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• No license is required to dig wild ginseng on private land in Pennsylvania.
• A commercial license must be obtained from the state by anyone who intends to export from the state any ginseng harvested in Pennsylvania.
• The harvest season for wild ginseng in Pennsylvania is September 1 to November 30. Possession of harvested fresh ("green") ginseng is prohibited from April 1 and August 31.
• Pennsylvania state law requires that all harvested wild ginseng plants have at least 3 prongs of 5 leaflets each, and that plants are collected only when the fruit is red.
• Pennsylvania requires that seeds of collected wild ginseng be planted in the immediate vicinity of the collection site.
• Ginseng may not be harvested on state owned lands in Pennsylvania.
• The PA Department of Conservation Natural Resources, Bureau of Forestry, serves as the state's ginseng coordinator. This office can bereached at (717) 787-3444 or:
6th Floor, Rachel Carson
State Office Bldg.
P.O. Box 8552
Harrisburg, PA 17105-8552
• Collection of ginseng is prohibited on the Allegheny National Forest, which can be contacted at (814) 723-5150 or via mail:
4 Farm Colony Dr.
Warren, PA 16368
Provided by the American Herbal Products Association, in cooperation with U.S. Fish and Wildlife Service and United Plant Savers
§ 45.61. Commercial license requirements.
A person may not buy, trade or barter Pennsylvania Vulnerable plants, or parts thereof, with the intent to sell them within this Commonwealth, or export these plants or parts from this Commonwealth, without first applying for and obtaining a commercial license in writing from the Department. A person may take or possess these plants if the activities are necessary to perform the licensed activity.
§ 45.62. Contents of commercial license application.
(a) An application for a license under this subchapter shall be submitted to the Department in writing, upon forms provided by the Department.
(b) An application for a commercial license shall be accompanied by information or data as the Department may require to determine compliance with the standards, requirements and purposes of the act and this chapter.
(c) Information set forth in the application shall be current and presented clearly and concisely.
(d) An application to obtain a commercial license shall contain the following information:
(1) The name, address and phone number of the applicant.
(2) The activity sought to be licensed.
(3) A brief and complete description of the applicant's business as it relates to dealing in Pennsylvania Vulnerable plants.
(4) The address where books or records describing commercial transactions of Pennsylvania Vulnerable plants will be kept.
(5) The name, address and telephone number of the person authorized to make records or inventories of Pennsylvania Vulnerable plants available for examination by the Department.
(6) If the application is in the name of a business, the form of the business—for example, corporation, firm, partnership—and the name and address of each partner, officer, director and shareholder who owns 10% or more of the shares in the business.
(7) The common and scientific names of the Pennsylvania Vulnerable plant species for which a commercial license is sought.
(8) The commercial license history, including the identification numbers of previous commercial licenses that have been issued by the Department to the applicant.
(9) Other information the Department may require.
(e) An application shall be dated and signed by the applicant. Business applications shall be signed by a partner or officer, who shall set forth his title.
(f) An application for a commercial license shall be verified by the applicant with a statement that the information in the application is true and correct to the best of the applicant's knowledge, information and belief.
§ 45.63. Criteria for license approval.
An application for a commercial license will not be approved unless the application affirmatively demonstrates and the Department finds, in writing, the following:
(1) The application is accurate and complete and the requirements of the act and this chapter have been satisfied.
(2) There is no history of past or continuing violations or conduct which indicate the applicant's lack of ability or intention to comply with the act or this chapter.
§ 45.64. Commercial license fee and expiration.
(a) An application for a commercial license will be accompanied by a check payable to the ''Commonwealth of Pennsylvania'' in the amount of $50.
(b) A commercial license expires on June 30 of the year next following the year of its issuance.
§ 45.65. Transaction records.
(a) The holder of a commercial license issued under this subchapter shall maintain transaction records. The transaction records shall include the following information regarding Pennsylvania Vulnerable plant activities:
(1) The names and addresses of persons from whom the licensee purchased or otherwise acquired the Pennsylvania Vulnerable plants, and the dates of purchase or acquisition.
(2) The names and addresses of persons to whom Pennsylvania Vulnerable plants were deposited, traded, sold, transferred, bartered, exported or otherwise disposed of, and the dates upon which these activities occurred.
(3) The scientific and common names of the plants.
(4) The county of origin of the plants.
(5) A description of the form of the plants—for example, whole plant, root, seeds, green or dry.
(6) The year of harvest of the plants.
(7) The weight, destination and date of export for each shipment of the plants that are exported.
(8) A statement of whether the plants are wild or cultivated.
(9) The weight in pounds and ounces and estimated number of the plants per transaction. For the purposes of evaluating the number of ginseng plants per transaction, the estimated number of ginseng plants will be determined by taking a sample from each transaction of the number of ginseng roots in 1 pound.
(10) Other information the Department may require.
(b) The holder of a commercial license shall keep transaction records required to be maintained by this subchapter for 5 years after the occurrence of the transactions to which the records relate. The records shall be made available to the Department upon request.
(c) The holder of a commercial license to deal in ginseng shall submit a dealer quarterly report relating to transaction records, on forms provided by the Department within 15 days of the end of each quarter of the calendar year. This dealer report shall be submitted to the Department and shall contain the following information for the quarter:
(1) The date of the report.
(2) The quarter in which transactions occurred.
(3) The name, address and phone number of the licensee.
(4) The license number and date issued.
(5) The weight in pounds and ounces of wild ginseng purchased or otherwise acquired from harvesters, by county of harvest, and a statement of whether the roots were green or dried.
(6) The average price per pound paid for wild ginseng.
(7) The weight in pounds and ounces of cultivated ginseng purchased or otherwise acquired from growers, by county of harvest, and a statement of whether the roots were green or dried.
(8) The average price per pound for cultivated ginseng.
(9) The weight in pounds and ounces of ginseng purchased or otherwise acquired from other licensees, and a statement of whether the purchased or acquired ginseng was wild or cultivated and if roots were green or dried.
(10) The number of pounds and ounces of wild ginseng and of cultivated ginseng in the licensee's possession on the reporting date.
(11) The weight in pounds and ounces of ginseng sold, traded or bartered, whether the ginseng was wild or cultivated and if roots were dried or green.
(12) The identification number of State certificates used to ship ginseng from this Commonwealth.
(13) Other information the Department may require.
(d) The holder of a commercial license to buy and sell ginseng shall submit an annual dealer report for the prior calendar year. The annual dealer report shall be completed on forms supplied by the Department and shall contain the information required in subsection (c) compiled for the previous calendar year. The report shall be submitted annually for the prior calendar year to the Department within 15 days of the beginning of the calendar year.
The provisions of this § 45.65 adopted December 4, 1987, effective January 1, 1988, 17 Pa.B. 5027; amended June 18, 1993, effective June 19, 1993, 23 Pa.B. 2816. Immediately preceding text appears at serial pages (123467) to (123468).
§ 45.66. Inspection and review.
The licensee shall make available for inspection by the Department transaction records and Pennsylvania Vulnerable plant materials to be sold, traded, bartered or exported and that are on the premises. The records shall be made available for copying by the Department.
§ 45.67. Transfer of license prohibited.
A commercial license is nontransferable.
§ 45.68. Revocation.
(a) The Department may revoke a commercial license it has issued, for good cause. Good cause includes, but is not limited to, the following factors:
(1) Failure to comply with this chapter or the act.
(2) Failure to comply with a term or condition of the license.
(b) A person whose commercial license has been revoked is not eligible to apply for, and may not obtain, another commercial license for a period of 2 years from the date of revocation.
§ 45.69. Vulnerable plant harvest seasons and conditions.
(a) A person may not harvest ginseng except in compliance with applicable law, this chapter and the following restrictions:
(1) A person may harvest ginseng plants only from August 1 through November 30.
(2) Only mature ginseng plants with at least three leaves of five leaflets each may be harvested and only when the seeds are red.
(3) Persons harvesting ginseng plants shall plant the seeds from the plants in the immediate vicinity of the collection site.
(b) A person may not possess harvested, green ginseng roots between April 1 and August 1 of a calendar year.
(c) A person may not harvest Pennsylvania Vulnerable plants other than ginseng except in compliance with applicable law, this chapter and the following restrictions:
(1) A person may harvest the plants only if they are mature and the current year's seeds have matured.
(2) A person harvesting the plants shall plant the seeds from the plants in the immediate vicinity of the collection site.
(3) A person may not harvest the plants in a way that will harm the species' ability to perpetuate itself successfully.
(d) The permitted harvesting of Pennsylvania Vulnerable plants includes picking, taking, digging, disturbing and possessing the plants if the activities are necessary to legally harvest the plants. Possession of legally taken Pennsylvania Vulnerable plants is permitted.
§ 45.70. Pennsylvania ginseng certification.
(a) A person may not export Pennsylvania ginseng from this Commonwealth without first obtaining a commercial license and a Pennsylvania ginseng certificate.
(b) A Pennsylvania ginseng certificate shall be required for each export shipment of Pennsylvania ginseng.
(c) To be certified, the state of origin for wild ginseng or cultivated ginseng shall be Pennsylvania.
(d) A Pennsylvania ginseng certificate will not be issued unless the licensee presents the shipment to the Department at a designated facility and presents the following information on a Pennsylvania ginseng certificate application form, available from the Department:
(1) The licensee's name and commercial license number.
(2) The date of the application.
(3) The name and address of buyer and export destination.
(4) A statement of whether the ginseng is wild or cultivated.
(5) A statement of whether the ginseng is green or dry.
