Public Program Testing Organization

W e l c o m e !

Our Mission

Founded in 2002, the Public Program Testing Organization (PPTO) is an all-volunteer, tax-exempt organization dedicated to evaluating the effectiveness and efficiency of governmental programs and not-for-profit entities.  Our initial focus was directed towards an evaluation of the United States Social Security system, and proposals for reform of that system.  Several items related to Social Security can be found on this page and on the Social Security page.  Other issues explored on our Web site include Medicare, income taxes, and financial regulation.  The PPTO's findings are communicated via radio show presentations, newspaper commentaries, direct communications with governmental agencies and congressional leaders, and via this Web site.

Joe Fried, CPA, Director  

Medicare finances look better - or do they? (August 5, 2010)

Led by Treasury Secretary Timothy Geithner, the Medicare Trustees released a report stating that, due to healthcare legislation championed by President Barack Obama, Medicare is expected to remain solvent for an additional 12 years. However, a strong dissenting opinion was issued by Medicare's Actuary, Richard Foster, who asserted that the reports projections "do not represent a reasonable expectation." The Trustees' report was scheduled for release last spring, but was delayed by the Obama Administration so that projections could be recalculated to reflect the new healthcare legislation.  Read more>>

Where is the annual Social Security report? (July 6, 2010)

"Every year, the Annual Report of the Social Security Board of Trustees comes out between mid-April and mid-May.  Now it's July, and there's no sign of this year's report.  What is the Obama administration hiding?" The report is prepared by Social Security actuaries, and contains financial information and projections for the next 75 years. Read more by Peter Ferrara in Investors.com.

Finally: Feds approve Louisiana sand berms to fight oil slick (June 2, 2010)

After weeks of apparent procrastination, "U.S. Coast Guard Admiral Thad Allen told BP to pay for the five berms approved by the White House, in addition to one he and the Army Corps of Engineers approved last week." These berms will be artifical sand reefs designed to keep the oil slick away from fragile Louisiana wetlands and wildlife. Read more in Reuters.

National Debt over $13 trillion for first time (June 2, 2010)

The Treasury Department reports that the National Debt exceeded $13 trillion as of June 1st, 2010. This amount equals nearly 90 percent of the nation's Gross Domestic Product, which is the total market value of all goods and services produced by the U.S. in a year. President Obama blamed his predecessor for the huge deficits. Read more.

USAToday: "Is oil spill becoming Obama's Katrina?" (May 27, 2010)

Louisiana residents "want to know why the federal government didn't act faster to stop the oil from reaching shore, why BP hasn't been forced to skim more oil from the surface and why their request hasn't been approved to build new barrier islands to help keep the oil at bay." Read more.

NYT: Obama administration slow to act on BP oil spill (April 30, 2010)

"We now face a huge disaster whose consequences might have been minimized with swifter action." Read editorial.

CBO: U.S. debt to soar under Obama Administration's budget (March 5, 2010)

The Congressional Budget Office (CBO) announced that the Obama Administration's proposed budget would add more than $9.7 trillion to the national debt over the next decade, and this is without adding any possible impact from the Administration's health care initiatives. In addition,  "Interest payments on the debt would also skyrocket by $800 billion over the same period."  Read report in Washington Post.

Mayo Clinic, a role-model for health care, drops Medicare patients  (January 1, 2010)

Although cited by President Obama as a model provider of good health care, the Mayo Clinic has decided to stop accepting Medicare patients at one of its primary-care clinics in Arizona. The decision, which will take effect immediately, is due to U.S. government reimbursement rates, which Mayo says are inadequate. The two-year pilot program will not affect patients in other states.  Read More>>

Is Medicare really a model for health insurance reform?  (December 5, 2009)

During the recent health insurance debate more than one politician or pundit has made note of the contentment most senior citizens have with regard to Medicare benefits.  That may be true, but before we get too happy about it we should remember that Medicare is bankrupting the country. This is no exaggeration.  It is estimated that a single woman who earns $20,000 dollars per year will get a net benefit of a quarter million dollars.  That is, she will get medical benefits that cost Medicare $250,000 more than the total of payroll taxes she paid during her entire working career.  If that same woman (or man) is married and has a stay-at-home spouse, her (his) net benefit will be one-half million dollars ($500,000). Since there are millions of such people who are in Medicare, or soon will be, common sense tells us that such an imbalance cannot be sustained (no matter how much we try to "tax the rich").  The truth is, Medicare is a mismanaged mess, and should not be expanded or replicated. Evidence of the waste in Medicare is found in the "60 Minutes" story found a little further down on this page.

