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September 02nd, 2014

9/2/2014

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Social Security is losing hundreds of billions of dollar each year to fraud.  Payroll taxes owed by corporations are not being paid-----the responsibility for payroll taxes are being pushed onto workers illegally categorized as 'independent contractors' who do not earn enough to pay the business payroll taxes and don't.  Organized crime from around the world are hacking and soaking the Social Security trusts with false claims.  Disability claims against SS disability is soaring as the long-term unemployed are made desperate for money and seek relief from SS.  This is a wholesale attack on Social Security all involving fraud and corruption.  Do we really want to make all of Social Security online given this is how much fraud is done?  Don't we want the opposite---come down in person to SS offices to do your business?  Of course.  If field offices close the people will have harder times resolving problems as is always the case with online only customer service.  We already know that placing Medicare/health care transaction online through Affordable Care Act will create the conditions for fraud to soar......as it will for Social Security.  Think what will happen to these private myRA accounts online.

THE REASON NEO-LIBERALS AND NEO-CONS ARE CLOSING THESE OFFICES IS THAT THEY ARE ENDING SOCIAL SECURITY.


When unions and justice organizations support neo-liberals this is exactly what they are voting for.

STOP VOTING FOR NEO-LIBERALS AND RUN AND VOTE FOR LABOR AND JUSTICE SO WE CAN REINSTATE RULE OF LAW AND RECOVER ALL THIS FRAUD.

The Maryland AFSCME and Maryland AFL-CIO both supported Anthony Brown for Governor and he is THE MOST READY TO PRIVATIZE ALL THAT IS PUBLIC.  He as well as the Republican candidate will work with Obama and neo-liberals in Congress to continue this. 


Social Security Threatens To Close All Field Offices

May 22, 2014 / Jim Campana



Need to figure out whether it makes sense to retire at 62 or 65? Wondering how much your monthly Social Security benefit will be? Been married three times and wondering what that means for your benefit?

Answers have never been farther than your local Social Security office, where employees are extensively trained to give you accurate and helpful answers. There’s a reason Social Security is the most popular of all government programs.

But that will change if the Social Security Administration’s “Vision 2025” comes to pass. Bureaucrats are mulling closure of most of SSA’s more than 1,000 community field offices in the U.S., where 43 million people sought services last year.

Even as the number of visitors continues to grow, Vision 2025 would virtually eliminate face-to-face service, replacing it with Internet services and an 800 phone number.

Thirty thousand field office employees would be laid off—following nearly 11,000 positions already eliminated. When SSA sought its employees’ input for Vision 2025, they responded overwhelmingly that field offices were vital to the agency’s mission.



Re-Open Closed Offices The Social Security Works coalition, which fights to strengthen the program, is campaigning to reopen recently closed field offices in Florida, Massachusetts, New York, and California.

Director Alex Lawson says, “The public takes a Social Security office closing very badly. It always makes the local news. We want to make sure all the service cuts and office closings together make the national news.”

He points out that Social Security is under threat from many directions. Only after loud objections from the public did President Obama abandon his drive for an inferior cost-of-living formula. The office closures, service cuts, George W. Bush’s try at outright privatization—all, he says, are “part of the same Wall Street-led attack on Social Security.”

Reducing services erodes confidence in Social Security overall, he said, so the office closures threaten the future of the entire program.

Lawson pointed out that documents available at the field offices are “extremely important for accessing other services, like mortgages. A large number affected are seniors in energy assistance programs; they need to get verification of their income to qualify.”

REASSURANCE CUT

One recently abandoned service was the reassuring document you used to receive each fall, spelling out your earnings for each year of your life and telling how much Social Security you’d eventually get. You could also check it for errors. The Social Security Administration stopped sending the notices in 2011, to save $70 million per year—peanuts for an agency with a $2.8 trillion trust fund.

Jim Campana, a union officer for SSA workers, said, “There were meta-messages that were sent with these earnings records—that the worker has paid into Social Security all these years, and SSA has a record of it, and the worker may be drawing soon, and getting such-and-such an amount because of these earnings—and all this is real.

“And in the meantime the worker is protected now, for disability, and, in the event of the worker’s death, survivors are covered.”

EVERY FIVE YEARS

Pressure from the public and from Congress forced SSA to resume the paper mailings this September to people who aren’t yet receiving benefits, but they will now get them only every five years between the ages of 25 and 60 (annually after that), and only if they’ve never signed up to view their statements online.

“The statements are understated eye-openers that would tend to foster support for Social Security,” said Campana, “but they’ll do so only one-fifth as well if they come only every five years.”

—Jane Slaughter

Sign a petition against office closings here.

“Americans are going to be cheated out of what they deserve,” said Witold Skwierczynski, head of the workers’ union bargaining council. “Every Social Security beneficiary deserves the personal assistance they have paid for their entire lives.”

DON’T LEAVE YOUR HOUSE The 800 number, now plagued with long wait times, would likely be automated. Beneficiaries would have to navigate through questions before they could speak with a live representative. And the Government Employees union (AFGE) suspects SSA would outsource the call centers to other countries.

The confusing MySSA website poses its own challenges. Till now, beneficiaries have been able to get documents such as verification of Social Security numbers and verification of benefits received simply by going to a field office and asking for them.

Such records are often needed the same day, to obtain mortgages, apply for jobs, and qualify for federal aid programs. Going through the SSA website, it could take a week or more for the most common types of documents to show up in physical form in a requester’s mailbox.

And later this year, SSA already plans to stop issuing these simple verifications at field offices—requiring instead an online or phone contact, and then a wait.

“The plan makes the assumption that in the year 2025 people will want to conduct all their business via the internet and will not leave their houses,” said Matt Perlinger, a claims rep in Omaha.

“Our offices are busier than ever. People continue to demand face-to-face service in order to understand the complex program that is Social Security. It’s the caring and dedicated SSA employees that take the time to thoroughly explain these programs.”

The loss of in-person services would create a serious hardship for the millions of seniors who do not have a computer or Internet access. It would also increase the distances they will need to travel to get to whatever offices remain.

TRIPPING YOURSELF UP Skwierczynski noted that, according to surveys of SSA employees, many claimants who file on the internet make decisions that could lead to the permanent loss of benefits. SSA employees are trained to catch those mistakes.

Ryan Gurganious, a claims rep for the disabled in North Carolina, cited an example: “When a disabled person is working, we’ll ask them, ‘In your job do you have any special expenses you have to pay to be able to work?’ They might say, ‘I have to get the county transportation service to come pick me up in my wheelchair, and that’s a $40 fee every month.’

“We know that that $40 comes out of the equation when we’re figuring their benefit, so they’ll get a larger SSI check. But the computer’s not going to ask them that.”