(6) The year of harvest of ginseng being certified.
(7) The state of origin.
(8) The weight in pounds and ounces written numerically and in full and verified by a weigh slip from a Commonwealth certified weigh station or scale.
(9) The shipment number.
(10) Other information the Department may require.
(e) The Pennsylvania ginseng certificate application shall be verified by the licensee with a statement that the information contained in the form is true and correct to the best of the licensee's knowledge, information and belief, and that the ginseng was legally taken under this chapter and applicable law.
(f) The Department may countersign the application and issue a Pennsylvania ginseng certificate if the Department is satisfied that the information in the application is complete, and if the Department finds that a representative sample supports the information in the application.
§ 45.71. Transfer of certificate prohibited.
A Pennsylvania ginseng certificate is nontransferable.
§ 45.72. Possession of unsold ginseng.
(a) A licensee who has ginseng unsold on March 31 of the year after harvest is required to obtain a weigh slip for the unsold ginseng from a Commonwealth certified weigh station or scale and submit a copy of that slip to the Department by May 1.
(b) A licensee may not obtain a Pennsylvania ginseng certificate to export unsold ginseng in the licensee's possession in excess of the amount shown on the weigh slip.


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Social Security and Medicare Boards of TrusteesA MESSAGE TO THE PUBLIC:
Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. This message summarizes the 2014 Annual Reports.
Neither Medicare nor Social Security can sustain projected long-run program costs in full under currently scheduled financing, and legislative changes are necessary to avoid disruptive consequences for beneficiaries and taxpayers. If lawmakers take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.
Social Security and Medicare together accounted for 41 percent of Federal expenditures in fiscal year 2013. The general revenue transfers into SMI and interest payments made to the trust funds are resulting in mounting pressure on the unified budget, as will the eventual decline in the level of total reserves held by the Social Security and HI Trust Funds. Both programs will experience cost growth substantially in excess of GDP growth through the mid-2030s due to rapid population aging caused by the large baby-boom generation entering retirement and lower-birth-rate generations entering employment and, in the case of Medicare, to growth in expenditures per beneficiary exceeding growth in per capita GDP. In later years, projected costs expressed as a share of GDP trend up slowly for Medicare and are relatively flat for Social Security, reflecting slower growth in per-beneficiary health care costs and very gradual population aging caused by increasing longevity.
Social Security
Social Securitys Disability Insurance (DI) program satisfies neither the Trustees long-range test of close actuarial balance nor their short-range test of financial adequacy and faces the most immediate financing shortfall of any of the separate trust funds. DI Trust Fund reserves expressed as a percent of annual cost (the trust fund ratio) declined to 62 percent at the beginning of 2014, and the Trustees project trust fund depletion late in 2016, the same year projected in the last Trustees Report. DI costs have exceeded non-interest income since 2005 and the trust fund ratio has declined in every year since peaking in 2003. While legislation is needed to address all of Social Securitys financial imbalances, the need has become most urgent with respect to the programs disability insurance component. Lawmakers need to act soon to avoid automatic reductions in payments to DI beneficiaries in late 2016.
To summarize overall Social Security finances, the Trustees have traditionally emphasized the financial status of the theoretical combined trust funds for DI and for Old Age and Survivors Insurance (OASI). The combined trust funds, and expenditures that can be financed in the context of the combined trust funds, are theoretical constructs because there is no legal authority to finance one programs expenditures with the other programs taxes or reserves. Social Securitys total expenditures have exceeded non-interest income of its combined trust funds since 2010 and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period. The Trustees project that this annual cash-flow deficit will average about $77 billion between 2014 and 2018 before rising steeply as income growth slows to its sustainable trend rate after the economic recovery is complete while the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Redemption of trust fund asset reserves from the General Fund of the Treasury will provide the resources needed to offset Social Securitys annual aggregate cash-flow deficits. Since the cash-flow deficit will be less than interest earnings through 2019, reserves of the combined trust funds will continue to grow but not by enough to prevent the ratio of reserves to one years projected cost (the combined trust fund ratio) from declining. (This ratio peaked in 2008, declined through 2013, and is expected to decline steadily in future years.) After 2019, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of combined trust fund reserves in 2033, the same year projected in last years Trustees Report. Thereafter, tax income would be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2088.
Under current projections, the annual cost of Social Security benefits expressed as a share of workers taxable earnings will grow rapidly from 11.3 percent in 2007, the last pre-recession year, to roughly 17.1 percent in 2037, and will then decline slightly before slowly increasing after 2050. Costs display a slightly different pattern when expressed as a share of GDP. Program costs equaled 4.1 percent of GDP in 2007, and the Trustees project these costs will increase to 6.2 percent of GDP for 2037, then decline to about 6.0 percent of GDP by 2050, and thereafter rise slowly reaching 6.1 percent by 2088.
The projected 75-year actuarial deficit for the combined Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds is 2.88 percent of taxable payroll, up from 2.72 percent projected in last years report. This deficit amounts to 22 percent of program non-interest income or 17 percent of program cost. A 0.06 percentage point increase in the OASDI actuarial deficit would have been expected if nothing had changed other than the one-year extension of the valuation period to 2088. The effects of recently enacted legislation, updated demographic and economic data, and improved methodologies on net worsened the actuarial deficit by 0.10 percent of taxable payroll.
While the theoretical combined OASDI Trust Fund fails the long-range test of close actuarial balance, it does satisfy the test for short-range (10-year) financial adequacy. The Trustees project that the combined trust fund asset reserves at he beginning of each year will exceed that years projected cost through 2027.
The Trustees project that the Medicare Hospital Insurance (HI) Trust Fund will be the next to face depletion after the DI Trust Fund. The projected date of HI Trust Fund depletion is 2030, four years later than projected in last years report. At that time dedicated revenues will be sufficient to pay 85 percent of HI costs. The Trustees project that the share of HI cost that can be financed with HI dedicated revenues will decline slowly to 75 percent in 2047, and will then stay about flat. HI non-interest income less HI expenditures is projected to be negative this year (as it has been in every year since 2008), and then turn positive for six years (2015-2020) before turning negative again in 2021.
The projected HI Trust Funds long-term actuarial imbalance is smaller than that of the combined Social Security trust funds under the assumptions employed in this report. The estimated 75-year actuarial deficit in the HI Trust Fund is 0.87 percent of taxable payroll, down from 1.11 percent projected in last years report. The HI fund again fails the test of short-range financial adequacy, as its trust fund ratio is already below 100 percent and is expected to decline continuously until reserve depletion in 2030. The fund also continues to fail the long-range test of close actuarial balance. The HI 75-year actuarial imbalance amounts to 23 percent of tax receipts or 19 percent of program cost.
The improvement in the outlook for HI long-term finances is principally due to lower-than-expected spending in 2013 for most HI service categories, which reduced the base period expenditure level about 1.5 percent and contributed to the Trustees decision to reduce projected near-term spending growth trends. Taken together, these changes lowered the actuarial deficit by about 0.29 percent of taxable payroll. Other changes resulted in an increase in the actuarial deficit of 0.05 percent.
Unlike in past years, the Medicare Part B cost projection featured in this report and summarized below (the projected baseline) assumes that reductions in Medicare payment rates for physician services called for by the Sustainable Growth Rate (SGR) formula will be overridden in the future as they have been from January 2003 through March 2015. Specifically, the projected baseline assumes that physician payment rates will remain at their current levels through the end of 2015, and will then rise at the same rate currently slated for the 10-year period ending March 31, 2015 (0.6 percent annually) through 2023. Relative to the current-law projection featured in the 2013 report, this change in the conceptual basis for the baseline projection raises the growth rate of projected Part B costs by about 0.3 percentage points on average over the next 75 years. While legislation overriding physician fee reductions has in recent years included provisions offsetting the 10-year cost of the overrides, the division of those offsets between Medicare savings and savings in other parts of the budget has varied. Because it is difficult to anticipate the extent to which policy makers will finance future overrides with other Medicare savings, the Medicare projected baseline does not include any offsets. This projection represents neither a legislative prediction nor a policy recommendation by the Trustees.
The Trustees project that Part B of Supplementary Medical Insurance (SMI), which pays doctors bills and other outpatient expenses, and Part D of SMI, which provides access to prescription drug coverage, will remain adequately financed into the indefinite future because current law automatically provides financing each year to meet the next years expected costs. However, the aging population and rising health care costs cause SMI projected costs to grow steadily from 1.9 percent of GDP in 2013 to approximately 3.3 percent of GDP in 2035, and then more slowly to 4.5 percent of GDP by 2088. General revenues will finance roughly three-quarters of these costs, and premiums paid by beneficiaries almost all of the remaining quarter. SMI also receives a small amount of financing from special payments by States and from fees on manufacturers and importers of brand-name prescription drugs.
The Trustees project that total Medicare costs (including both HI and SMI expenditures) will grow from approximately 3.5 percent of GDP in 2013 to 5.3 percent of GDP by 2035 and will increase gradually thereafter to about 6.9 percent of GDP by 2088.
In recent years U.S. national health expenditure (NHE) growth has slowed relative to historical patterns. There is uncertainty regarding the extent to which this slowdown in the rate of cost growth reflects one-time effects of the recent economic downturn and other non-persistent factors or structural changes in the health care sector that may produce additional cost savings in the years ahead. The Trustees are hopeful that U.S. health care practices are in the process of becoming more efficient as providers anticipate a future in which the rapid cost growth rates of previous decades, in both the public and private sectors, do not return. Indeed, the Trustees have revised down their projections for near-term Medicare expenditure growth in response to the recent favorable experience. In addition, the methodology for projecting Medicare finances had already assumed a substantial long-term reduction in per capita health expenditure growth rates relative to historical experience, to which the Affordable Care Acts cost-reduction provisions would add substantial further savings. Notwithstanding recent favorable developments, both the projected baseline and current law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.
Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible. Taking action sooner rather than later will leave more options and more time available to phase in changes so that the public has adequate time to prepare.
By the Trustees:Secretary of the Treasury,
and Managing Trustee
of the Trust Funds.
Sylvia M. Burwell,
Secretary of Health
and Human Services,
and Trustee.
Charles P. Blahous III,
Secretary of Labor,
and Trustee.
Carolyn W. Colvin,
Acting Commissioner of
Social Security,
and Trustee.
Robert D. Reischauer,
The most immediate financing challenge facing any of the trust funds is the projected depletion of the Social Security Disability Insurance (DI) Trust Fund in late 2016. For Social Security as a whole as well as Medicare, projected long-range costs are not sustainable with currently scheduled financing and will require legislative action to avoid disruptive consequences for beneficiaries and taxpayers. If lawmakers act sooner rather than later, they can consider a wider array of options and more time will be available to phase in the changes, giving the public adequate time to prepare. Earlier action would also provide more opportunity to ameliorate any adverse impacts on vulnerable populations, including lower-income workers and people already significantly dependent on program benefits.
What Are the Trust Funds? Congress established trust funds managed by the Secretary of the Treasury to account for Social Security and Medicare income and disbursements. The Treasury credits Social Security and Medicare taxes, premiums, and other income to the funds. There are four separate trust funds. For Social Security, the Old-Age and Survivors Insurance (OASI) Trust Fund pays retirement and survivors benefits and the DI Trust Fund pays disability benefits. (OASDI is the designation for the two trust funds when they are considered on a theoretical combined basis.) For Medicare, the Hospital Insurance (HI) Trust Fund pays for inpatient hospital and related care. The Supplementary Medical Insurance (SMI) Trust Fund comprises two separate accounts: Part B, which pays for physician and outpatient services, and Part D, which covers the prescription drug benefit. In 2013, 47.0 million people received OASI benefits, 11.0 million received DI benefits, and 52.3 million were covered under Medicare.
The only disbursements permitted from the funds are benefit payments and administrative costs. Federal law requires that all excess funds be invested in interest-bearing securities backed by the full faith and credit of the United States. The Department of the Treasury currently invests all program revenues in special non-marketable securities of the U.S. Government which earn a market rate of interest. The balances in the trust funds, which represent the accumulated value, including interest, of all prior program annual surpluses and deficits, provide automatic authority to pay benefits.
What Were the Trust Fund Results in 2013? A summary of trust fund operations is shown in the following table. The OASI and SMI Trust Funds showed a net increase in asset reserves in 2013; reserves in the DI and HI Trust Funds declined.
Reserves (end of 2012) | $2,609.7 | $122.7 | $220.4 | $67.2 |
Income during 2013 | 743.8 | 111.2 | 251.1 | 324.6 |
Cost during 2013 | 679.5 | 143.4 | 266.2 | 316.7 |
Net change in Reserves | 64.3 | -32.2 | -15.0 | 7.9 |
Reserves (end of 2013) | 2,674.0 | 90.4 | 205.4 | 75.1 |
Note: Totals do not necessarily equal the sum of rounded components.
The following table shows payments, by category, from each trust fund in 2013.
Category (in billions) | OASI | DI | HI | SMI |
Benefit payments | $672.1 | $140.1 | $261.9 | $313.1 |
Railroad Retirement financial interchange | 3.9 | 0.6 | — | — |
Administrative expenses | 3.4 | 2.8 | 4.3 | 3.7 |
Total | 679.5 | 143.4 | 266.2 | 316.7 |
Note: Totals do not necessarily equal the sum of rounded components.
Trust fund income, by source, in 2013 is shown below.
Source (in billions) | OASI | DI | HI | SMI |
Payroll taxes | $620.8 | $105.4 | $220.8 | — |
Taxes on OASDI benefits | 20.7 | 0.4 | 14.3 | — |
Beneficiary premiums | — | — | 3.4 | $73.3 |
Transfers from States | — | — | — | 8.8 |
General Fund reimbursements | 4.2 | 0.7 | 0.9 | 4.3 |
General revenues | — | — | — | $232.5 |
Interest earnings | 98.1 | 4.7 | 9.3 | 2.4 |
Other | — | — | 2.4 | 3.7 |
Total | 743.8 | 111.2 | 251.1 | 324.6 |
Note: Totals do not necessarily equal the sum of rounded components.
In 2013, Social Securitys cost continued to exceed the combined programs tax income and also continued to exceed its non-interest income, a situation that the Trustees project to continue throughout the long-range period (2014-88) and beyond. The 2013 deficit of tax income (Table 3, first two lines) relative to cost was $76 billion.
In 2013, the HI fund used $9 billion of interest income (Table 3) and $15 billion of asset reserves (Table 1) to finance expenditures beyond those that could have been made solely on the basis of tax and premium income. For SMI, transfers from the General Fund of the Treasury, which are set prospectively based on projected costs, represent the largest source of income. Part B spending was lower than anticipated in 2013 resulting in an $8 billion increase in account asset reserves (Table 1).
What is the Outlook for Future Social Security and Medicare Costs in Relation to GDP? One instructive way to view the projected costs of Social Security and Medicare is to compare the costs of scheduled benefits and administrative costs for the programs with the gross domestic product (GDP), the most frequently used measure of the total output of the U.S. economy (Chart A). Under the intermediate assumptions employed in the reports and throughout this Summary, costs for the programs increase substantially through 2035 when measured this way because: (1) the number of beneficiaries rises rapidly as the baby-boom generation retires; and (2) the lower birth rates that have persisted since the baby boom cause slower growth of the labor force and GDP. Social Securitys projected annual cost increases to about 6.2 percent of GDP by 2035, declines to 6.0 percent by 2050, and remains between 6.0 and 6.1 percent of GDP through 2088. Under the projected baseline,, 1 Medicare cost rises to 5.4 percent of GDP by 2035, largely due to the rapid growth in the number of beneficiaries, and then to 6.9 percent in 2088, with growth in health care cost per beneficiary becoming the larger factor later in the valuation period.
In 2013, the combined cost of the Social Security and Medicare programs equaled 8.4 percent of GDP. The Trustees project an increase to 11.5 percent of GDP in 2035 and 13.0 percent of GDP by 2088. Although Medicare cost (3.5 percent of GDP) was smaller than Social Security cost (4.9 percent of GDP) in 2013, the gap closes gradually until 2052, when Medicare is projected to be the more costly program. During the final decade of the long-range projection period, Medicare is about 12 percent more costly than Social Security.
The projected costs for OASDI and HI depicted in Chart A and elsewhere in this document reflect the full cost of scheduled current-law benefits without regard to whether the trust funds will have sufficient resources to meet these obligations. Current law precludes payment of any benefits beyond the amount that can be financed by the trust funds, that is, from annual income and trust fund reserves. In years after trust fund depletion, the amount of benefits that would be payable is lower than shown, as described later in this summary, because benefit cost exceeds annual income. In addition, the projected costs assume realization of the full estimated savings of the Affordable Care Act. As described in the Medicare Trustees Report, the projections for HI and SMI Part B depend significantly on the sustained effectiveness of various current-law cost-saving measuresin particular, the lower increases in Medicare payment rates to most categories of health care providersand assume that SGR physician payment reductions scheduled under current law will be overridden.
What is the Outlook for Future Social Security and Medicare HI Costs and Income in Relation to Taxable Earnings? Since the primary source of income for OASDI and HI is the payroll tax, it is informative to express the programs incomes and costs as percentages of taxable payrollthat is, of the base of worker earnings taxed to support each program (Chart B). Both the OASDI and HI annual cost rates rise over the long run from their 2013 levels (13.97 and 3.55 percent). Projected Social Security cost grows to 17.14 percent of taxable payroll by 2037, declines to 16.89 percent in 2050, and then rises gradually to 18.19 percent in 2088. The projected Medicare HI cost rate rises to 5.11 percent of taxable payroll in 2050, and thereafter increases to 5.56 percent in 2088. HI taxable payroll is almost 25 percent larger than that of OASDI because the HI payroll tax is imposed on all earnings while OASDI taxes apply only to earnings up to an annual maximum ($117,000 in 2014).
The OASDI income ratewhich includes scheduled payroll taxes at the current 12.4 percent level, taxes on benefits, and any other transfers of revenues to the trust funds excepting interest paymentswas 12.77 percent in 2013 and increases slowly over time, reaching 13.29 percent in 2088. Annual income from the taxation of OASDI benefits will increase radually relative to taxable payroll as a greater proportion of Social Security benefits is subject to taxation in future years, but will continue to be a relatively small component of program income.
The HI income ratewhich includes payroll taxes and taxes on OASDI benefits, but excludes interest paymentsrises gradually from 3.28 percent in 2013 to 4.29 percent in 2088 due to the Affordable Care Acts increase in payroll tax rates for high earners that began in 2013. Individual tax return filers with earnings above $200,000, and joint return filers with earnings above $250,000, pay an additional 0.9 percent tax on earnings above these earnings thresholds. An increasing fraction of all earnings will be subject to the higher tax rate over time because the thresholds are not indexed.
