know, more than $2,000 depending on how much you’re paying over the last, you know, five to ten years of your career.

You also can be eligible for Medicare. Now, with Medicare, you have to be found disabled for two years before you would receive the medical insurance portion of SSDI. Other than that, you know, those are the main things you receive, the monthly income and the medical insurance. But if you’re like most people, what you really want is good medical insurance and enough money to survive each month. That’s what SSDI will offer you. So if you’ve paid into this system, then you would qualify non-medically.

Now, step away from that for a minute. What is SSI? SSI stands for Supplemental Security Income. It’s just that, it’s a supplement and so if you have income coming in from somewhere else, then the amount of money SSI pays would be an offset, in other words, you would receive that much less from SSI. So let’s just say, for example, you’re receiving child support of $500 a month, well, that would be $500 less per month you’ll receive in the event you’ll receive SSI because it’s a supplement.

Okay, but how do you qualify for SSI? For SSI, it’s a need-based program and if you have no income or very little income and your assets, your wealth is less than $2,000 for an individual or, if you’re married, less than $3,000, then you probably qualify for SSI benefits on a non-medical.

So what’s better for you, SSI or SSDI? Well, when you go down to Social Security Administration to apply, if you qualify for SSDI, then they’re going to apply you… they’re going to do an application for SSDI. If you qualify for SSI, they’ll give you an application for that. If you qualify for both, they’re going to apply you for both.

So you don’t really have to make that determination, but the problem comes when you have assets and you have maybe a little bit of income and you make your application, then the person with Social Security will only apply you for SSDI, but then if your situation changes while you’re waiting for the decision and now you have no income, you’ve sold everything, then now you would qualify for SSI if you applied.

If your situation changes, in other words, then you need to make sure and go down to Social Security Administration and make sure they have an SSI claim pending for you also and you can have both claims going at the same time. You can have one denied and one approved, that’s not uncommon, but the big difference is with SSDI, you’ll receive monthly income based on the amount of money you put into the system and after two years of being disabled, you’ll receive Medicare.

Now, SSI, you’ll receive your monthly income and Medi-Cal, which is California’s version of Medicaid. Now, if you’re living outside of California, then if you’re receiving SSDI, you would receive your monthly income and Medicare, but if you’re SSI, you’ll receive your monthly income and Medicaid.

I know there’s little distinction, but California does some of its own programs, but those are the big differences with SSI vs. SSDI. If you have any further questions, please visit our website at www.mysocialsecurityattorney.com or you can look at the side information panel, you can get our website and our phone number. We’re happy to answer any questions and that we’re here for you. We really do want to help you directly or indirectly.

Barack Obama: “We can extend the promise of Social Security without shifting the burden on seniors. I think that’s why the best way forward is to first look to adjust the cap on the payroll tax, so that people like me, because I am earning more than $102,000, pay a little bit more and people in need are protected.

And by the way, I think that we should exempt anyone making under $250,000 from this increase. So it will not burden the middle class. 97% of Americans will see absolutely no change in their taxes under my proposal. 97%. What it does allow us to do is to extend the life of Social Security without cutting benefits or raising the retirement age.

Even if we keep Social Security strong for future generations, it’s not enough to help seniors who are struggling with the cost of everything from gas to groceries, because we know that rising costs are hardest for folks on fixed incomes. That’s why I want to make retirement more secure by eliminating the income tax for retirees who are making less than $50,000 a year. This would completely eliminate income taxes for 7 million seniors.

If a company goes bankrupt workers should be a top priority and not just an afterthought. So as President, I’ll limit the circumstances when retirement benefits can be cut and increase the wages and benefits that workers can claim in bankruptcy court. We’ll require companies to disclose their pension fund investments. We’ll put an end to the outrage of executives getting bonuses while workers watch pensions disappear, and we’ll make sure that no American goes bankrupt just because they get sick.

75 million working Americans today don’t have the employer-based retirement plans that the previous generation counted on. And that’s why I’ve proposed an automatic workplace pension. There’s going to be no red tape or complicated forms. Employers will provide a direct deposit of a small percentage of each paycheck into your account. You can add to it or you can opt out of it at any time.

Medicare is not allowed to negotiate. That makes no sense, that’s why some people are getting hit with this doughnut hole where after a certain amount of medication they suddenly have to pay out of their pocket. That’s not fair to seniors, it’s made a lot of profits for drug companies. We’re going to change it when I am President of the United States.”