Labor Notes staffer Jenny Brown cites a personal example. Her father was originally told he was just shy of the required work credits to get Social Security benefits. He’d worked for many years for a state college that wasn’t part of the system at the time.

But an alert field office worker realized that he was also a World War II combat veteran—and a special rule for those vets put him over the limit to get a monthly check.

David Sheagley, an AFGE representative and SSA teleservice-center representative in Cleveland, notes that SSA workers “assist folks during stress-filled transitions whether it be death, disability, or retirement. In other words, our mission at SSA absolutely requires that human beings be available to talk with the public.”

Another aspect of SSA’s long-range plan is that those who use the MySSA site run risks. The New York Times reported that Experian, the private credit-data company that manages a portion of MySSA user data, was hacked by a Vietnamese criminal ring. Though SSA data were spared that time, 200 million accounts were compromised.

H.R. 3997, backed by AFGE, would put a moratorium on field office closures until SSA provides justification. The bill also requires that the community be allowed to weigh in on potential closures. The bill faces an uphill battle to reach the U.S. House of Representatives, though. As of May 9, it had only 15 cosponsors.

“No one asked for this plan,” said Skwierczynski. “These Social Security benefits belong to all Americans. Our mission is to maintain the level of benefits and service they have earned.”

DEATH BY A THOUSAND CUTS Although needs are expanding as baby boomers retire, SSA isn’t waiting for 2025. Management has already shuttered 80 field offices and reduced hours at the rest by closing at noon on Wednesdays and at 3:00 on other weekdays.

AFGE encourages union members and all who expect to receive Social Security—that is, just about everyone--to push back against Vision 2025. The afge.org/saveoursocialsecurity site includes ways to ask your lawmaker to cosponsor H.R. 3997. Site visitors can send a letter to the editor and find tools to educate their communities.

Jim Campana is an AFGE representative and works for Social Security in Michigan.

_______________________________________________

WHY IS THE GREEN PARTY THE ONLY VOICE IN OUTING NEO-LIBERALS AND OBAMA ON PRIVATIZING SOCIAL SECURITY WITH myRA? Because the Democratic Party is controlled by neo-liberals---who are not even Democrats.
Below you see my comments to a labor article but also to supposedly 'progressive' organizations that fought Chain CPI and claimed victory in petitioning but failed to say a word about Obama's using the direct route to privatization.  You can tell a neo-liberal outlet when they do not shout out for the real issues.  Chain CPI is child's play to ending SS with myRA.

You do not mention that Obama's push for Chain CPI was simply a ploy as he always intended to establish myRA to end Social Security. As groups were fighting Chain CPI and claiming victory in stopping that.....Obama simply used executive order telling Treasury to build myRA ----a Republican policy to privatize Social Security but we do not hear that from these same progressive groups. THIS POLICY KILLS SOCIAL SECURITY AND NOT A SOUND FROM LABOR AND JUSTICE.

myRA is a payroll deduction that starts as voluntary but will become the replacement for the payroll deduction that is mandatory with Social Security. myRA takes that payroll deduction and hands it to Wall Street as if it will be safe because of certain restrictions. This is the structure that Republican policy created to transfer Social Security to private hands. It is like Medicare and Medicare Advantage------Affordable Care Act guts Medicare of almost a trillion dollars and with that lots of access to health care for seniors at the same time private Medicare Advantage covers more and looks more attractive. People move to private Medicare Advantage because Federal Medicare no longer covers all people need. This eventually ends Federal Medicare and it is all done by Obama and neo-liberals pretending to fight for low-income health coverage.

We need labor and justice educating people as to what is really happening with these policies. Neo-liberals have to leave the people's Democratic Party and it will only happen if labor and justice run candidates in primaries against these global corporate pols.



Green Party on Social Security Party Platform



ObamaCare sets precedent for market-based social insurance Using a market-based model for health insurance sets a dangerous precedent. Traditional social insurances are provided by the government and are paid for through taxes.The same plan may be in the works for Social Security. In his speech, the President announced a new retirement savings program, MyRA. Although the details of MyRa are not clear, it is based on creating individual retirement accounts (IRAs) for workers who don't currently have them.

What we do know is that Social Security has been under attack throughout the President's time in office. Rather than doing what is needed, raising the cap, or going beyond that and raising benefits, there have been attempts to cut benefits and raise the age of eligibility. The public is being told that Social Security is in a crisis but is not being told that this 'crisis' is intentional. Unlike Social Security, IRAs are managed by financial institutions that profit from them. MyRa is another gift to Wall Street by President Obama.

Source: Green Party response to 2014 State of the Union , Jan 30, 2014

Opposes any privatization of Social Security The Green Party opposes any privatization of Social Security whatsoever. We oppose raising the retirement age above 65 years. Source: 2008 Green Party Platform from 2008 Chicago Convention , Jul 13, 2008

Don’t privatize Social Security The Green Party opposes the “privatization” of Social Security. The Social Security trust fund, contrary to claims being made by Republican and Democrat candidates, is not about to “go broke” and does not need to be “fixed” by Wall Street. The alleged demise of Social Security benefits is based on the wildly pessimistic assumption that the economy will grow only 1.8% annually over the next three decades. At a more realistic 2.4% a year, the fund is flush for the next 75 years.Considering that the bottom 20% of American senior citizens get roughly 80% of their income from Social Security, and that without Social Security nearly 70% of black elderly and 60% of Latino elderly households would be in poverty, it is critical that the public protections of Social Security are not privatized and subjected to increased risk based on misleading projections of shortfalls

___________________________________________


I want to point out that Warren is a neo-liberal and supports Bill and Hillary Clinton and global corporations and markets. So, as she makes good progressive points, she seems to support the very pols that will move the privatization of all that is public forward. Please look closely at the big picture with pols......let's wait to see if Warren walks the talk and thank her for her current voice on important issues.

I also want to point out that I have been shouting this since 2010 State of the Union address.  We are only hearing it now in most media outlets----2014.

Please think about your labor and justice leaders that are saying nothing-----believe me, your national leaders know what is happening.


Wednesday, Feb 12, 2014 11:57 AM EDT

Elizabeth Warren vs. the neoliberals: The battle over Americans’ retirement security The left’s plan to expand Social Security butts up against old “centrist” ideas that favor the small-bore and cheap
Michael Lind
  Salon

Elizabeth Warren (Credit: Reuters/Joshua Roberts)

In the last year or two, something remarkable has happened in American politics. After decades in which future deficits, mostly caused by healthcare costs and conservative tax cuts, were invoked by those seeking to slash Social Security benefits for reasons of ideology or pecuniary interest, the national conversation has changed. Preceded by intellectual pioneers like Atrios and Social Security Works, Sens. Tom Harkin and Mark Begich have proposed to slightly expand, rather than contract, Social Security benefits. My New America Foundation colleagues Robert Hiltonsmith, Steven Hill and Joshua Freedman and I have proposed a more radical expansion, coupled with caps on 401(k)s and other tax-favored retirement savings programs, which chiefly benefit the richest Americans. By endorsing the concept of expanding Social Security, Sen. Elizabeth Warren lent credence to an idea that has gained the support of mainstream pundits like Ezra Klein and Matthew Yglesias.