How Will Cost Growth in the Different Parts of Medicare Change the Sources of Program Financing? As Medicare cost grows over time, general revenue and beneficiary premiums will play an increasing role in financing the program. Chart C shows scheduled cost and non-interest revenue sources under the projected baseline for HI and SMI combined as a percentage of GDP. The total cost line is the same as displayed in Chart A and shows Medicare cost rising to 6.9 percent of GDP by 2088.
Projected revenue from payroll taxes and taxes on OASDI benefits credited to the HI Trust Fund increases from 1.4 percent of GDP in 2014 to 1.8 percent in 2088 under the projected baseline, while projected general revenue transfers to the SMI Trust Fund increase from 1.4 percent of GDP in 2014 to 3.3 percent in 2088, and beneficiary premiums increase from 0.5 to 1.2 percent of GDP. The share of total non-interest Medicare income from taxes falls substantially (from 41 percent to 28 percent) while general revenue transfers rises (from 43 to 52 percent), as does the share of premiums (from 14 percent to 18 percent). The distribution of financing changes in part because in Parts B and Dthe Medicare components that are financed largely from general revenuescosts increase at a faster rate than Part A cost under the Trustees projections. By 2088, the projected HI deficit represents 0.5 percent of GDP and there is no provision under current law to finance that shortfall through general revenue transfers or any other revenue source.
The Medicare Modernization Act (2003) requires that the Board of Trustees determine each year whether the annual difference between program cost and dedicated revenues (the bottom four layers of Chart C) under current law exceeds 45 percent of total Medicare cost in any of the first seven fiscal years of the 75-year projection period, in which case the annual Trustees Report must include a determination of excess general revenue Medicare funding. The Trustees made that determination every year from 2006 through 2013, but because the difference between program cost and dedicated revenues is not expected to exceed the 45 percent threshold during fiscal years 2014-20, there is no such determination in this years report.
What are the Budgetary Implications of Rising Social Security and Medicare Costs? Concern about the long-range financial outlook for Medicare and Social Security often focuses on the depletion dates for the HI and OASDI trust fundsthe times when the projected trust fund balances under current law will be insufficient to pay the full amounts of scheduled benefits. A more immediate issue is the effect the programs have on the unified Federal budget prior to depletion of the trust funds.
Chart D shows the excess of scheduled costs over dedicated tax and premium income for the OASDI, HI, and SMI trust funds expressed as percentages of GDP. Each of these trust funds operations will contribute increasing amounts to Federal unified budget deficits in future years. General revenues pay for roughly 75 percent of all SMI costs. Until 2030, interest earnings and asset redemptions, financed from general revenues, will cover the shortfall of HI tax and premium revenues relative to expenditures. In addition, general revenues must cover similar payments as a result of growing OASDI deficits through 2033.2
In 2014, the projected difference between Social Securitys expenditures and dedicated tax income is $80 billion. For HI, the projected difference between expenditures and dedicated tax and premium income is $25 billion. 3 The projected general revenue demands of SMI are $248 billion. Thus, the total General Fund requirements for Social Security and Medicare in 2014 are $352 billion, or 2.0 percent of GDP. Redemption of trust fund bonds, interest paid on those bonds, and transfers from the General Fund provide no new net income to the Treasury, which must finance these payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.
Chart D shows that the difference between cost and revenue (expressed as a percentage of GDP) from dedicated payroll taxes, income taxation of benefits, and premiums will grow rapidly through the 2030s as the babyboom generation reaches retirement age, under the assumption that scheduled benefits will be paid even in the absence of an increase in dedicated tax revenues. 4 This imbalance would result in vastly increasing pressure on the unified Federal budget, with such financing requirements equaling 4.4 percent of GDP by 2040.
What Is the Outlook for Short-Term Trust Fund Adequacy? The reports measure the short-range adequacy of the OASI, DI, and HI Trust Funds by comparing fund asset reserves at the start of a year to projected costs for the ensuing year (the trust fund ratio). A trust fund ratio of 100 percent or morethat is, asset reserves at least equal to projected cost for the yearis a good indicator of a funds short-range adequacy. That level of projected reserves for any year suggests that even if cost exceeds income, the trust fund reserves, combined with annual tax revenues, would be sufficient to pay full benefits for several years.
By this measure, the OASI Trust Fund is financially adequate throughout the 2014-23 period, but the DI Trust Fund fails the short-range test because its trust fund ratio was 62 percent at the beginning of 2014, with projected depletion of all reserves in late 2016.
The HI Trust Fund also does not meet the short-range test of financial adequacy; its trust fund ratio was 76 percent at the beginning of 2014 based on the years anticipated expenditures, and the projected ratio does not rise to 100 percent within five years. Projected HI Trust Fund asset reserves become fully depleted in 2030. Chart E shows the trust fund ratios through 2040 under the intermediate assumptions.
The Trustees apply a less stringent annual contingency reserve test to SMI Part B asset reserves because (i) the financing for that account is set each year to meet expected costs, and (ii) the overwhelming portion of the financing for that account consists of general revenue contributions and beneficiary premiums, which were 73 percent and 25 percent of total Part B income in calendar year 2013. Part D premiums paid by enrollees and the amounts apportioned from the General Fund of the Treasury are determined each year. Moreover, flexible appropriation authority typically established by lawmakers for Part D allows additional General Fund financing if costs are higher than anticipated, limiting the need for a contingency reserve in that account.
What Are Key Dates in OASI, DI, and HI Financing? The 2014 reports project that the DI, OASI, and HI Trust Funds will all be depleted within the next 25 years. The following table shows key dates for the respective trust funds as well as for the hypothetical combined OASDI trust funds.5
OASI | DI | OASDIa | HI | |
Year of peak trust fund ratiob | 2011 | 2003 | 2008 | 2003 |
First year outgo exceeds income excluding interestc | 2010 | 2005 | 2010 | 2021 |
First year outgo exceeds income including interestc | 2022 | 2009 | 2020 | 2023 |
Year trust funds are depleted | 2034 | 2016 | 2033 | 2030 |
a Column entries represent key dates for the hypothetical combined OASI and DI funds.
b Dates pertain to the post-2000 period.
c Dates indicate the first year that a condition is projected to occur and to
persist annually thereafter through 2088.
DI Trust Fund asset reserves, which have been declining since 2008, are projected to be fully depleted in 2016, as reported last year. Payment of full DI benefits beyond 2016, when tax income would cover only 81 percent of scheduled benefits, will require legislation to address the financial imbalance. Lawmakers may consider responding to the impending DI Trust Fund reserve depletion, as they did in 1994, solely by reallocating the payroll tax rate between OASI and DI. Such a response might serve to delay DI reforms and much needed financial corrections for OASDI as a whole. However, enactment of a more permanent solution could include a tax reallocation in the short run.
The OASI Trust Fund, when considered separately, has a projected reserve depletion date of 2034, one year earlier than in last years report.
The theoretical combined OASDI trust funds have a projected depletion date of 2033, unchanged from last years report. After the depletion of reserves, continuing tax income would be sufficient to pay 77 percent of scheduled benefits in 2033 and 72 percent in 2088.
The OASDI reserves are projected to grow in 2014 because anticipated interest earnings ($99 billion in 2014) still substantially exceed the non-interest income deficit. This years report indicates that annual OASDI income, including payments of interest to the trust funds from the General Fund, will exceed annual cost every year until 2020, increasing the nominal value of combined OASDI trust fund asset reserves. The trust fund ratio (the ratio of projected reserves to annual cost) will continue to decline gradually (Chart E), as it has since 2008, despite this nominal balance increase. Beginning in 2020, net redemptions of trust fund asset reserves with General Fund payments will be required until projected depletion of these reserves in 2033.
The projected HI Trust Fund depletion date is 2030, four years later than reported last year. Under current law, scheduled HI tax and premium income would be sufficient to pay 85 percent of estimated HI cost in 2030 and 77 percent by 2088.
This report anticipates that in 2014 the HI Trust Funds non-interest income deficit ($22 billion) will exceed projected interest earnings ($8 billion), requiring the use of $14 billion in asset reserves. Non-interest income is projected to exceed cost for 2015 through 2020 as the economic recovery continues, followed by increasing annual shortfalls of non-interest income through the remainder of the long-range projection period.
What is the Long-Range Actuarial Balance of the OASI, DI, and HI Trust Funds? Another way to view the outlook for payroll tax-financed trust funds (OASI, DI, and HI) is to consider their actuarial balances for the 75-year valuation period. The actuarial balance measure includes the trust fund asset reserves at the beginning of the period, an ending fund balance equal to the 76th years costs, and projected costs and income during the valuation period, all expressed as a percentage of taxable payroll for the 75-year projection period. Actuarial balance is not an informative concept for the SMI program because Federal law sets premium increases and general revenue transfers at the levels necessary to bring SMI into annual balance.
The actuarial deficit represents the average amount of change in income or cost that is needed throughout the valuation period in order to achieve actuarial balance. The actuarial balance equals zero if cost for the period can be met for the period as a whole and trust fund asset reserves at the end of the period are equal to the following years cost. The OASI, DI, and HI Trust Funds all have long-range actuarial deficits under the intermediate assumptions, as shown in the following table.