The chart, below shows net Medicare benefits for various people at different income levels and with different familial status. It is reproduced (with permission) from Democrats and Republicans - Rhetoric and Reality, by Joseph Fried.  Fried obtained the benefit estimates from tables created by Economists C. Eugene Steuerle and Adam Carasso. Notice that, no matter what the income level, everyone gets a net benefit (ranging from a low of $142,000 to a high of $525,000).  If everyone is a Medicare "winner," so to speak, who is going to pay the tab?

The old "Miami Vice" TV show focused on the Florida cocaine trade:

    It should have focused on Medicare.

Medicare is the government insurance program that provides health care to 46 million elderly and disabled Americans but it also provides criminals with a steady stream of illicit income.  In fact, Medicare fraud, estimated to be about $60 billion per year, may now be one of the most profitable crimes in America.

Recently, "60 Minutes" ran a story that will raise your blood pressure and raise troubling questions about our government's ability to manage a medical bureaucracy. It was a timely story, given the fact that, in the current debate over health insurance reform, many cite Medicare as the model program to emulate.

FBI Special Agent Brian Waterman told reporter Steve Croft that evidence of Medicare fraud is found in the thousands of tiny clinics and pharmacies that dot low-rent strip malls in south Florida. In these clinics and pharmacies you will find no one - no doctors, nurses, or patients.

Standing outside one of those small, unstaffed businesses, Waterman stated: "This office number should be manned and answered 24 hours a day. The tiny medical supply company he referred to billed Medicare almost $2 million in July and a half million dollars while 60 Minutes was there in August. However, 60 Minutes was unable to find anybody inside, and their telephone calls were never returned.

To read the whole story, click here:   

Medicare Fraud: A $60 Billion Crime - 60 Minutes - CBS News

Trustees report for 2009 shows deterioration in SS and Medicare (5/13/09)

In a recently-released report, the Social Security and Medicare Trustees note that the economic recession is exacerbating the financial difficulties for Social Security and Medicare.  Social Security reserves will be exhausted in 2037 - four years earlier than previously forecasted.  Medicare cash will be exhausted by 2017, which is two years earlier than previously expected.  To bring Medicare into balance over the next 75 years would require an immediate cut in outlays of 53 percent, or a tax increase of 134 percent (increasing the rate from 2.9 to 6.78 percent of payroll).  Social Security could be restored to balance over the next 75 years with an immediate benefits cut of 13 percent or by increasing the payroll tax rate from 12.4 to 14.4 percent.  Read the Trustees summary report>>.  Read story in the New York Times>>.

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Social Security issues

 

Plurality of Americans want private option for Social Security (3/12/09)

By 46 to 38 percent, Americans believe workers should be allowed to opt out of Social Security to provide for their own retirement planning, according to a  recent Rasmussen Reports national telephone survey.

A majority of voters also agree with President Obama's proposal for workers to pay Social Security taxes on more of the income they earn each year. Sixty percent (60%) say people should pay Social Security taxes on all or most of their annual income. Twenty-nine percent (29%) disagree, and 11% are undecided. Sixty-two percent (62%) of voters also say people who pay more in Social Security taxes should receive more in retirement benefits when they retire. Twenty-two percent (22%) are against that idea, with 16% undecided.

Currently, a worker pays Social Security withholding tax equal to 6.2% of his or her gross wages, up to but not exceeding $102,000 per year. The same 6.2% tax is imposed on employers. As part of his plan for shoring up Social Security, Obama has proposed levying the 6.2% tax on wages of $250,000 and above but not on earnings between $102,000 and $250,000. [Note:  Under current law, the benefit payment rate on wages over $54,000 per year is only a small fraction of the benefit rate for lower wages.  In other words, there is already a large transfer of wealth from higher-earning workers to lower-earning workers.]