Unfortunately, nobody has told President Obama.

In a speech in Pittsburgh on Jan. 29, the president fleshed out the My Retirement Account (MyRA) proposal he mentioned in his State of the Union address. The president’s remarks begin promisingly enough:

Today, most workers don’t have a pension in America,” he added. “Just half work for an employer that offers any kind of a retirement plan. A Social Security check is critical, but oftentimes, that monthly check, that’s not enough. And while the stock market has doubled over the last five years, that doesn’t help somebody if you don’t have a 401(k).

All of this seems like a lead-up to a Warren-like endorsement of proposals to expand Social Security benefits, right? Well, no.

President Obama, you must remember, is not a progressive, notwithstanding his occasional support for progressive measures like universal pre-K or a higher minimum wage. The president is a neoliberal in the tradition of Bill Clinton and the old “New Democrats,” an “Eisenhower Democrat” not a “Roosevelt Democrat,” determined to be perceived as centrist at all costs.

And during the last generation, the formative period in which the president rose in his career in American politics, the official “centrist” position on Social Security called for cutting Social Security benefits while increasing tax-favored defined-contribution savings plans like 401(k)s and IRAs — thereby shifting risk from the government to the individual. In the echo chamber of the mainstream media, this position was portrayed as the reasonable, respectable, responsible center — midway between the irresponsible right, which sought to completely abolish Social Security and replace it with tax-subsidized private accounts, and the allegedly irresponsible left, which sought, not to expand benefits, but merely to pay Americans the future Social Security benefits they have been promised.

Call these three schools of thought about Social Security, from right to left, the abolitionists, the cutters and the defenders. The defenders of present-day Social Security, from the 1980s until recently, have been treated as representing the furthest acceptable liberal position. During the last few decades, those who occasionally proposed going beyond merely defending Social Security from the cutters and the abolitionists, and suggested actually boosting benefits to some degree, were excluded from the elite conversation. They were not invited to panel discussions; they were not asked to join commissions; they were not subsidized by think tanks; they were ignored by the major media. The Social Security expanders were treated as members of the lunatic fringe, as though they were Trotskyists proposing the nationalization of industry or Bryanite agrarian populists demanding a bimetallic currency.

This powerful orthodoxy undoubtedly explains Obama’s own position on Social Security — which is that of a cutter. In an earlier budget the president endorsed a favorite proposal of the Social Security cutters — using chained CPI, an alternate measure of inflation, as a stealthy, indirect way of cutting benefits for most working-class and middle-class elderly (on the evident assumption that they would be too ill-informed to notice that their benefits had cumulatively been cut).

Typically members of the Cut Social Security school combine proposed cuts in benefits with this or that expansion of the ever-proliferating number of tax-favored private savings schemes and a few generous-sounding token subsidies to the poor. America’s Cutter-in-Chief Obama is no exception. Having already proposed using chained CPI to cut Social Security benefits, he now proposes yet another tax-favored defined-contribution scheme that is supposed to help the poor in particular.

Obama’s MyRA proposal (already being pronounced “Myra” as in Gore Vidal’s famous transsexual Myra Breckinridge, rather than “My RA”) is an unintentional parody of Clinton-Obama neoliberalism. To satisfy the requirements of classic neoliberalism, a proposal has to meet the following tests:

  • It must be symbolic rather than serious. Rather than actually solve a major social or economic problem, the policy should merely signal that the neoliberal politician “feels your pain.”
  • It must be small-bore and cheap. A token gesture of neoliberal reform must not cost very much money, because, in the words of Bill Clinton, “The era of big government is over” and neoliberals do not want to be confused with big-government tax-and-spend progressives.
  • It must be unnecessarily complex and easily gamed. Alexander the Great, who cut the Gordian knot with a single swipe of his sword, was more like a New Deal liberal than a New Democrat. Neoliberal Democrats are more like Michael Meyers’ Dr. Evil, who prefers devising an overly complicated death by contraption for an enemy he could dispatch more quickly and simply with a bullet. Neoliberals love what the political scientist Steven Teles calls “kludgeocracy” — that is, the design of public policy equivalents of Rube Goldberg machines.
  • If possible, it must funnel money from taxpayers to rent-seekers in the FIRE (Finance, Insurance, Real Estate) sector, where the donors behind neoliberal Democrats tend to be found. Neoliberals never want government to carry out a program directly, simply and cheaply, when it could be contracted out at greater expense to fee-collecting private corporations or banks or, as in the case of the Affordable Care Act/Obamacare, to rent-seeking private insurance companies, who might, just might, recycle some of their rents as campaign contributions to serving politicians or corporate board pay to former officials.
President Obama’s MyRA proposal meets all four criteria. It is the reductio ad absurdum of token, small-bore, unnecessarily complicated and crony-capitalist Democratic neoliberalism.

To begin with, Myra (as we’ll call her henceforth) is symbolic, cheap and small-bore. The president proposes that qualifying employees be allowed to hold some safe government securities for a maximum of 30 years or a mature investment of $15,000. Divide $15,000 by 30 years of retirement and you get $500 a year or an extra $41.66 a month. I’m sure the poor elderly will be grateful for the small but kind neoliberal gesture.

Myra is also unnecessarily complex and subsidizes the money-management industry. As Michael Hiltzik points out in the L.A. Times, “Once the accounts reach $15,000 in value, they would have to be rolled over into a conventional Individual Investment Account. That’s a sop to the financial services industry, which makes billions from managing IRAS.” But from the perspective of neoliberal Democrats, who raise far more money from Wall Street than their progressive rivals, a program for the poor that incidentally subsidizes the fee-raking money manager elite is ideal. In the words of Gore Vidal, the creator of the other Myra, the American system is socialism for the rich, capitalism for the poor.

Sadly, this is the kind of thing that we have come to expect from President Obama, at least when it comes to retirement security. His idea of a centrist, after all, is the right-wing Republican Alan Simpson, whom the president appointed to co-chair his National Commission on Fiscal Responsibility and Reform, and who described Social Security as being “like a milk cow with 310 million tits!”

The good news is that the national conversation about Social Security seems to be changing, even if the Obama White House has not received the memo.

Nobody but a few libertarian die-hards and dead-enders still hopes for the complete replacement of Social Security by a radically new system of private accounts. George W. Bush’s push for mere partial privatization of Social Security stalled because of resistance from Republicans in the Republican-controlled Congress. The dream of the ’90s privatizers lives on only in the Portlandias of the right like the Cato Institute and AEI.