Actuarial deficit | 2.55 | 0.33 | 2.88 | 0.87 |
The Trustees project that the annual deficits for Social Security as a whole, expressed as the difference between the cost rate and income rate for a particular year, will decline from 1.29 percent of taxable payroll in 2014 to 1.06 percent in 2017 before increasing steadily to 3.95 percent in 2037. Annual deficits then decline slightly through 2050 before resuming an upward trajectory and reaching 4.90 percent in 2088 (Chart B). The relatively large annual variations in deficits indicate that a single tax rate increase for all years starting in 2014 sufficient to achieve actuarial balance would result in sizable annual surpluses early in the period followed by increasing deficits in later years. Sustained solvency would require payroll tax rate increases or benefit reductions (or a combination thereof) by the end of the period that are substantially larger than those needed on average for this reports long-range period (2014-88).
The Trustees project that the HI cost rate will exceed the income rate in 2014 by 0.11 percent of taxable payroll, followed by a period of small tax-income surpluses in 2015 through 2021. Deficits subsequently re-emerge to grow rapidly with the aging of the baby boom population through about 2045, when the annual deficit reaches 1.23 percent of taxable payroll. After 2050, the annual deficits level off through 2088 at approximately 1.30 percent of taxable payroll.
The financial outlooks for both OASDI and HI depend on a number of demographic and economic assumptions. Nevertheless, the actuarial deficit in each of these programs is large enough that averting trust fund depletion under current-law financing is extremely unlikely. An analysis that allows plausible random variations around the intermediate assumptions employed in the report indicates that OASDI trust fund depletion is highly probable by mid-century.
How Has the Financial Outlook for Social Security and Medicare Changed Since Last Year? Under the intermediate assumptions, the combined OASDI trust funds have a projected 75-year actuarial deficit equal to 2.88 percent of taxable payroll, 0.16 percentage point larger than last years estimate. The anticipated depletion date for the theoretical combined asset reserves remains 2033. The actuarial deficit increased by about 0.06 percent of payroll due to advancing the valuation date by one year and including the year 2088. The remaining increase in the deficit is due primarily to changes in methods, assumptions, and starting values.
Medicares HI Trust Fund has a long-range actuarial deficit equal to 0.87 percent of taxable payroll under the intermediate assumptions, 0.24 percentage point smaller than reported last year. This improvement is primarily due to lower projected spending for most HI service categoriesespecially for inpatient hospitalsthat reflects lower-than-expected spending in the projection base year (2013) and other recent data, lower utilization assumptions for inpatient hospitals, and lower case mix assumptions for skilled nursing facilities and home health agencies. The projected date of depletion of the HI Trust Fund is now 2030, four years later than reported last year.
How Are Social Security and Medicare Financed? For OASDI and HI, the major source of financing is payroll taxes on earnings paid by employees and their employers. Self-employed workers pay the equivalent of the combined employer and employee tax rates. During 2013, an estimated 163 million people had earnings covered by Social Security and paid payroll taxes; for Medicare the corresponding figure was 167 million. Current law establishes payroll tax rates for OASDI, which apply to earnings up to an annual maximum ($117,000 in 2014) that ordinarily increases with the growth in the nationwide average wage. In contrast to OASDI, covered workers pay HI taxes on total earnings. The scheduled payroll tax rates (in percent) for 2014 are:
OASI | DI | OASDI | HI | Total | |
Employees | 5.30 | 0.90 | 6.20 | 1.45 | 7.65 |
Employers | 5.30 | 0.90 | 6.20 | 1.45 | 7.65 |
Combined total | 10.60 | 1.80 | 12.40 | 2.90 | 15.30 |
The Affordable Care Act applies an additional HI tax equal to 0.9 percent of earnings over $200,000 for individual tax return filers, and on earnings over $250,000 for joint return filers.
Payments from the General Fund currently finance about 75 percent of SMI Part B and Part D costs, with most of the remaining costs covered by monthly premiums charged to enrollees or in the case of low-income beneficiaries, paid on their behalf by Medicaid for Part B and Medicare for Part D. Part B and Part D premium amounts are determined by methods defined in law and increase as the estimated costs of those programs rise.
In 2014, the Part B standard monthly premium is $104.90. There are also income-related premium surcharges for Part B beneficiaries whose modified adjusted gross income exceeds a specified threshold. In 2014 through 2019, the threshold is $85,000 for individual tax return filers and $170,000 for joint return filers. Income-related premiums range from $146.90 to $335.70 per month in 2014.
In 2014, the Part D base monthly premium is $32.42. Actual premium amounts charged to Part D beneficiaries depend on the specific plan they have selected and average around $31 for standard coverage. Part D enrollees with incomes exceeding the thresholds established for Part B must pay income-related monthly adjustment amounts in addition to their normal plan premium. For 2014, the adjustments range from $12.10 to $69.30 per month. Part D also receives payments from States that partially compensate for the Federal assumption of Medicaid responsibilities for prescription drug costs for individuals eligible for both Medicare and Medicaid. In 2014, State payments will cover about 10 percent of Part D costs.
Who Are the Trustees? There are six Trustees, four of whom serve by virtue of their positions in the Federal Government: the Secretary of the Treasury, the Secretary of Labor, the Secretary of Health and Human Services, and the Commissioner of Social Security. The other two Trustees are public representatives appointed by the President and confirmed by the Senate: Charles P. Blahous III, Research Fellow at the Hoover Institution and Senior Research Fellow at the Mercatus Center, and Robert D. Reischauer, President Emeritus and Distinguished Fellow of the Urban Institute.
2 As noted earlier in this summary, if trust fund depletion actually occurred as projected for HI in 2030 and for OASDI in 2033, each program could pay benefits thereafter only up to the amount of continuing dedicated revenues. Chart D, by contrast, compares dedicated sources of tax and premium income with the full cost of paying scheduled benefits under each program. In practice, lawmakers have never allowed the asset reserves of the Social Security or Medicare HI trust funds to become depleted.
3 This difference is projected on a cash rather than the incurred expenditures basis applied elsewhere in the long-range projections, except where explicitly noted otherwise.
4 As previously noted, this scenario would require a change in law to allow for the timely payment of all scheduled benefits upon trust fund depletion.
5 HI results in this section of the Summary are on a cash rather than the incurred expenditures basis.
For the past several years, the annual Trustees Reports have warned lawmakers and the public of the financing shortfalls facing the Social Security and Medicare programs, emphasizing that continued delay in legislating corrective measures is likely to make the challenge ever more difficult to resolve and result in undesirable consequences. Notwithstanding the enactment of the Affordable Care Act (ACA) in 2010 and the recent slowdown in the growth of national health expenditure (NHE) and Medicare spending, further legislative changes will be required to ensure Medicares financial sustainability. While Social Security has not been the object of significant financing reforms since 1983, its need for additional measures has been recognized for over two decades. Now, in the middle of the second decade of the 21st century, the adverse consequences of delaying necessary corrections in both programs are beginning to be realized. The most immediate financing threat facing either program is the impending depletion of Social Security Disability Insurance (DI) Trust Fund reserves in late 2016. This is the closest that any of the separate trust funds has come to depletion in over two decades. The major component of the solution to the last reserve depletion crisis, enacted in 1994, was to reallocate payroll taxes from the Old-Age and Survivors Insurance (OASI) Trust Fund to the DI Trust Fund. This response reflected the fact that, at that time, the DI Trust Fund faced both a more immediate and relatively larger shortfall than did the OASI Trust Fund.
The present situation is very different from that of 1994. While there are administrative issues and policy concerns unique to DI, the DI funds currently projected depletion is, to a great extent, related to financing pressures that afflict both the OASI and DI Trust Funds. Of the two funds, OASI faces the larger long-term imbalance between income and obligations. The earlier depletion date of the DI Trust Funds reserves largely reflects the fact that the baby boomers have been aging through the years of high disability incidence before reaching the ages at which they are eligible for OASI benefits. As baby boomers receiving DI benefits reach Social Securitys full retirement age, the costs of their benefits shift from DI to OASI, increasing costs for the latter trust fund. The DI Trust Funds impending reserve depletion signals that the time has arrived for reforms that strengthen the financing outlooks for OASI and DI alike.
The urgency of addressing the financial challenges facing both programs is underscored by the fact that the financing shortfall in the theoretical combined Social Security trust funds has now grown to a size substantially greater, even relative to todays larger economy, than the shortfall corrected in the landmark bipartisan Social Security amendments of 1983. Those reforms, which included a six-month delay in cost-of-living adjustments, exposing benefits to income taxation for the first time, requiring new Federal employees to join the system and pay payroll taxes, raising the age of eligibility for full retirement benefits, accelerating a previously scheduled payroll tax increase, and other measures, were intensely controversial and difficult to enact. It is sobering to consider that financing corrections today would require more significant measures than those. Furthermore, the longer corrective action is put off, the more severe the measures will have to be and the fewer the cohorts who can be asked shoulder a portion of the burden. Unless Social Securitys historical financing structure is to be altered to finance some or all of the program from the Federal governments General Fund on a permanent basis, and thereby weaken the historical tie between individual contributions and benefits, legislators must act to eliminate this financing shortfall. This task becomes progressively more difficult, and therefore less assured of success, with each passing year.
Long before the reserves of the OASI and HI Trust Funds are depleted, the finances of Social Security and Medicare will be challenging because of the growing pressure these programs exert on the Federal budget. This is a central concern from the standpoint of program financing because the reserves of each of the various trust funds are invested wholly in U.S. Treasury securities. Monitoring interactions between the trust funds and the General Fund is one of our core duties. When lawmakers created the public trustee positions in 1983 pursuant to a recommendation of the Greenspan Commission, that commission made its recommendation to create public trustees in the investment procedures section of its report, rather than in those sections pertaining to actuarial balance. While the Greenspan Commission presented different opinions on the issue of whether Social Security should be included within the unified Federal budget, members of the commission agreed that it was important that Social Securitys impact on the budget be laid out in a transparent fashion. The minority advocated for Social Securitys impact thereon to be seen more clearly while the majoritys arguments included making clear the effect and presence of any payments from the General Fund of the Treasury to the Social Security program. Indeed, our public trustee positions exist in large part because of lawmakers concern that the economic and fiscal implications of the trust funds buildup and drawdown be fully understood and properly managed. One of the first actions taken by the programs original two public trustees in 1985, the year of their first report, was to direct a study of these implications in response to the concerns.