The survey results are from a national telephone survey of 1,000 Likely Voters conducted by Rasmussen Reports on December 21, 2008. The margin of sampling error for the survey is +/- 3 percentage points with a 95% level of confidence.

SS Disability claims soar due to recession (4/19/09)

Job layoffs are leading to increased applications for disability benefits, and the Social Security system is straining under the paperwork.  Read on MercuryNews.com.

Democrats resist President Obama on Social Security (2/22/09)

The New York Times reports that Democrats are resisting President Obama's call for a bipartisan panel to study Social Security reform.  Some liberal Democrats say they will resist plans to cut benefits, and that Obama's "political capital" would be better spent on health care and other issues.

Who earns what?  Who pays the taxes? (11/11/08)

According to recently-released IRS data, the highest earning 1% of of Americans made about 22% of all 2006 income (reported on tax returns) and paid about 40% of all 2006 federal income tax.  Americans with earnings in the lower 50% made about 12.5% of all reportable income and paid about 3% of federal income taxes.  Keep in mind that welfare distributions (including food stamps and the Earned Income Tax Credit) were not counted in this analysis, and would substantially increase the percentage of income for people with earnings in the "lower 50%."  Read in Kiplinger's>>

INTERESTING NOTE:  During the recent U.S. Presidential election it was claimed that taxpayers with relatively high earnings "got a break" during the 8 years of the Bush Administration.  However, it should be noted that the percentage of 2006 taxes paid by the upper 1% of earners (40%) was greater than the percentage paid by the upper 1% during 2000 - the last year of the Clinton administration. (They paid about 37.5%.)  In fact, in 2006 the upper 1% of earners paid more than the entire lower 95% of earners. A great analysis of these tax data, and the trends since 1980, are found on "Carpe Diem," the blog of Dr. Mark J. Perry, Professor of economics and finance at the University of Michigan.

Who is responsible for the crisis on Wall Street? (10/2/08)

We all know that Wall Street "greed" is responsible for the recent credit crisis.  But, the federal government is also culpable.  Specifically:

1. The Federal Reserve Bank Chairman, Alan Greenspan, kept interest rates too low after the 911 attack.  This overheated the housing market, and encouraged institutional investors to park their assets in the now infamous "mortgage-backed securities" (MSBs).  MSBs offered higher interest rates, and seemed safe, but were not because they were laced with subprime mortgages (risky loans to marginally-qualified home buyers).  When housing prices declined and these subprime mortgages went into foreclosure, the market for MSBs collapsed.

2. Virtually all Congressional Democrats (and some Republicans) fought against regulatory reform of Fannie Mae and Freddie Mac.  These quasi-private entities had a large role in the rapid growth of the subprime mortgage market.  Fannie and Freddie encouraged the expansion of lending in poor and middle-class neighborhoods, at the expense of prudent lending practices. Irresponsible private lenders eagerly followed suit, and further expanded subprime lending.

3. The Bush Administration's Securities and Exchange Commission (SEC) was lax in regulating Wall Street lending and investment practices.  SEC should have warned that many of the MSBs were laced with risky subprime loans, and were not suitable for the investors who bought them.  And, SEC should have been more rigorous in enforcing the capital requirements of the investment banks.

An excellent overview of the crisis and its causes has been published on reasononline.  See "The Roots of the Crisis," by Michael Flynn, Director of Government Affairs for the Reason Foundation.

Where does Barack Obama stand on Social Security? (7/3/08)

Barack Obama has stated that he opposes a change to benefits, opposes a change in retirement age, and opposes allowing workers to opt for Private Retirement Accounts.  His solution to the financial problems of the system is to tax individuals with income above the current cap of $102,000.  Apparently, these people will pay additional tax without getting additional benefits, or without getting full additional benefits. (This detail is not clear.)  To read Senator Obama's plan click here>>.

Fake janitors skim $2.2 billion from SS trust fund?!

Other Important Issues

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Date last modified August 2010