If the Social Security privatizers drop out of the conversation, and the Social Security expanders muscle their way in, the entire debate changes. Suddenly the position of Social Security cutters like President Obama ceases to be the centrist position and becomes the new right-wing extreme position. At the same time, the defenders of Social Security as it now exists — formerly the utmost respectable left — find themselves positioned at the new center, while the Social Security expanders — formerly the lunatic fringe — become the respectable center-left with arguments that must be taken seriously. And that’s real progress.

Michael Lind is the author of Land of Promise: An Economic History of the United States and co-founder of the New America Foundation.



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June 20th, 2014

6/20/2014

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THIS IS A LONG POST BUT PLEASE GLANCE THROUGH TO THE END-----IT IS VERY IMPORTANT TO SOCIAL SECURITY AS OUR LAST RETIREMENT ASSET.  AS ALL OTHER WEALTH ASSETS WERE STOLEN THROUGH FRAUD OR CORPORATE BANKRUPTCY SCHEMES----WE NEED EXPANDED SOCIAL SECURITY WITH STRONG MONTHLY PAYMENTS TO ALLOW SENIORS SAFETY FROM POVERTY.


CINDY WALSH FOR GOVERNOR OF MARYLAND IS THE ONLY CANDIDATE SHOUTING FOR SOCIAL SECURITY AND THE ONLY ONE THAT WILL NOT PRIVATIZE IT!

Today, I want to remind folks that neo-liberals are working with neo-cons to end Social Security even as both republican and democratic voters are shouting they want these programs kept healthy.  So, as Cummings, Mikulski, and Cardin, Sarbanes and Van Hollen shout against Chain CPI------against cuts in Social Security monthly payments-------the Federal Reserve has been manipulating inflation rates to zero so as to reek havoc on our social benefits and to allow Federal Reserve policy like QE and zero interest to continue long after inflation rates climb to unacceptable levels.

Now, if I see fire in a theater and do not yell fire and dozens of people die -----am I guilty of neglect?  OF COURSE I AM GUILTY.

IF YOUR POLS HAVE NOT BEEN SHOUTING THAT THE FEDERAL RESERVE AND THE OBAMA ADMINISTRATION HAS BEEN DELIBERATELY USING MANIPULATED DATA TO SUBSTANTIALLY LOWER SENIOR'S SOCIAL SECURITY PAYMENTS----NOT TO MENTION VETERANS AND OTHER PENSIONS TIED TO INFLATION----THEY ARE WORKING WITH WALL STREET IN CUTTING YET ANOTHER PUBLIC WEALTH ASSET ILLEGALLY.
  They do that because they are neo-liberals, not democrats.


This article below is a great example of how the Federal Reserve is manipulating the inflation figures to give zero and 1% inflation when everyone knows inflation is greater than 5%.  I do disagree with this author's assessment of 2% inflation on food.  It feels far higher than that.  Whole Foods is now called 'Whole Paycheck'.

What neo-liberals and neo-cons have done over a few decades is allow the Federal Reserve to change the way it calculates inflation and when Bernanke and Obama came on board, neo-liberals turned to openly manipulating the heck out of inflation numbers just as Wall Street banks use market manipulations to boost profits.  Calculating Cost of Living and inflation in ways that do not reflect current conditions means you do not have a legitimate government.  We would have to look closely at law to determine it illegal.  Politicians take an oath of office that states they are to protect the American people.  These rogue pols we have in office think it funny that power has been captured to the point we cannot stop this open assault on our wealth.  The problem is that there are 300 million of us and maybe a few million people working for the rogue few.  Simply vote these pols out of office by running and voting for labor and justice candidates in all primaries.

A democratic government does not manipulate figures to hurt its citizens-----that is an autocracy.




'Various estimates of what the annual rate would have been over the past four years 
if earlier methods of calculation had been continued come up with numbers in the 5%-to-10% range'.


As this article shows the CPI is connected to lower wages leveling rising costs to give this lower inflation rate.  That does not mean we are not experiencing high inflation-----it simply means our low wages off-set those prices by not allowing us to purchase things.  This in turn creates the conditions of stagnation-----US citizens cannot purchase or consume so the economy is stagnant.  This is how neo-liberals and neo-cons are deliberately keeping the economy stagnant as they expand overseas earning billions of dollars in profit while moving US citizens deeper into poverty.

Economy & Policy

If There’s No Inflation, Why Are Prices Up So Much? Many of the costs faced by typical American households are rising faster than the official inflation statistics indicate.

By Michael Sivy @MFSivyMarch 12, 2013  Time



Last week, I ran out of ink for my printer and ordered some more online. My computer automatically pulled up the previous order, and I was shocked to see that the price of the ink cartridges I was buying had gone up 25%. To my mind, ink always seems overpriced. Manufacturers sell printers cheaply because they know that they can make lots of money on the ink. For the same reason, John D. Rockefeller’s Standard Oil is said to have sold millions of cheap kerosene lamps in order to make big profits selling kerosene. But since ink cartridges were already priced way above cost and official statistics show little general inflation, why had ink gone up 25% in less than a year?

Price hikes for a particular item here or there don’t qualify as inflation. If one thing gets more expensive but something else gets cheaper, that’s what economists call a relative price change. Inflation is a simultaneous increase in prices across the board. Some measures of inflation, such as the GDP Deflator, track price changes that affect businesses as well as those that affect consumers. But the Consumer Price Index is supposed to focus on inflation at the consumer level. And the CPI has recorded minimal increases over the past four years. Since the recession ended, the 12-month change in consumer prices has averaged 2% and has never been as high as 4%.


There are lots of other ways to gauge inflation, however, that give very different signals. Gold was $930 an ounce when the recession ended, and today it’s $1,583. So if you believe in the gold standard, prices have increased 70% in four years – or an annualized rate of 14.2%. Of course, many economists dismiss the gold price as an archaic indicator. So it may be more meaningful to look at price increases over a broad range of commodities. The Reuters CRB Commodity Index, which tracks the prices of coffee, cocoa, copper, and cotton, as well as energy, is up 38% over four years, or 8.6% at a compound annual rate.

It may well be that these increases in the cost of raw materials aren’t translating into broader inflation because the economy is so weak. For sustained inflation to get going, workers have to be able to demand higher pay to make up for increases in their cost of living. And today, whatever inflation is caused by the rising cost of raw materials is being offset by below-normal increases in wages. Indeed, that’s one of the factors causing the decline in real after-tax household income that I wrote about last week.

That may result in price stability for the overall economy, but it isn’t great news for middle-class American families. It’s true that some important costs have remained moderate. Food prices may fluctuate from season to season, but overall they have risen at only a 2% compound rate since 2009. And in the current real estate market, housing costs haven’t gone up much either. Nonetheless, many of the everyday costs that Americans face have risen a lot.