Resources for Social Security and Medicare trust fund interest payments, asset redemptions, and other General Fund paymentsmost notably those for SMImust be found in competition with other spending and borrowing within the unified Federal budget, while Federal lawmakers maintain the ability to change the programs benefit and tax schedules as warranted by broader fiscal considerations. Accordingly, a thorough assessment of the degree of risk associated with scheduled benefit payments cannot be limited solely to assessing the level of reserves present in the trust funds, but also requires cognizance of the degree of pressure such payments will place on other components of the Federal budget. The rising cost of Medicare has long strained the Federal budget largely because the preponderance of Medicare SMI expenditures is financed from the General Fund. Pressure arising from increasing Social Security expenditures attained a new significance when program costs began to exceed incoming tax revenue in 2010. In 2013, these programs costs together required $357 billion (2.1 percent of GDP) from the General Fund.
Whether one regards the Medicare financing challenge to be more or less serious than Social Securitys depends on the perspective taken. Of the two programs, Social Security has the larger actuarial imbalance and the reserves of one of its two trust funds (DI) are in more imminent danger of depletion. On the other hand, Medicares long-term cost growth is still projected to exceed Social Securitys, and its operations stand to place greater strain on the Federal budget. As with Social Security, legislative actions of a significant magnitude will be required to place Medicare on a sound financial footing.
Upon the release of last years Trustees Report, and in the months afterward, questions arose as to whether a recent slowdown in national health expenditure growth may indicate less urgency in legislating Medicare financing corrections than suggested by our intermediate projections. Unfortunately, this is not the case. The Trustees projections have long assumed that over the long term NHE growth will slow relative to historical trends. Overlaying the ACAs required reductions in Medicare reimbursement rates on top of this projection methodology means that in the later decades of our long-range valuation period (2014-88) we project that per capita spending growth in many categories of Medicare payments will slow markedly relative to per capita GDP growth. Clearly it is to be hoped that NHE growth will continue to slow and that cost-saving mechanisms in current law will prove effective and sustainable. However, even with the assumption of decelerating spending growth Medicares financing shortfall, like Social Securitys, remains a reality warranting legislative corrections.
With this, our fourth annual reports as Public Trustees, we are once again pleased to vouch for the integrity of the process by which the Trustees projections are developed. We appreciate the dedication and skill of the capable staff that the ex officio Trustees have assigned to help develop these reports and the sophisticated analysis that lies behind the projections. While unanticipated economic and demographic developments and legislative changes will mean that actual results will differ from these projections, we believe the Trustees deliberation process is one fully deserving of public confidence.

subset: commoncrawl


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How Stevie Nicks 'Accidentally' Stole a Song From Tom Petty
Stevie Nicks and Tom Petty were close friends and occasional collaborators, but there was a moment when their relationship was threatened.
As she revealed in a new interview, it was over her song "Ooh My Love," which, in its original form, was unintentionally lifted from Petty's Let Me Up (I've Had Enough) track "Runaway Trains."
"I stole that from Tom Petty — accidentally!" Nicks told Yahoo! Entertainment. "I picked up the wrong cassette at Tom's one night, a tape of Mike Campbell's instrumental demos. Tom would get them first, and then the ones he didn't want, Mike sent them to me. I accidentally arrived home one night with a cassette — I thought it was mine, but it was Tom's. It just said, '24 Demos From Mike Campbell.' It had the song that inspired 'Ooh My Love,' which became 'Runaway Train[s]' for Tom."
Listen to Stevie Nicks' 'Ooh My Love'
Listen to Tom Petty and the Heartbreakers' 'Runaway Train'
Nicks said she took the song to Fleetwood Mac "and sang my lyrics over it. We started to record. I loved it so much, I called Tom and said, 'Listen to this!' What an idiot, right? Let's play him the song you stole over the phone! Tom just starts screaming at me on the other end of the phone. I'm realizing, 'How stupid are you, Stevie?' So I had to go in the next day and tell Fleetwood Mac, 'Guess what, we can't do this song.' 'Why can't we do it?' 'Because I stole it from Tom Petty, and I'm absolutely a total criminal and a thief.'"
Nicks erased the recording, but she held on to the lyrics. "Then way later, years down the road, I sat down at the piano and tried to recall it," she said. "I wrote 'Oooh My Love' on the piano: 'In the shadow of the castle walls … ' Of course, I don't know near as many chords as Mike Campbell does. All I remembered was that distant enchanted melody. ... Me and Tom and Mike Campbell, we're like quintessentially three parts of one person."


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You can read the program essay for our 2012 screening of Pandora's Box here
By mid-October 1928, when production began on Pandora's Box in Berlin, the art of silent cinema was at its zenith. That year alone, U.S. audiences had already been treated to Buster Keaton in Steamboat Bill, Jr., Frank Borzage's Street Angel, Erich von Stroheim's The Wedding March, and Walther Ruttman's Berlin: Symphony of a City. Yet Al Jolson's voice had filled movie houses with the sound of the future just one year before, and the Jazz Age was a year away from a fatal crash. In Germany, however, the cultural and social freedoms offered by the fragile Weimar Republic remained in full swing.
A recent arrival to Berlin later recalled the scene: "… the café bar was lined with the higher-priced trollops. The economy girls walked the street outside. On the corner stood the girls in boots, advertising flagellation. Actor's agents pimped for the ladies in luxury apartments in the Bavarian Quarter. Race-track touts at the Hoppegarten arranged orgies for groups of sportsmen. The nightclub Eldorado displayed an enticing line of homosexuals dressed as women. At the Maly, there was a choice of feminine or collar-and-tie lesbians. Collective lust roared unashamed at the theatre. In the revue Chocolate Kiddies, when Josephine Baker appeared naked except for a girdle of bananas, it was precisely as Lulu's stage entrance was described by Wedekind: 'They rage there as in a menagerie when the meat appears at the cage.'"
"Wedekind" was playwright Frank Wedekind, author of Der-Erdgeist (Earth–spirit, 1895) and Die Büchse der Pandora (Pandora's Box, 1904), both of which had already been combined four times for the movie screen. The Berlin newcomer who so vividly evoked the life during Weimar was about to take the lead in the fifth version, playing Lulu, the young sexpot who precipitated the ruination of men, fortunes, and, finally, herself. When director G.W. Pabst saw Louise Brooks in Howard Hawks's A Girl in Every Port (1928), another silly flapper film that a myopic Hollywood could only seem to imagine for Brooks, he ended his two-year search for the perfect actress. By casting her above all the other German talent of the day, Pabst unwittingly launched Brooks into a three-film European career that ensured her cult status with silent film fans today.
German cinema in the late '20s was moving away from the expressionist films that had made it famous, like The Cabinet of Dr. Caligari (1919), which were heavy on fantasy and chiaroscuro lighting, to the realistic portrayals of ordinary urban life of Strassefilm, or street films. Georg Wilhelm Pabst was one of this movement's leading filmmakers. Born in what was the Austro-Hungarian Empire, Pabst began writing and producing films after World War I, making his directorial debut at the age of 37 with The Treasure (Der Schatz (1923). By the time he made his third film, The Joyless Street (Die Freudlosse Gasse, 1925), a gritty portrait of postwar Vienna featuring Greta Garbo and Asta Nielsen, he was considered among Germany's best directors.
For the Kansas native Louise Brooks, who began as a dancer with the Denishawn company and later Ziegfeld's Follies, the offer from Pabst gave her something to do after walking out on her Hollywood career. Cutting corners by cutting stars loose with the conversion to sound looming, Paramount production executive B.P. Shulberg offered to honor Brooks's contract but without giving her the raise it stipulated. Stunning the powerful mogul, she quit without hesitation, and boarded a ship for Europe.
Pandora's Box premiered at the Gloria-Palast in Berlin on February 9, 1929, to a tepid reception. German audiences were miffed at the selection of an American to play their Lulu, and she received only scant praise from critics. The film also suffered severe cuts at the hands of censor boards, who objected to Pabst's portrayal of the seductive lead character. Later in December when Pandora's Box opened in New York, U.S. audiences were subjected to a happy ending, one in which Lulu avoids death, instead joining the Salvation Army. But the freshly painted finale did nothing to mitigate the film's lambasting by the critics, one of whom wrote bluntly, "Louise Brooks cannot act. She does not suffer. She does nothing."
Pabst felt differently and, impressed by Brooks's natural acting style, coaxed her into take the starring role in Prix de Beauté (1930), a film about a typist who wins a beauty pageant, which he was writing with French director René Clair. Set to shoot in Paris, production was delayed when Clair opted instead to make Sous les toits de Paris (1930). (Prix de Beauté was eventually directed by Augusto Genina.) In the meantime, Pabst cast Brooks as the lead in Diary of a Lost Girl, another Strassefilm in which she plays an outcast who eventually finds refuge in a Weimar-era bordello. Also brutally cut by censors, the ending was changed for showings in Europe, and Diary itself became lost in the tumult of talking pictures, Black Tuesday, and the impending worldwide depression.