Senator John Cornyn: “While we know we’ve been spending in Congress at an unprecedented pace and have a deficit of $1.8 trillion, as bad as that is, that’s not the whole story. What we’ve heard from the trustees of Medicare and Social Security is that Medicare will basically be out of cash by year 2017 and we know that there are $67 trillion in unfunded liabilities. That’s why I believe we need to roll up our sleeves and get to work and reform Medicare and Social Security, so we can keep the promise we made to seniors that it would be there and be financially viable when they retire.”

News Anchor: Joining us now with her reaction is Barbara Kennelly, the President and CEO of the National Committee to Preserve Social Security and Medicare. She is a former Congresswoman from Connecticut who is a ranking member of the Social Security sub-committee and a former counselor to the Social Security Administration.

Miss Kennelly, welcome to Bloomberg news, and Lindsey’s report painting a very dire picture. The trustees saying that Social Security fund would be depleted by 2037.

Barbara Kennelly: Well Earl, first of all, all this reporting on Social Security is dire. The fact of the matter is that last year the trustees said that Social Security could pay full benefits to 2041. Now they’re saying 2037. Would you notice that that’s three decades away? The whole program has been planned for the long term to have these kind of economic cycles going up and down. In the 1990s Social Security could only pay up to 2000 say. But no, Social Security is not going bankrupt. Social Security has a surplus. It can pay full funding till 2037, that’s what the trustees are going to tell you. And then after that…

News Anchor: Where is the disconnect between what you’re saying and some of the things that Lindsey was telling us over in that report?

Barbara Kennelly: Well, Lindsey is reporting as people report and say, “Hey, the number went from 2041 down to 2037″. And yeah, that is a drop and are we surprised? No, we have a recession. Are we surprised that tens of thousands people have been laid off and are not paying into the payroll tax. But the Social Security program has been designed specifically to have these economic going up and going down. I was on the committee in 1983 the last time we reformed it. We raised the payroll tax, we raised the age because we knew the baby boomers were coming.

So no, Social Security is not going bankrupt. Do we have a problem right now? We have a fiscal problem. We’ve got a deficit problem. We don’t have a Social Security problem because we have that surplus. Think of the good years we had in 2005, 2006, 2007, 2008. So much more money was coming in to Social Security from payroll taxes than was going out. That built up the surplus. So that’s the base we have right now. That’s why we can go up to 2037 and say Social Security can still pay its benefits.

News Anchor: Are you saying that Social Security is not in need of reform?

Barbara Kennelly: Oh no, I’m not. And you said that at the beginning of the program, no. When you said that Social Security can only pay full benefits till 2037, of course we can address those out years. But don’t forget hundreds of thousands of people are working, paying in. People act like everything stops. No, there’s all sorts of ways that you can take a little here, a little there and you should do it now rather than later so people can plan out for their futures. No, I think Social Security should be reformed, but I don’t think is Social Security should be used as a scapegoat; that now we have all these problems in the economy, “okay, let’s cut benefits, let’s raise the age”. That’s not the right way to go.

News Anchor: Well, the same question I guess applies to Medicare. What type of reforms might be needed for Medicare?

Barbara Kennelly: Oh, let me tell you something. You’re not going to get me to defend Medicare the way I am defending Social Security. Medicare has serious problems because there are serious problems in our healthcare system and if Barack Obama reforms the health care system, Medicare will do good…

News Anchor: Miss Kennelly, I’m sorry to cut you off, but treasury secretary Tim Geitner is speaking right now from Washington, let’s go to that live here on Bloomberg television.

Tim Geithner: … of the chief actuaries, Steven Godson, Richard Foster and the whole hard work of their staffs. Through generations, tens of millions of Americans have been able to count on Social Security and Medicare as guarantees that they will be able to live out their senior years in economic dignity and with health security. This year’s trustee reports once again remind us that the longer we wait to address the long term solvency in Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be. The sooner we come together to make the difficult but achievable changes needed to strengthen the solvency in Medicare and Social Security, the more time we will give the American people to plan and to adjust and the sooner we’ll be able to ensure that these vital programs will be as important for generations to come as they are today.