The price of gasoline has gone up from $2.60 a gallon when the recession ended to $3.68 today. That’s a 41% increase in four years, or an annualized rate of 9%. Taxes have gone up almost as much. Federal, State and Local income taxes and social charges (Social Security payroll taxes, for instance) have risen 35% over four years, an annualized rate of 7.8%.

(MORE: Not Knowing About This Credit Report Can Burn You)

Perhaps the most telling indicator – albeit a slightly facetious one – is the Big Mac index, popularized by the Economist magazine. McDonalds hamburgers are available in many countries and their prices reflect the cost of food, fuel, commercial real estate, and basic labor. The price of a Big Mac, therefore, can be used to compare the economies of different countries – or serve as a bellwether of inflation in a single country. Since the recession ended, the cost of a Big Mac in the U.S. has risen from an average of $3.57 to $4.37, or 5.2% a year.

So why haven’t these more rapid increases shown up in the Consumer Price Index? One reason is that the index itself has been modified in a variety of ways over the past 35 years. Fluctuations in home prices have been smoothed out, for example. And the index has been adjusted periodically to reflect changes in what people buy, particularly if they shift from more expensive items to cheaper ones. Such revisions to the CPI have tended to reduce the official inflation rate, on balance. Various estimates of what the annual rate would have been over the past four years if earlier methods of calculation had been continued come up with numbers in the 5%-to-10% range.

Several conclusions can be drawn from all this. First, there is no absolute and objective gauge of inflation. Any particular measure is simply one way of making the calculation, based on a host of assumptions. Second, a number of the costs that middle-class households face are going up considerably faster than the CPI. Printer-ink cartridges may be a particularly obnoxious example, but they’re not the only case where prices are rising more than official statistics indicate. At the moment, these trends aren’t highly visible because the economy is so sluggish. But as the recovery continues, there’s every reason to think that they will become more widespread.


____________________________________________

The failure to address the COLA and CPI relevancy for decades has always been met with fixes needed to keep Social Security strong.  What is called Chain E is this fix.  We had a super-majority of democrats holding both chambers of Congress and a democratic President and we could not get a vote for Chain E----because they are all neo-liberals, not democrats.

What has happened with the Federal Reserve's Bernanke and Obama is worse-----they have manipulated by no legal means the inflation to zero reeking havoc on the economy as they will no longer be able to keep the market under control when inflation cannot be hidden.  That is what is about to break loose under Yellen.  So, what is happening now supersedes the argument below between Chain E and Chain W-----it is outright criminal manipulation simply to allow Wall Street to leverage and move free money to the top in record amounts while moving you and I deeper into debt and our social benefit payments like Social Security falling substantially.  Since Obama and Bernanke came on board seniors have had several years of zero and 1% COLA increases to Social Security instead of the 3-4% for decades----- at a loss of a hundred or more dollars a month.....that is a lot especially as costs spiral at 30% or more.

This article is a good explanation of the real debate and how Chain E starts to account for current cost of living.  Please glance through to see the arguments from both sides.  Note that the increase in allotments to Social Security recipients with Chain E will maybe cut the life expectancy of the SS Trust by a few years.  The calculations saying this are conservative at best and the effects may be minimal.  So, Chain E is the policy we should see from democrats.  Only a very few in Congress are advocating it.


Current Issues in Economics and Finance Social Security and the Consumer Price Index for the Elderly

May 2003Volume 9, Number 5 Contact Author JEL classification: J14, E31 View PDF version
7 pages / 136 kb
Authors: Bart Hobijn and DavidLagakos  Federal Reserve Bank of New York

Some argue that social security benefits should be adjusted using a price index that reflects the spending habits of the elderly rather than those of workers. This study suggests that if such an index were adopted today, over the next forty years benefit levels would increase and the social security trust fund could become insolvent up to five years sooner than projected.

Social security benefits, paid monthly to almost 30 million Americans,
are automatically adjusted for inflation once a year. The goal of this cost-of-living adjustment is to prevent a decline in the purchasing power of retirees’ benefits. Under the current system, the adjustment is tied to changes in the consumer price index (CPI), the benchmark measure of inflation produced by the Bureau of Labor Statistics (BLS).

In recent years, the indexing of social security benefits to the CPI has come under considerable scrutiny. Many policymakers and academics have argued that the CPI overstates price changes for individual goods and services,1 while others have questioned the techniques used to combine these changes into an aggregate measure. In this edition of Current Issues, we examine another, less frequently discussed weakness of the indexing procedures—the linking of benefit changes to price movements that affect the working population rather than retirees.

Currently, adjustments to social security benefits are based on the CPI-W, a measure that captures price changes in the average set of goods purchased by urban wage earners and clerical workers. The purchasing patterns of the typical retiree differ significantly, however, from those of the typical worker: Medical care, for example, constitutes a much larger share of total expenditures for seniors.

Mindful of these differences, some have urged that social security benefits be adjusted using a price index that captures the spending habits of older Americans.2 Since the early 1980s, the BLS has calculated such an index: the consumer price index for elderly consumers (CPI-E). This experimental index has never been used to adjust benefits, however, and while several congressional bills have been put forward on the subject, none has passed.3

Our analysis addresses a simple question: How would adoption of the CPI-E to index social security benefits affect the level of benefits paid and the resources of the social security trust fund, which finances the benefits that seniors receive? Our calculations suggest that introduction of the CPI-E would present policymakers with a serious trade-off: By choosing to maintain the purchasing power of seniors over time, they would accelerate the projected insolvency of the social security trust fund, known officially as the Old-Age and Survivors Insurance (OASI) trust fund.

We find that between 1984 and 2001—the years for which data are available—annual inflation under the CPI-E was on average 0.38percent higher than it was under the CPI-W, with medical care accounting for much of the difference.4 Accordingly, we estimate that if the CPI-E had been adopted in 1984, the average benefit in 2001 would be 3.84percent higher, or roughly $408 more per year per recipient. Our calculations also reveal that if the index were adopted today, the OASI trust fund could become insolvent five years sooner than the currently projected 2043, provided that inflation for the elderly continues to exceed inflation for workers at the average annual rate observed between 1984 and 2001.


Differences between the CPI-W and the CPI-E


If inflation rates under the CPI-W and CPI-E tended to coincide in any given year, then the economic implications of switching to the CPI-E would be minimal. However, as Chart1 illustrates, important differences do exist.5 Most significantly, for all years in our data except 1999, CPI-E inflation was higher than CPI-W inflation, with an average annual difference of 0.38percent. It is worth noting that this difference was higher in the early period of our sample than in more recent years. Specifically, in the 1984-93 period, it was 0.50percent, and in the 1994-2001 period, 0.22percent.