Excited by the "aesthetic potential of sound," Pabst had already moved on. He had cowritten Prix de Beauté to include sound sequences, and was eager to adapt Bertolt Brecht and Kurt Weill's The Threepenny Opera for the screen. Later, he spent a short stint in the U.S., directing only one picture, A Modern Hero (1934), for Warner Bros. He returned to Germany in 1939, just before the outbreak of World War II, where he stayed, making films under the Josef Goebbels-controlled Ufa. While none of his films can be called Nazi propaganda, Pabst remained productive throughout the war, and won a gold medal for best director for Komödianten at the Venice Film Festival in 1941. After the war, he immediately began to rehabilitate his reputation, making The Trial (1947), about anti-Semitism, and, later in 1955, two films about Hitler, The Last Ten Days and Jackboot Mutiny. He made his last film in 1956, Through the Forests, Through the Fields, about composer Carl Maria von Weber. Never completely forgiven for tolerating the Nazis, his place in film history improved only after the rediscovery of Louise Brooks in the mid-'50s.
Brooks had less success in movies than her beloved Pabst. She played a few roles in sound films, starring alongside John Wayne in her last, Overland Stage Riders (1938). Thereafter, she toured as a dancer, taught ballroom dancing, and eventually settled in New York City, where, fallen on very hard times, she worked briefly as a press agent for Walter Winchell and on the sales floor at Saks Fifth Avenue. Her reputation as an actress began its rehabilitation with the efforts of James Card, film curator at Eastman House, and Henri Langlois of the French Cinematheque, who united to restore Pandora's Box to Pabst's original uncensored version. Soon after its revival, Brooks began her final career, writing about film and her experiences in it. Her first article, published in 1956, was entitled "Mr. Pabst," and, while describing the making of Pandora's Box, she heaps praise on the director whom she calls a "revelation" and evokes those heady Weimar days "when Berlin rejected its reality … and sex was the business of the town." Pabst died in Austria in 1967. Brooks, whose centennial happens this year in November, died in August 1985 at 79.
Presented at SFSFF 2006 with live music by Clark Wilson on the Mighty Wurlitzer


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The EU Waste Electrical and Electronic Equipment (WEEE) Directive requires all Member EU countries to maximise the separate collection, reuse and recycling of WEEE. The UK WEEE Regulations (derived from this Directive) applies to all Electrical and Electronic Equipment (EEE) placed on the market in the UK covered by the scope of these Regulations.
Under the UK WEEE Regulations, "Producers" are required to mark all relevant EEE with a "crossed-out wheelie bin" symbol to remind consumers not to discard WEEE in the domestic waste stream. MPL Home Ltd encourages all of its customers to make note of this symbol and avoid putting any WEEE in your domestic waste bin(s) or container(s).
MPL Home Ltd supports the reuse and recycling of WEEE as there are several environmental benefits of doing so, such as: Reduction of raw material and energy usage, prevention of landfill, prevention of hazardous and/or toxic materials present in some WEEE contaminating the environment.
As a Producer under the UK WEEE Regulations, MPL Home Ltd complies with its Producer Obligations by being registered as a Member of the WeeeCare Compliance Scheme and obtaining the WEEE Producer Registration Number – WEE/KJ1688SX
Under the UK WEEE Regulations, "Distributors" are required to provide a "take-back" system which allows customers (end users) the opportunity to return (or "take-back") their WEEE to a Distributor free of charge, when supplying new EEE on a like-for-like basis.
As a B2B Producer and/or Distributor under the UK WEEE Regulations, MPL Home Ltd allows for end users of the EEE placed on the market in the UK to return WEEE back to us free of charge on a like-for-like basis for new EEE purchased. Such WEEE can be returned to the following location:
CS Ellis Ltd (MPL Home Ltd – Recycling) Unit 73-75 The Whittle Estate, Cambridge Road, Whetstone, Leicester, LE8 6LH or contact WeeeCare.
If you would prefer us to collect your WEEE from your premises, please contact us as there will be a transport charge for such WEEE from your premises and delivery of such WEEE to an Approved Authorised Treatment Facility (AATF). The charge will only cover the cost of transportation and handling and will not include any cost in relation to the treatment or reprocessing of WEEE as defined by the Regulations.
Alternatively, there is a network of recycling centres across the UK where consumers of WEEE can also take WEEE free of charge to be discarded, reused and/or recycled. The complete list of locations can be found at: www.recyclenow.com
In addition, if a retailer supplying new EEE from retail premises with a sales area relating to EEE of at least 400m², the retailer must provide for the takeback of very small WEEE free of charge to the end user, who has no obligation to buy EEE of an equivalent type.


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[gallery columns="4" ids="13562,13563,13564,13568"]
PortMiami welcomed Carnival Cruise Line's newest, largest and most innovative ship, Carnival Vista, when it arrived yesterday to kick off a year-round schedule of six- and eight-day cruises to the Caribbean.
To officially welcome Carnival Vista to its Miami homeport, Carnival Vista Captain
Stefano Battinelli and PortMiami Assistant Director Fred Wong participated in a traditional maritime plaque exchange prior to the ship's inaugural departure from Miami.
As the line's newest ship, Carnival Vista takes cruising to new heights, introducing groundbreaking features such as SkyRide, a suspended open-air cycling experience; the world's first IMAX® Theatre on a ship; Kaleid-O-Slide, the line's first water tube slide, part of the ship's massive WaterWorks aqua park; and the RedFrog Pub & Brewery featuring the first brewery on a North American-based cruise ship.
"Miami has been our home since our company's inception in 1972 and homeporting the new Carnival Vista here not only provides consumers with a convenient homeport with renovated facilities and numerous operational enhancements but speaks volumes about our confidence in growing this important market," said Christine Duffy, Carnival's president.
"We are thankful for Carnival Cruise Line's continued growth at PortMiami," said Miami-Dade Mayor Carlos A. Gimenez. "The arrival of new and innovative cruise ships such as Carnival Vista helps solidify our place as a global hub for travel and tourism, vital to the continual growth and development of our community."
"It's an exciting day at PortMiami," said PortMiami Director/CEO Juan M. Kuryla. "There's no doubt that the arrival of the Carnival Vista, Carnival Cruise Line's newest and largest cruise ship, represents a new vacation option for passengers sailing out of the Cruise Capital of the World. We're grateful to have this opportunity, and we look forward to continue strengthening our partnership with Carnival," he added.
Island-Intensive Caribbean Cruises from Miami
Carnival Vista kicked off its new schedule from PortMiami with a special six-day cruise to Grand Turk, Ocho Rios and Nassau that departed yesterday. The ship will then launch a year-round schedule of six- and eight-day cruises beginning with an eight-day voyage departing Dec. 3, 2016. Six-day cruises feature Ocho Rios, Grand Cayman and Cozumel, while a mix of different eight-day itineraries visit some of the Caribbean's most sought-after destinations, including Aruba, Curacao, Bonaire, Grand Turk, San Juan, St. Kitts, St. Maarten and La Romana (Dominican Republic).
The ship will also offer a combination of one-time voyages, including a five-day cruise departing Dec. 11 and seven-day voyages departing Dec. 17 and 24, 2016, that offer an exciting selection of ports including the Caribbean's newest destination, Amber Cove in the Dominican Republic, as well as Mahogany Bay, Grand Turk, Belize, San Juan, St. Thomas and Cozumel, depending on the itinerary.
In addition to visiting breathtaking Caribbean destinations, guests can experience all the Carnival Vista has to offer – from the colorful Havana area with tropics-inspired staterooms and suites and Family Harbor with special accommodations and a new family concierge to delicious choices like Seafood Shack and new al fresco options at the Fahrenheit 555 steakhouse, Bonsai Sushi and Cherry On Top, featuring a mixed-to-order premium ice cream bar.


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"Real racers drive straight to the finish line, those other guys just drive in circles looking for it."
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It seems like I've always been a photographer, coming from a fine arts background. I loved to draw a lot as a child and drawing throughout my school years. I was a fine arts major in college, doing a lot of portrait work. My parents, being from the old country(Germany), were not keen on me being a commercial artist so I took up photography. I found I used the same "eye" for light, composition & color that I had developed in my artwork. I turned it into a wedding & portrait business for a few years but didn't care for the business side of professional photography. I guess I just wanted to shoot. Now, in retirement, I'm free to pursue my passion without worry about selling my work. My friends & relatives are the only ones who get prints made from my favorite captures. Christmas & Birthday presents are always photographs, framed or canvas prints and are always appreciated. I love photography! :)
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Record your audio, screen and video. Capture meetings or create presentations.
This is no free trial — this is always-free recording with your FreeConferenceCall.com account.
You get the idea. Every free recording is content you can leverage to boost engagement with your target audience. Or just jog your meeting memory. So go ahead — see how easy it is to record conferences and start building a content library!
Record. Then play it back, download or share.
Educational Technology
Produce lectures for distance learners and facilitate student interaction on collaborative projects. Or, record and share virtual field trips to enrich classroom learning.
Sales Videos
Create a product demo that will get your foot in the door or a training session for customers. Upgrade the customer experience and bolster brand loyalty.
HR Trainings
Prepare a presentation for employees as a guide to sign up for benefits or create a series of presentations to explain policies to new hires.
Faith-Based Communities
Record worship, prayer or Bible studies to share with your congregation. Collaborate on content with a partner to boost engagement with the broader community.
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Patients can record remote consultations to improve information retention. Create wellness videos or improve decision-making with collaboration.
