Good News: While ‘Unfunded’ Liabilities Have Helped Bankrupt Companies,
USA Inc.'s Unfunded Liabilities are Not Legal Contracts
e Medicare / Social Security — While beneficiaries have a legal entitlement to receive benefits as set forth under the Social Security Act, Congress has the legal authority to change the levels of benefits and/or the conditions under which they are paid. Congress’s authority to modify provisions of the Social Security program was affirmed in the 1960 Supreme Court decision in Flemming v. Nestor, wherein the Court held that an individual does not have an accrued “property right” in Social Security benefits. The Court has made clear in subsequent decisions that the payment of Social Security taxes conveys no contractual rights to Social Security benefits.
Medicaid — Benefit levels & eligibility are determined jointly by Federal
and State governments. Federal funding is met through an appropriation by Congress (and can be adjusted annually).
Source: Congressional Research Service, Social Security Reform: Legal Analysis of Social Security Benefits Entitlement Issues. (@)E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 251
What Might a Turnaround Expert Consider?
Focus on Expenses
Reform Entitlement Programs
Focus on Operating Efficiency
(@E) www.kpcb.com
Focus on Revenues
Drive Sustainable Economic Growth
Change Tax Policies
USA Inc. | What Might a Turnaround Expert Consider? 252
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