The underlying reason for these differences can be found largely in the weights of the major goods categories that make up each index—weights that represent the share of total expenditures that each category constitutes (seetable). Housing represents a much larger weight for the elderly, 45.9percent, than the 37.6percent for urban workers. Similarly, medical care makes up 10.24percent of the CPI-E, compared with 5.06percent of the CPI-W. Each of the other major categories has a smaller weight in the CPI-E—in fact, transportation, education, and food have substantially smaller weights for the elderly.

To identify the categories most responsible for the difference in inflation under the two indexes, we recalculate for each category what the difference would have been if that category had been excluded from both indexes. These counterfactual differentials help explain which categories increase and which diminish the CPI-E–CPI-W difference.

Chart2 presents our results. The bar corresponding to each category represents the counterfactual CPI-E–CPI-W differential that results from excluding only that category from each index. Note that by excluding any category that increases the CPI-E–CPI-W differential, we obtain a counterfactual difference that is smaller than the currently observed average of 0.22percent. Likewise, the exclusion of any category that decreases the difference gives a counterfactual that is larger than the actual difference.

From the chart, we see that housing, apparel, medical care, recreation, and transportation have increased the CPI-E–CPI-W differential between 1994 and 2001. As expected, medical care is the largest single contributor to the difference, owing to the fact that seniors spend more on this category than do workers and that medical care has experienced much higher than average inflation over our sample period. The same is true for housing. Apparel, transportation, and recreation, however, are categories with below-average inflation, upon which seniors spend less in general than do workers. It follows, then, that these categories increased the CPI-E–CPI-W differential.

Conversely, the categories education, food, and other (made up largely of tobacco products) tended to reduce the difference between the indexes. Education did so primarily because the typical senior spends less than the typical worker on college tuition, which has experienced above-average inflation since 1994. The same holds true for “food away from home” and cigarettes, which are components of food and other, respectively: both are higher inflation goods upon which seniors spend less.



Maintaining the Purchasing Power of Seniors


The differences between the CPI-W and the CPI-E clearly have implications for social security recipients. We contend that adoption of the CPI-E would increase benefits in times of above-average inflation for seniors. But by how much would they actually increase?

This question is apt to be of interest to policymakers as well as to current and future social security recipients, because the answer will suggest just how significant the benefits of CPI-E adoption will be relative to the costs. That is to say, although in theory it is worthwhile to ensure that the real value of benefits remains constant over time, in practice it is also important to confirm that declines in the real value of benefits are, or could be, substantial before a new index is employed. Differences each year of a few cents per beneficiary, for example, likely would not justify the costs to the BLS and the Social Security Administration (SSA) of calculating the CPI-E and readjusting benefits.6


We argue that increases in benefits resulting from CPI-E indexation would in fact be significant. This assertion is based on our calculation of what average OASI benefits would be today if the index had been adopted in 1984, our first year of data. We find that overall, benefits in 2001 would have been 3.84percent higher. This percentage corresponds to an average monthly benefit of $912, as opposed to the current $878, which sums to $408 annually per beneficiary.7 Thus, assuming that the CPI-E reasonably represents the spending patterns of the elderly, seniors have experienced a nontrivial drop in their spending power since 1984.

The Effect of CPI-E Indexation on the Social Security Trust Fund


The OASI trust fund, operated by the Social Security Administration, is projected to become insolvent in 2043 because of the prospective aging of the U.S. population. It is therefore important to consider the effect that adoption of CPI-E indexation might have on the fund’s future resources.


If inflation continues to be higher for the elderly than for workers, introduction of the CPI-E now would no doubt speed up insolvency. Accordingly, the question we address is, When would the OASI trust fund become insolvent if indexation were to begin today? To answer this question, we consider three possible scenarios for the fund, each with a different assumption about future differences in inflation for the CPI-E and the CPI-W.

The Social Security Administration arrives at its current estimate of fund insolvency by assuming, among other things, that future inflation will be 3percent each year. We take this to be the SSA’s best estimate of future inflation under CPI-W indexation, or equivalently, its best estimate of inflation under CPI-E indexation assuming no future difference in the CPI-E and the CPI-W. Our analysis compares this 3percent scenario with two others. We consider when insolvency would occur assuming future inflation rates of 3.38percent and 3.22percent per year—figures projected by the SSA that correspond to inflation rates for the elderly that are 0.38 and 0.22 percent higher, respectively, than the current 3percent rate under the CPI-W


For consistency with the SSA’s forecasts, we report these projections by incorporating several of the agency’s terms: the income rate, the cost rate, and the trust fund ratio. The income rate is defined as the fund’s payroll tax receipts expressed as a percentage of the taxable payroll. It is essentially the average payroll tax rate faced by contributors to the fund. For example, the income rate of the OASI trust fund in 2001 was 10.88, indicating that the average earner paid 10.88percent of his or her salary in taxes to the fund. The cost rate consists of trust fund outlays expressed as a percentage of the taxable payroll. As long as the income rate exceeds the cost rate, tax receipts will exceed outlays and the fund will accumulate assets. However, when the cost rate exceeds the income rate, the fund’s asset holdings will be diminished whenever the interest income from the assets does not cover the gap between spending and tax receipts.

Chart3 presents the income rate and the projected cost rates under our three scenarios of future inflation rates. The implicit assumption behind these scenarios is that CPI-E indexation will affect projected OASI outlays but not projected tax receipts. Therefore, the projected income rate according to our scenarios coincides with the rate projected by the Social Security Administration. What differs under the three scenarios is the projected cost rate.


Worth noting from Chart3 is that according to the current 3percent projection of inflation, the fund would start running a deficit in 2018. Under each of the other two scenarios, the fund would begin to operate at a deficit in 2017. Not evident from the chart, however, is the more important question of when the trust fund will become insolvent.

To answer this question, we introduce another key term used by the Social Security Administration: the trust fund ratio. The ratio expresses the OASI trust fund’s level of asset holdings at the end of the previous year as a percentage of the current year’s outlays. For example, a trust fund ratio of 247 in 2001 indicates that asset holdings at the end of 2000 were 2.47 times expenditures in 2001. This means that without additional income and at 2001 expenditure levels, the trust fund would remain solvent for another 2.47 years. A trust fund ratio of zero indicates that the fund would not be able to make any expenditures without additional income—the point at which we consider insolvency to occur.

The projected trust fund ratios under our three future inflation rate scenarios are depicted in Chart 4. The chart shows that the current projection for fund insolvency is 2043, which is equivalent to the scenario of adopting the CPI-E and experiencing no future difference in CPI-E and CPI-W inflation. Under the other two scenarios, however, this date will come sooner. When inflation for seniors is 0.22percent higher each year, we estimate that the fund will become insolvent in 2041--two years earlier than currently projected. When it is 0.38percent higher per year, we estimate that insolvency will occur in 2038—five years earlier.