That’s why even as this President has focused on pulling our nation out of recession, he has made clear his commitment to work in a bipartisan way to address the long term health of Medicare and Social Security. Reestablishing fiscal sustainability, fiscal responsibility, as well as the strength of these two vital programs is essential to the economic and health security of our country. The Medicare trustees report makes clear today that there is no more important long term fiscal policy measure than gaining control of the growth of Medicare costs by delivering health care services more efficiently. These savings can only be achieved in the context of a larger effort to control healthcare costs and improve quality more generally. The most effective entitlement reform measure would be a major health reform that helps bring down the growth rate of national health care spending.

This administration is committed to working with the Congress to find ways to control runaway growth in both public and private healthcare expenditures while helping ensure that all Americans receive the high quality, affordable health care that they deserve. The recent commitment of major health stakeholder to help lower the annual growth rate and costs by 1.5% points represents a crucial step in that direction.

Now the trustees’ reports come to the following conclusion. Let me just summarize these briefly:

First: The Medicare program’s financial challenges are larger and more imminent than those of Social Security. Medicare faces demographic challenges, rapidly growing healthcare cost and the short term outlook has been hurt by the recession. Medicare’s annual cost is 3.2% in GDP in 2008, or nearly 3 quarters of Social Security’s, but they’re projected to surpass Social Security expenditures in 2028 and to reach 11.4% of GDP in 2083 compared with only 5.9% for Social Security.

Medicare’s hospital insurance trust fund is projected to become exhausted in 2017, two years earlier than projected in last year’s report. The cost of Medicare supplemental medical insurance to the federal government is projected to increase rapidly. General revenue financing for SMI is expected to increase from about 1.3% of GDP in 2008 to over 4.7% GDP in 2083 with continuing increases beyond those 75 years.

Now, this year’s Social Security report projects that the trust fund is going to be exhausted in 2037, four years earlier than the trustees projected last year. This change is primarily due to the economic recession, recent data that prompted a small downward adjustment to the projected level of real GDP, and the fact that our citizens on average are projected to live longer lives.

Nevertheless, Social Security can continue to pay full benefits for nearly 30 years and cover approximately 75% of scheduled benefits thereafter. Now to ensure that these critical programs are there for future generations, the President and this administration are taking the following steps.

First: we’re intently focused on bringing the current economic and financial crisis to an end and getting on with recovery. The return of robust growth will help solve some but my no means all of the financial problems of Social Security and Medicare.

Second: we’re reforming the health care system via cost control and improve quality which will help strengthen the Medicare program and improve the long term fiscal position of the United States.

Just yesterday, as I said, the President working with major healthcare providers helped secure a commitment to reduce future growth in costs of care by more than 2 trillion dollars. These voluntary efforts will complement the President’s efforts to enact comprehensive reform to assure quality and a affordable health care for every American. And the administration is committed to working with Congress to find ways to control runaway growth in both public and private healthcare expenditures while as I said ensuring that all Americans receive the high quality affordable care that they deserve.

And finally, after we have passed healthcare reform that puts our nation on a path of lower growth in healthcare costs and more expanded and more affordable coverage, this President will work to build a bipartisan consensus to assure the long term solvency of Social Security.

The President doesn’t believe that Social Security is untouchable politically. He believes there is an opportunity now for a new consensus on Social Security reform. The steps the administration is taking towards comprehensive healthcare reform, towards economic recovery and towards deficit reduction over the medium term will all help preserve Social Security and Medicare for future generations and it will help produce a more balanced and more sustainable growth that improves the lives of all Americans, both working Americans and retirees.

News Anchor: We’re now back for final thoughts on the issue of Social Security and Medicare with Barbara Kennelly, the President and CEO of the National Committee to Preserve Social Security and Medicare. Miss Kennelly, again of course our apologies for cutting in on your final answer but we had to go to Secretary Geitner. You were listening in, I was wondering if we might get your thoughts.

Barbara Kennelly: Oh, I thought his statement was excellent. I am thrilled that the President keeps saying he is going to do healthcare reform, and then after he does healthcare reforms he is going to look at the long term problem of the out years of Social Security and let me tell you something: my four million members and supporters want to work with him. We don’t only care about Social Security for ourselves, we care about it for our children and our grandchildren. I thought that the statement was excellent. I thought the attitude was excellent, and I want to once again say that they did say that Social Security can pay full benefits for the next 30 years.

News Anchor: What would your organization be pushing for when this debate is finally joined?