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Show donors where the money goes with real-time impact. Bring local or international partners together with this collaboration tool for nonprofits and NGOs.
The short answer: A lot. Host awesome virtual meetings or free webinars with up to 1,000 participants; video chat with family; or hop on a quick international conference call. Below find a brief features overview. And yes, it's all free.
To record audio, screen sharing and video, download the app for your device and insert account email and password.


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5 Ways Artificial Intelligence in the Workplace Can Improve Employee Experience
Customer service is not a job for the faint of heart. Reps often deal with customers who are stressed, frustrated, and generally not the nicest versions of themselves. Still, the job requires reps to be good-natured and helpful, and having the right tools in place to keep them efficient and well-informed can help agents give the best customer service possible.
That's just one advantage of artificial intelligence (AI). By using artificial intelligence in the workplace, customer service reps get the information and productivity tools they need to provide a better customer experience and, just as importantly, to have a better work experience.
Businesses have spent the past decade investing in technology and strategies to enhance the customer experience, but companies are increasingly placing greater emphasis on the employee experience as well. After all, unhappy employees can quickly lead to both unhappy customers and costly attrition.
The last thing business leaders want is to keep replacing staff due to excessive workloads and poor employee morale. One solution for how to improve employee engagement: A cloud contact center with AI capabilities.
5 Benefits of Having Artificial Intelligence in the Workplace
The benefits of AI on the employee experience are numerous. The technology provides call center employees with:
1. Easy Access to Information
In their personal lives, customer service reps have access to the latest devices and sophisticated apps with intuitive interfaces. They can find answers to nearly any question with a simple Google search or a quick chat with Siri, and they want the same functionality at work — not outdated technology, sluggish apps, and disconnected legacy systems that require toggling back and forth to answer customer questions.
With a cloud contact center that leverages a sophisticated unified communications-as-a-service (UCaaS) solution, customer service agents can get all the information they need in one place. Better yet, AI algorithms can learn to put all that information into context, providing reps with even more relevant insights into products, services, and individual customers and ultimately increasing the efficiency of the call.
2. Improved Call Routing
When customers have to repeat their inquiries to four different people before finding a customer service agent who can help, they tend to get angry or annoyed.
Voicebot APIs (and their AI-powered chatbot counterparts) can help minimize customer and employee frustration by ensuring customer service reps only get callers they're equipped to help. Rather than sending customers through seemingly endless menus of departments and options, the voicebot asks a few questions to determine what the customer needs. It can then handle simple inquiries itself or use skills-based routing APIs to pass the caller along to the best-suited human rep.
3. Real-time Analysis
Some questions are harder to answer than others, and these often require a specialist. But even a specialist can have difficulty discerning a customer's needs or emotions, and misunderstandings can lead to ineffective, time-consuming calls.
An AI integration with real-time sentiment analysis can help improve customer engagement and internal collaboration through speech analytics. The AI listens in, transcribes the call, and analyzes the customer's tone of voice and frequently used words. Leverage patterns and data that are otherwise indiscernible to create predictive models for complex human behavior.
By integrating AI into the contact center, companies can increase efficiency, streamline customer engagement, and improve employee experience, creating a more effective channel of communication that streamlines procedures.
4. Better Training
Most customer service reps want career development and opportunities for advancement. At the very least, they want to be good enough at their jobs to avoid getting fired (or getting yelled at by customers).
AI integrations like sentiment analysis use dynamic speech analytics to evaluate and better understand interactions between staff and customers — what went right and what went wrong. Leaders can use that information to better train staff, individually or as a group, creating best practices that help reps get better results. This can lead to making reps better able to handle difficult situations in the future and increasing both their confidence and job satisfaction.
5. Greater Mobility and Flexibility
One benefit of a contact center powered by cloud is that it can be virtual. Reps don't have to be in the same building or even the same state. They can access the UCaaS — and its AI-based features — from any location and any internet-connected device.
That means businesses can hire remote workers or just let responsible employees occasionally work from home. Considering flexibility is almost as important as salary to many employees and job-seekers, it can make a big difference in both hiring and retention.
By integrating AI into the contact center, companies can increase efficiency, streamline customer engagement, and improve employee experience, creating a more effective channel of communication that streamlines procedures — and making everyone happier in the process.


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We'll start this hour looking at the U.S.-Mexico border in Texas, where in recent weeks, we've seen harrowing scenes of thousands of migrants gathered in squalid conditions to seek asylum. That wave of asylum-seekers has subsided, but others are expected. And it's an issue that has perplexed one administration after the next. Joining us now to discuss is Tony Gonzales, a Republican member of the Texas Congress. His district includes Del Rio. Thank you for joining us, Congressman.
TONY GONZALES: No, thank you for having me. Look forward to today.
FADEL: So let's start with the situation in Del Rio and something you said in the midst of that urgent time. There was a moment where there were pictures of Border Patrol agents on horseback, whipping reins at Haitian migrants. And you said at that time two things that, to me, didn't necessarily reconcile. You said those agents were doing God's work, but you also said migrants should not be mistreated. Can you talk to me about what you meant and how those reconcile?
GONZALES: Yeah. So anybody who watched that segment on CNN will know that I said Border Patrol agents are doing God's work by protecting our border and keeping us safe. And I absolutely believe that, and they deserve every bit of credit. I also said in that segment that nobody should be mistreated. This is the United States of America. We are the beacon of hope. And what I saw two weeks ago in Del Rio - I was the first member there in Del Rio. What I saw at that time was the worst I have ever seen it. And sadly, things are only going to get worse.
FADEL: So let's talk about immigration reform. The Democrats are undertaking multiple attempts to pass immigration reform through by attaching it to a partisan spending bill. Why is that such a concern for Republicans?
GONZALES: A topic like immigration reform needs to be bipartisan in nature if it's going to last long term. Otherwise, you're just going to see it fail time and time again. I go back to it - you know, back in April, myself, Senator Cornyn, Republican from Texas, Senator Sinema, Democrat from Arizona, Congressman Henry Cuellar, Democrat from Texas, put together a Bipartisan Border Solutions Act that starts that conversation. It's one of many things that I believe need to be passed, but it has to happen in a bipartisan manner, and it has to start in Congress, not using or abusing the reconciliation process.
FADEL: Let's go back to the Democratic immigration reform proposals. They're very popular. About 70% favor pathway to citizenship for farm workers, for example. And yet they would get roughly zero Republican votes. Is this an obstacle to bipartisan reform?
GONZALES: When you have 1.5 million illegal immigrants come over, it is impossible to start the conversation at a pathway to citizenship. I mean, the conversation has to start with securing the border, and then it has to move towards, you know, other things that makes sense. One is increasing work visas. Look. We have shortages across our country, work shortages across industries. Folks that want to come over and live the American dream and work hard need to have an opportunity to do that.
FADEL: But the 1.5 million you mentioned - I mean, the majority of those are turned away. They don't actually cross the border.
GONZALES: The majority of them are being processed and released into the country and given court dates years down the line.
FADEL: That's not true. The majority are turned away.
GONZALES: I mean, just look in Del Rio. In Del Rio alone this year, over 250,000. migrants have crossed in Del Rio. The Secretary Mayorkas himself said a lot of the folks that were under the bridge, over 12,000 of them were released into the United States to be given a court date later.
FADEL: Be processed. Yes. But I'm talking about the larger number, the 1.5 million. The majority, the numbers show, are turned away. But we'll move on to - I want to talk about border security. Governor Greg Abbott is enforcing his own immigration rules. He's using state troopers, game wardens, National Guard to, as he says, stop border crossings. What's your reaction to the Abbott policy?
GONZALES: You know, what is happening in Del Rio is only going to continue to happen. And sadly, the - you know, the Texas governor and Texas in general - it essentially feels like they're on their own. And, you know, you see that at the local level, as well, with the mayors and the county judges and the sheriffs. And they're doing everything in their power to try to, you know, make their communities more safe. But the bottom line is this is a federal issue. These are federal policies that only when these federal policies change can things get better.
FADEL: Congressman Tony Gonzales, a Republican member of Congress. His district includes Del Rio. Thank you so much for speaking with us.
GONZALES: Thank you. Have a great day. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR's programming is the audio record.


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SmartOS Weds Open Solaris to Linux KVM Virtualization
Cloud computing software provider Joyent has released SmartOS, an operating system that combines Open Solaris technology with the Linux KVM virtualization solution. It's based on the Illumos fork of Open Solaris, a community-driven project lead by storage distributor Nexenta. Over the course of more than half a year Joyent engineers have ported Linux' KVM, which has established itself as an alternative to virtualization products such as Xen and VMware. For instance Red Hat Enterprise Virtualization is based on KVM technology. SmartOS is targeted to "everyone who runs a computer as a server", according to the FAQ, which also point out that Joyent is using SmartOS in production in their own data center.
One of the leading developers is Bryan Cantrill, who was a kernel engineer at Sun's Solaris group. After Oracle bought Sun, Cantrill has left the company and joined Joyent. Led by Joyent engineer Max Bruning, Cantrill and Robert Mustacchi helped finishing the port and did some work on profiling their software with the Solaris tracing tool Dtrace. Cantrill sees great potential in bringing together key technologies such as the ZFS filesystem and DTrace from Solaris and the lightweight KVM hypervisor from Linux. In a blog post he gives some insight into the development process. SmartOS, which is licensed under the CDDL, is supposed to fulfill that promise. The Joyent blog contains links for downloading a live ISO image of SmartOS and a howto document for installing it on a native hard disk partition.