Because the difference between inflation for seniors and for workers was lower in the later part of our sample period, it seems reasonable to consider the 0.38percent difference for the entire period as an upper bound on the future difference between the two indexes. Thus, our estimate of CPI-E indexation accelerating OASI insolvency by five years can likewise be thought of as an upper bound. Similarly, because seniors experienced higher inflation in all but one of the past eighteen years, our assumption of zero higher inflation for them in the future can reasonably be thought of as a lower bound. Therefore, our estimate of insolvency two years sooner—derived from the later years of our sample data—offers our best approximation for the future, given recent trends.

Limitations of Our Study

Our analysis has several limitations that warrant addressing. For one, it is unclear just how accurate our measurements of inflation for seniors are, since the BLS acknowledges that the sample of older Americans associated with the CPI-E is small.11 Thus, the weights used to calculate the index are potentially inaccurate, suggesting that our observed average difference in inflation of 0.38percent is inaccurate as well. Even so, it is unlikely that our fundamental observation—that seniors have experienced higher than average inflation—is inaccurate, since much of the higher inflation for seniors is attributable to medical care, an observation that we know to be reasonable. Correcting for the small sample might affect the magnitude of the difference somewhat, but in all likelihood it would not affect the sign of the difference.12


A second limitation is the scope of the CPI-E sample. The sample now consists of persons sixty-two and older, whereas OASI benefits are paid to many spouses and other, younger relatives of former beneficiaries, as well as to the retirees. There is no reason to believe that the relatives of former beneficiaries, particularly the younger ones, have expenditure patterns that match those of people sixty-two and older. Furthermore, not everyone sixty-two and older actually receives OASI benefits, although these individuals could be included in the CPI-E sample.13

Third, even if the CPI-E accurately measures the cost of living for OASI beneficiaries, our specific estimate of trust fund insolvency might still be high. This is because the Social Security Administration already predicts a higher rate of inflation for future benefit adjustments, 3.0percent per year, than the roughly 2.5percent experienced in the past two decades.
Thus, if current inflation trends continue, future benefits forecasted by the Social Security Administration would be too high. This scenario implies that the point of insolvency would be later than currently predicted, both for the SSA’s estimate using the CPI-W as well as for ours using the CPI-E.

Finally, our estimate does not incorporate the effect that expected higher benefits might have on retirement decisions. If the CPI-E was adopted, more people might retire at sixty-two instead of sixty-five. Such early retirements presumably would increase the burden on the OASI trust fund, which could bring about insolvency even sooner. Indeed, it is unclear just how prevalent this phenomenon would be, and, more significantly, how much it would burden the fund. A detailed examination of this subject would certainly be worthwhile.

Conclusions
It is widely acknowledged that the social security system is likely to run into serious funding problems—up to and including insolvency—sometime in the middle years of this century. This analysis considers the implications to the system and to retirees of basing cost-of-living adjustments to benefits on a consumer price index for elderly consumers, rather than on the current index for workers.

We find that inflation as measured by the index for the elderly has been consistently higher than inflation as measured by the index for wage earners, with a 0.38percent average annual difference since 1984. Much of the difference can be attributed to medical care, which constitutes a much larger share of total expenditures for the typical senior.

Accordingly, we estimate that if inflation for the elderly continued to be higher than inflation for workers, and if reindexing of benefits were to start today, the effect over the next forty years would be to increase social security expenses and move the trust fund as much as five years closer to insolvency than currently projected. The actual outcome would depend on how persistent higher inflation for seniors is in the future. The trade-off facing policymakers, therefore, is between prolonging the solvency of the social security trust fund and maintaining the purchasing power of seniors over time.


______________________________________

Congresswoman Brown has it right.  Social Security will be just fine even with Chain E raising benefits with just a few tweaks.  The one mentioned here and in Congress is raising the cap of payroll tax payment.  Right now people earning over $106,000 are not taxed as everyone else and need to be.  That alone would bring Social Security to where it needs to be in the long term.  Increasing payroll tax just 1% overall would assure solvency through this century.  So, we have many different people calculating the Trust fund level and its longevity----right now I do not trust those counting the Trust.  We know all of the payroll taxes since Reagan have been placed in the US Treasury and not the Trust and Reagan tripled payroll taxes just to make sure there would be enough for when baby boomers retired so it seems odd we do not have enough now.

As Congresswoman Brown states -----Social Security is a benefit that protects women the most and we do not want it privatized as neo-liberals and neo-cons are trying to do.

OBAMA'S 'MY RA' IS THAT PRIVATIZED STRUCTURE REPUBLICANS HAVE BEEN TRYING FOR DECADES TO IMPLEMENT TO END SOCIAL SECURITY.



Congresswoman Corrine Brown currently represents Florida’s Fifth Congressional District. She serves as the Ranking Member of the House Committee on Transportation & Infrastructure’s Subcommittee on Railroads, Pipelines and Hazardous Materials, and as a senior member on the Committee on Veterans Affairs.

Social Security

Ever since the Democrats created the Social Security System in 1935, it has not only formed the centerpiece around which Americans plan their retirement, but has provided piece of mind by providing benefits to both disabled workers and the children and wives of deceased beneficiaries. Currently over 3 million Floridians are receiving Social Security benefits. Including over 100,000 in my District alone.

Social Security is especially important to the millions of women who rely on it to keep them out of poverty. Elderly unmarried women, including widows, get over 50 percent of their income from Social Security. Women tend to live longer and tend to have lower lifetime earnings than men do. They spend an average of 11.5 years out of their careers to care for families, and are more likely to work part time than full time, and when they do work full time, they earn an average of 70 cents for every dollar men earn. These women are our mothers, our wives, and our daughters - and we must save Social Security for them.

Social Security benefits are also crucial to the poor and people of color;  Approximately 49 percent of African-American beneficiaries rely on Social Security for 90 percent or more of their income.

Let’s be clear. There is no immediate crisis in Social Security’s solvency and it does not contribute to the deficit. If Congress does nothing, Social Security will deliver full guaranteed benefits until at least 2037. Even after 2037, without any changes, the trust funds can pay more than 75% of benefits. That said, Congress would be prudent to begin modifying the program’s structure well before the shortfall begins.

In order for it to remain politically popular, however, Social Security must not be seen as a “welfare program.” For example, if all wages above $106,800 in 2009 were taxed and counted toward benefits, Social Security would remain 95% solvent for the next 75 years. High earners and their employers would pay more, but these top earners would also receive higher benefits. Thus, the program would continue to serve as an investment for all Americans and garner broad legislative support.

I remain strongly opposed to any plan that privatizes Social Security. I have always fought against putting Social Security funds into the stock market. The recession has shown how swings in the stock market could be devastating even for careful investors – let alone the millions of people without enough cash to open a mutual fund.