Barbara Kennelly: Well, what we’re really worried about is when you hear about entitlement reform. Entitlement reform, to a lot of people, means cuts. And what I don’t want to see is… Social Security benefits are very moderate, about $13,500 a year. And so when you talk about cutting benefits I get very nervous. You talk about raising the age, yeah, we have to look at that but right now it’s up to 67 and I’ll tell you a lot of people who are 65, 66 and 67, there’s no jobs out there for them, so there’s a lot of work to be done. But I thought that the treasury secretary’s remarks were excellent and I look forward to working with this administration.

News Anchor: How do counter those who have been calling for the privatization of Social Security.

Barbara Kennelly: I gave my life to it for about five years. Aren’t we glad now that we didn’t put some of the Social Security trust fund’s money into Wall Street? Already peoples’ 401Ks are down, the worth of their house is down. I’ll tell you something: privatization is over. That thought we don’t even get. It’s looking at the entitlement reform and what some people really want to do is get rid of the entitlements. So there is always a fight. Ever since Heckler and Roosevelt there have been enemies of Social Security, they’re going to look at what the surplus is just a year or so in the future, not long term surplus. And that has gone down because of the recession. People aren’t working.

News Anchor: Miss Kennelly, we have about a minute left. I was wondering what kind of benefits for Social Security and Medicare are you and your organization willing to give up to help reform the two systems?

Barbara Kennelly: I was there in 1983. I was on the Raise & Means committee doing the reform. And it was a combination of many, many changes in the Social Security system. The Social Security system is very complicated. Everybody’s Social Security is different, it is computed differently. And so yeah, you have to look at what’s coming in and what’s going out. We have what’s called the [...] where you do a certain amounts to become benefits. There are ways you can do it. Are they going to have to raise the age? I don’t know. Maybe, maybe not. But there are all sorts of things that can happen. It goes into a package and that package can be a pass. What I don’t want to see is just benefit cuts and raise the age and not looking at the whole program.

News Anchor: Barbara Kennelly, President and CEO of the National Committee to Preserve Social Security and Medicare joining us from Washington, thanks.

TV Interviewer: Are you worried about your Social Security and Medicare?

Man1: Not particularly, because the risk of insolvency may seem a bit closer today than yesterday, but I have faith that the government can enact reforms to force through all that.

Woman 1: Absolutely.

TV Interviewer: How so?

Lady1: I don’t think it’s going to be there by the time I retire.

Man 2: A little, I won’t say a lot because I am sure that there will be some resolution to it.

Man 3: I wouldn’t say worried, I’m just not confident I am going to receive it. I am making other plans, that’s why I am not worried.

TV Interviewer: Would you prefer to see an increase in taxes or reduction in benefits to help solve this problem?

Man 4: Realistically I think it is going to have to be a combination of both. That the Americans that can most afford it need to have their benefits reduced, and perhaps the tax rates and some of the income levels that… like hedge fund managers that get theirs at a reduced rate of taxation… maybe should pay the full rate of taxation and Social Security.

Man 5: The reduction in benefits is probably going to be more feasible. I don’t know which, they’re both not a very good solution but, you know, of those two that’s the one I would prefer.

Woman 2: I think unfortunately an increase in taxes is the only answer.

Man 6: Probably a combination of both. Some decrease in benefits and some increase in taxes to pay for it. That’s seems to me like a reasonable solution.

TV Interviewer: Do you think we should revisit the idea of privatizing Social Security?

Lady 3: Ha, ha, ha. I don’t think we should revisit the idea of privatizing anything. The era of privatizing, of taking the responsibilities of government and farming them out to the lowest bidder who winds then jacking up the prices on the private citizen is just outrageous.

Man 7: Yes, I do think that despite the fact that the Bush plan was based on the assumption that stock markets would always rise, which turns out not to be the case, a system more based on individuals makes more sense.

Lady 4: Look what we’ve done on Wall Street and look at the mess we are in now. I don’t think giving it to individuals will help the situation any better.

Man 8: It hasn’t worked so well with the government so maybe we should give privatization a try.

What about our readers? Do YOU worry about your Social Security and Medicare? Post your comments below.

Timothy Geithner: “The Social Security and Medicare Boards of Trustees met this afternoon to complete their annual financial review of the programs and to transmit their Reports to Congress. I welcome my fellow Trustees. I also want to acknowledge the hard work and dedication of the chief actuaries, Stephen Goss and Richard Foster.

For generations, tens and tens of millions of Americans have been able to count on Social Security and Medicare as guarantees that they will be able to live out their senior years in economic dignity and with health security.

