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Fy 2012 Federal Mandatory Budget


I thought the following may be of interest.


FY 2012 Federal Mandatory Budget

What Is Mandatory Spending?:

Mandatory Spending, at $2.109 trillion in FY 2012. The largest mandatory spending programs were Social Security and Medicare, as follows:

  • Social Security - $761 billion
  • Medicare - $468 billion
  • Medicaid - $269 billion
  • TARP - $13 billion
  • All other mandatory programs - $598 billion. These programs include Food Stamps, Unemployment Compensation, Child Nutrition and Tax Credits, Supplemental Security for the Disabled and Student Loans.Table S-3)
    More than Half of the Budget Goes Towards Mandatory Spending:
    Mandatory spending is 57% of total Federal spending. It almost three times as much as the military budget, and 1 1/2 times all discretionary spending. The mandatory budget is, as its name implies, mandated by Congress to be spent outside of the annual budgetary process. It cannot be changed without a change in the laws that set up the programs.(Source: OMB, Table S-4)
    How Is Social Security Funded?:
    Social Security is funded through payroll taxes. Through 2017, Social Security collects more in tax revenues than it pays out in benefits because there are 3.3 younger workers for every beneficiary. This created a surplus in the Social Security Trust Fund. However, in 2008 the first of 78 million Baby Boomers turned 62 and became eligible to draw down benefits. Over the next 30 years, there will be fewer and fewer workers per retiree to support Social Security via payroll taxes. By 2040, the Social Security Fund will be depleted and income will be insufficient to pay benefits promised to, and earned by, retirees.

    How Is Medicare Funded?:
    Unlike Social Security, Medicare payroll taxes and premiums cover only 57% of current benefits. The remaining 43% is financed from general revenues. Because of rising health care costs, general revenues would have to pay for 62% of Medicare costs by 2030. As with Social Security, the tax base is insufficient to pay for this. Medicare has two sections:

    • The Medicare Part A Hospital Insurance program, which collects enough payroll taxes to pay current benefits.
    • Medicare Part B, the Supplementary Medical Insurance program, and Part D, the new drug benefit, which is covered by premium payments and general tax revenues.
      How Does Mandatory Spending Affect the U.S. Economy?:
      With over half the budget dedicated to mandatory programs, the Federal government is restricted in discretionary spending. This is one reason President Obama asked for health care reform.Mandatory spending now includes the TARP program. In FY 2009, the government spent $150 billion to rescue troubled banks. In FY 2010, banks paid back $110 billion and $28 billion in FY 2011. The FY 2012 budget proposes spending $13 billion to help modify mortgages.

      In the long run, the high level of mandatory spending means rigid and unresponsive fiscal policy. This is a relentless drag on economic growth.

      The first Baby-Boomer turned 62 in 2008, becoming eligible to retire on Social Security benefits. By 2025, those aged 65+ will comprise 20% of the population. As Boomers leave the work-force and apply for benefits, three things happen:
    1. The percentage of the labor force under 55 stagnates, providing less payroll taxes to fund Social Security.
    2. Economic growth slows partly because of fewer workers.
    3. By 2040, the Social Security Trust Fund goes bankrupt.

    Choices for FY 2012 and Beyond:

    As a result, the U.S. Federal Budget in 2012 and beyond will have to choose among the lesser of three evils, none of which are good for the economy:

    [*]Devote more of the budget to pay Social Security benefits. However, to maintain current benefits, the federal budget will have to increase to 25% of GDP by 2045.[*]To fund this increased budget, taxes would have to increase, further slowing the economy.[*]Decrease the benefit amount paid to retirees. This is the most likely scenario. This would force able-bodied Boomers to continue working.

    View this article at:




    My question is being disabled and receiving ss retirement the same as just receiving retirement pay each month? I receive Dic and SS (receive a check from my deceased hubby's ss) each month.

    I think I can file at 60 for regular retirement, but I am not sure.

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4 answers to this question

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Be careful what you choose make sure you optimize your SS.

Good Luck

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I don't think anyone will cut benefits to current retiree generation because they will instantly lose votes. They will try and reduce future benefits for younger citizens. They budget hawks have already convinced many under 40 that they will not get SSA or medicare. This is the use of propaganda in that if you say it often enough and loud enough it will be believed.

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The real downside to Social Security is the maggots decided to keep dipping into it as a slush fund as it was not protected. They have not paid any monies back into the fund. They should have paid it back with interest as this fund is a fund paid into by the people.

There lies the problem with SSA.

It makes me sick as no one wants to accept responsibility for their actions.


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