CNMI Senator Claims U.S. Social Security Not Wholly Secure

admin's picture

Government warned federal program facing its own issues

By Emmanuel T. Erediano

SAIPAN, CNMI (Marianas Variety, June 13, 2012) – Before everybody gets too excited about the proposed move to U.S. Social Security, Rep. Joseph M. Palacios is urging his colleagues in the Commonwealth of the Northern Mariana Islands (CNMI) to check what’s going on with the federal program.

In an interview on Monday, Palacios, R-Saipan, said Social Security is facing its own problems.

Citing its trustees’ annual report released on April 23, Palacios said the federal program may run dry in 2033.

But some noted that unlike the CNMI, the federal government can print money.

Charles Blahous, one of the two public trustees of the U.S. Social Security Administration, in his website article, "A Guide to the 2012 Social Security Trustees Report," noted that the program’s cost has been exceeding tax collections.

Blahous said that in 2011, program costs exceeded tax collections by $148 billion. This year, they’re projected to exceed tax collections by $165 billion.

Some of this gap, Blahous said, "arises from the recently adopted policy of cutting the payroll tax."

"In 2010, Social Security began to strain the federal budget when its expenditures surpassed its tax collections. Program costs are rising rapidly, and by 2030 will exceed 17 cents of every taxable wage dollar workers earn, after which the combined trust funds are projected to be exhausted in 2033. This would trigger automatic benefit reductions if the law is not changed before then," Blahous said.

"Inaction until 2033 would mean that benefits are cut percent across the board — affecting everyone already on the rolls (many of whom are receiving benefits today in 2012)," he added.

Palacios said that while the U.S. Social Security Administration is dealing with its own problems, "here we are trying to move into its program."

He expressed doubt that the U.S. Congress will act right away on a proposal to include the NMI in the federal program.

"I believe the U.S. Congress should have more to worry about with the federal program. We are just a few thousands of people versus millions of people in the U.S. who are dependent on Social Security," Palacios said.

He said he was not saying the U.S. Congress will oppose an amendment to redefine the CNMI as one of the "states" included in Social Security, "but I don’t think we are a priority to them."

"They have their own issues to deal with," he said.

According to Palacios, Congressman Gregorio Kilili Camacho Sablan has "made it very clear that he will do his best. I’d like to believe him that it will be entertained this year. But we should also understand the reality that Social Security itself has its own problems."

Like Speaker Eli D. Cabrera, R-Saipan, Palacios supports House Bill 17-226, which will allow the Fund’s active members to withdraw half of their contributions. The governor has vetoed the bill.

Joe Pangelinan, an active Fund member, said he believes that Social Security is the best option for them if there’s no way to extend the life of the CNMI’s retirement system.

He said the federal government will not allow Social Security "to go belly up." There are many things the federal government can do before 2033 comes, he added.

"Right now we are concerned about the two remaining years of our own Retirement Fund. If nothing drastic is done then, buying back to the U.S. Social Security is the best option," he said, adding that the CNMI government is broke, and the government’s employees are working 64 hours, "so where are we going to get the money to help the Fund?"

Rate this article: 
No votes yet

Add new comment