This year’s Trustees Reports once again reminds us that the longer we wait to address the long-term solvency of Medicare and Social Security the sooner those challenges will be upon us and the harder the options will be. The earlier we as a nation commit to working together to make the difficult but achievable changes needed to strengthen the solvency of Medicare and Social Security, the more we give the American people time to plan and adjust and the sooner we will be able to ensure that these vital programs will be as important for generations to come as they are now.

That is why even as this President has focused on pulling our nation out of economic recession, he has made clear his commitment to working in a bipartisan way to address the long-term health of Medicare and Social Security. The President deeply understands that re-establishing fiscal responsibility as well as the strength of these two vital programs is essential to the economic and health security in our nation and to our generational responsibility to invest in our children and not simply pass on our debts.

The Medicare Trustees Report makes clear today there is no more important long-term fiscal policy measure than gaining control of the growth of Medicare costs by delivering health care services more efficiently. These savings can only be achieved in the context of a larger effort to control health care costs and improve quality more generally. The most effective entitlement reform measure will be a major health reform that helps bring down the growth rate of national health care spending. The Administration is committed to working with Congress to find ways to control runaway growth in both public and private health care expenditures while helping to ensure that all Americans receive the high quality, affordable health care they deserve. The recent commitment of major health stakeholders to help lower the annual growth rate in costs by 1.5% represents a crucial step in that direction.

The Trustees Reports come to the following conclusions.

• The Medicare program’s financial challenges are larger and more imminent than those of Social Security. Medicare faces demographic challenges, rapidly growing health care costs and the short-term outlook has been hurt by the recession. Medicare’s annual costs were 3.2 percent of GDP in 2008, or nearly three-quarters of Social Security’s, but are projected to surpass Social Security expenditures in 2028 and to reach 11.4 percent of GDP in 2083, compared with 5.9 percent for Social Security.
• Medicare’s Hospital Insurance Trust Fund is projected to become insolvent in 2017, two years earlier than projected in last year’s Report.
• The cost of Medicare’s Supplementary Medical Insurance (SMI) to the federal government is projected to increase rapidly. General revenue financing for SMI is expected to increase from about 1.3 percent of GDP in 2008 to over 4.7 percent in 2083, with continued increases beyond 75 years.
• This year’s Social Security Report projects that the Trust Fund will be exhausted in 2037, four years earlier than the Trustees projected last year. This change is primarily due to the economic recession, recent data that prompted a small downward adjustment to the projected level of real GDP after the economy recovers and the fact that our citizens are on average projected to live longer lives. Nevertheless, Social Security can continue to pay full benefits for nearly 30 years, and cover approximately 75 percent of scheduled benefits thereafter.

Despite projections that Social Security can continue to pay full benefits for nearly 30 years, the sooner action is taken the more options for reform will be available and the fairer reforms will be to our children and grandchildren.

To ensure that these critical programs are there for future generations, the President and his Administration are taking the following steps.

First, we are intently focused on bringing the current economic and financial crisis to an end and getting on with recovery. The return of robust growth will help solve some–but by no means all–of the financial problems of Social Security and Medicare.

Second, we are reforming the health care system to get costs under control and improve quality, which will strengthen the Medicare program and improve the long-term fiscal position of the U.S. government. Just yesterday, the President worked with major health care providers to secure a commitment to reduce costs of care by more than $2 trillion dollars. These voluntary efforts will complement the President’s efforts to enact comprehensive reform to assure quality and affordable health care for every American. The Administration is committed to working with Congress to find ways to control runaway growth in both public and private health care expenditures while ensuring that all Americans receive the high quality, affordable health care they deserve.

Finally, after we have passed health care reform that puts our nation on a path to lower growth in health care costs and expanded affordable coverage, this President will work to build a bipartisan consensus to ensure the long-term solvency of Social Security. The President explicitly rejects the notion that Social Security is an untouchable politically and instead believes there is opportunity for a new consensus on Social Security reform.

The steps that the Administration is taking towards comprehensive health care reform, toward economy recovery and toward deficit reduction will all help preserve Social Security and Medicare for future generations. And they will help produce a more balanced and sustainable growth that improves the lives of all Americans, both working and retired.”

“Now, what about Social Security and Medicare taxes? Well, my friends, we don’t pay those either, ever. Why? Because those are ignorance taxes. You see, what do I mean by ignorance taxes? You have to pay to be ignorant enough to have a job to pay earned or to pay ignorance taxes. Social Security and Medicare are taxes that were derived by the US government because it realizes the people were ignorant enough to believe that if they can work for the rest of their lives and ignorant enough to believe that they are going to have health insurance the rest of their lives, not realizing that someday along the way, like with everybody as you get older, there are people out there that are younger, they are better educated, they are more motivated, they work for less money, and they are going to take your job.

And when that happens, when you’re pushed out of your job at some elderly age, you’re going to realize for the first time that you have no passive strings of income and you’re going to be in trouble.

You’re also going to find out that your insurance policy is getting away and that’s going to be a problem because now, it’s hard for you to get insurance as an older person, especially unemployed, let alone the thought of paying for it.

So, my friends, they created something called ignorance taxes, which is this social safety net for people to fall on when they become old and unable to work and unable to obtain insurance. We call this Social Security and Medicare.

Now, why do they not tax real estate investors? Because they realized that if you’re smart enough to figure out how to make passive strings of income that you don’t have to work for, that you’ll never lose a job that you don’t have, and that the income you earn is going to continue to come whether or not you’re old or young and so you’re going to be able to afford to buy health insurance and not have to cancel your health insurance policy when you lose your job.

So because of that, right out of the blocks, real estate investors are saving all Social Security and Medicare taxes. How much is that? That’s 15.2 percent. Now, if you went out there and you think about this, you went out and you’ve started yourself a little business and that little business produced for you $100,000 a year, net, net, net, that’s what you got to take, you’d have to pay 15.2 percent or $15,200 out of that $100,000 gain just for Social Security and Medicare. In addition to that, you’ve got to pay earned income taxes that marginally by $100,000, that would be at least 33 percent.

So you’re paying 48.2 percent in personal income taxes on a $100,000 gain. Now, does it make sense to you that if you would only end up with $52,000, that all I have to earn is $52,000 to make the same thing you do? Think about it.”

Ken Hess: This one is more important to a broad range or larger numbers of clients than most people realize, because it’s not that you have to be eligible for SSI to just get some help. Even if your income and resources are higher than the limit for SSI, if you need help and you’re having trouble paying your medical bills, like that $96.40 per month that comes out for Medicare, talk to the people at Social Services. See if they might be able to get you on the medicare savings plan that would help to have the state pay that premium for you. And then your Social Security check would be higher.

Well, there are a lot of these programs out there and the only way to find out if you qualify is to check with agencies like Social Services, or tribal services. And also there is a national health program for individuals that might be eligible for the prescription drug help. All you do is go to our website and there we’ve got a prescription drug help section, and just go ahead and fill out the application. Nothing bad will happen if you don’t quality, but if you do quality then you could get some extra financial help.

Interviewer: They would pay anybody with low income than to really check into this Medicare thing. There could be help…

Ken Hess: Oh absolutely, and that’s a great one in that if you go right to that website you can do the application for the extra help yourself, or if you’re taking care of someone else… I was just at a senior fair and a lady was talking about help for her mother, who is in a nursing home. And we came upon the fact that the lady had not helped her mom fill out for the stimulus payment, and so right off the back that was $300 that she was able to go to www.irs.gov and print the forms to file a tax return for 2007 so as to get her mother qualified for that stimulus refund, and since the mom has limited income and resources, she will go to www.SocialSecurity.gov and apply to see if she is eligible for the extra help for paying prescription drug expenses. And for the extra help for medicare talk to somebody from Social Services.

Interviewer: Okay, thank you.

Ken Hess: Well, for Medicare drug coverage, if you get to be age 65 or if you’re disabled and you’re offered Medicare after being on benefits for two years, you can apply for your prescription drug coverage also.

Now, we ask that people contact us two months ahead of time. So, if you’re turning 65 in January it would be good to contact us in November or as early as October, at the very earliest. Now, it’s not that we need that much time to get people signed up, but we need the time to get the information over to the Medicare agency for them to print the card and send you out the package of enrollment information. That takes a little while, so give us a little time.

Stop in and see us before age 65 to apply for your Medicare coverage, and then when you want a prescription drug coverage, you can then take your receipt to an insurance agent and deal with them about applying for the prescription drug coverage. And, if you need help from the government in paying your prescription drug premium and deductibles, you can work with us at Social Security about applying for the extra help in paying for premiums.

Now, the extra help program is for people who meet the income requirements, so you have to have limited income and resources, but it’s very simple process to go through the application and to apply for that. So, work with us as at Social Security on applying for the extra help program when you start the process of getting your Medicare started.