I also oppose increasing the retirement age or cutting benefits for the middle class. Although average life expectancy has increased since Social Security was created, the life expectancy for working class people has not.  Expecting them to work beyond age 65 is unnecessary and unjust.

If you need help with social security, visit my Social Security and Medicare Assistance page.



____________________________________________
Indeed, as neo-liberals pretend to fight for Social Security Obama has used executive orders to begin building the structure to privatize Social Security----my RA.  Has your pol been shouting that is what myRA is about?  I hear nothing in Maryland.  If your pol was indeed working to protect SS they would be in front of every camera and writing on their webpages how bad this policy is.

Remember, you do not have an election if a candidate runs for office on one platform and does just the opposite after elected.  Obama has not made subtle changes----he is to the right of Bush.  WE ARE NOT HAVING ELECTIONS IN THE US FOLKS----SAME THING HAPPENING IN MARYLAND POLITICS---


Keep in mind Obama is building this structure with the idea that any pol elected in 2016 will be a neo-liberal or a neo-con and continue to use this privatized plan.


Wait, wasn't privatizing Social Security a bad thing when Bush proposed it...? now it sounds like Obama is proposing the exact same thing...


of course liberals cheer wildly when Obama says it.



'In offering his new "MyRa" proposal, the President said: "MyRA guarantees a decent return, with no risk of losing what you put in."

Yes, and you can keep your doctor too.

Fool me once, shame on you. Fool me twice, shame on the voters! That's the Savage Truth'!


Wednesday, Feb 5, 2014 07:43 AM EDT  Salon

The quiet war on Social Security: Meet the dark side of MyRA

Some Democrats want to expand Social Security -- but a new effort to push 401(k)-style accounts poses a real threat David Dayen

You cannot understand the Obama administration’s new retirement savings account, known as “myRA” (short for my retirement account), without understanding the underlying dynamic inside the Democratic Party over retirement security. In this sense, myRA is a deliberate distraction from the emerging movement to expand Social Security, to ensure everyone has a measure of dignity in retirement. 

A year ago, the Social Security expansion movement was limited to dreamers, and had little to no clout on Capitol Hill. But thanks to some dogged determination, liberals began to recognize that the country stood at the precipice of a retirement crisis.
Years of conversion from defined-benefit pensions to defined-contribution 401(k)-style plans made returns uncertain and subject to the vicissitudes of the stock market (as well as the greed of mutual fund managers, who subjected accounts to high fees, eroding the balances). Meanwhile, the savings rate plummeted amid stagnant wages (indeed, the savings rate is currently at historically low levels). What was once a three-legged retirement stool – pensions, savings and Social Security – had been whittled down to one. And the only viable way to avoid a disaster of baby boomer seniors falling into mass poverty is to expand the last leg of the stool, Social Security.

This notion of expansion gradually began to pick up adherents, from activist organizations like MoveOn.org and the Progressive Change Campaign Committee to think tanks like the New America Foundation. In November, Elizabeth Warren endorsed expanding Social Security in a speech on the Senate floor. The expansion movement had some momentum, and tangible legislation from liberal Tom Harkin and moderate Mark Begich to rally behind.

It is in this context that you must place the myRA policy. The Obama administration clearly heard the growing demand to do something about retirement. In a speech in Pittsburgh the day after the State of the Union address, President Obama said that “if you’ve worked hard all your life, you deserve a secure retirement,” adding that most workers don’t have a pension anymore, and while “a Social Security check is critical … oftentimes that monthly check, that’s not enough.”

But instead of going ahead and endorsing Social Security expansion,
Obama introduced myRA, a glorified savings account deducted from your paycheck in amounts as little as $5. It’s portable from job to job, and it earns a small amount of interest, the same as the Thrift Savings Plan for government workers. The account can never go down in value, and it’s backed by the full faith and credit of the U.S. government. Plus, you can withdraw the funds whenever you want without a penalty.

This is a nice thing to have, but has little to do with retirement. Americans don’t need a new savings account vehicle; they need higher wages so they can actually manage to save a few dollars out of every paycheck.

The accounts are capped at $15,000: After that, the account holder must roll them into a Roth IRA, subjecting the money to the whims of the market – and handing it over to Wall Street fund managers. You can see myRA in this context as a veal fattening pen for small savers before they get led into the Wall Street slaughterhouse. The administration has yet to finish the Department of Labor’s fiduciary rule, which would force investment advisers to act in the best interests of their clients. Until that gets done, it’s foolhardy to funnel more savings into Wall Street’s hands.

The administration would tell you that the myRA is a small-ball solution merely because it was all they could accomplish without Congress’ involvement, and that it’s a good first step, to get people to think about saving for retirement. But you have to understand what the administration wants Congress to do about retirement security. The president said it in his Pittsburgh speech: “Let’s fix an upside-down tax code that right now gives the wealthiest Americans big tax breaks to save, but does almost nothing for middle-class folks, doesn’t give them the same kinds of tax advantages … And we need to give every American access to an automatic IRA on the job, so they can save at work.”

The president rightly calls out retirement tax preferences that flow to the wealthy; in fact, these subsidies are massive – over $140 billion a year – and the New America Foundation study on expanding Social Security identifies them as a source of revenue that could pay for the entire expansion. But that’s not what the president wants to do. He wants the middle class to get the same kind of subsidies so they can open their own IRAs – automatically enrolled IRAs, in fact (a behavioral economics nudge, to force people to invest). He wants to double down on a failed system where retirement savings are leashed to the stock market.

That’s the real battle over retirement security inside the Democratic Party. The Obama wing wants the private market – in this case, private retirement accounts – to solve the problem, while the progressive wing wants government to act and deliver a defined benefit through Social Security. Given that Social Security, even in its current state, is the most effective anti-poverty program in America, and 401(k)-style accounts have hastened a crisis, I know which approach I would choose.

It’s pretty clear, then, that myRA is an effort to distract from the burgeoning Social Security expansion movement,
 offering an alternative that remains grounded in the private market, to throw liberals off the trail. In fact, in a perfect example of how allergic the administration is to using government solutions in this area, even the myRA – a simple savings account – will be run by a private-sector money management firm. The White House chooses not to see how a government program that has been efficiently run for over 75 years can do the job of delivering dignity in retirement, without having to build a better mousetrap.

It’s fine to want to make the current mess of the employer-based retirement account system better – the aforementioned Tom Harkin has a bill to do just that – but liberals shouldn’t take their eye off the prize. They have the simplest, easiest-to-explain solution to this crisis:
expand Social Security, and use the hundreds of billions in retirement tax preferences to pay for it. Anything less is a poor substitute.

_______________________________________________

Heather Mizeur is taking Obama's my RA privitization of Social Security to the state level with her version of retirement savings that will eventually eliminate the state contribution to payroll tax payments.  Remember, your Social Security payroll contributions have both a Federal and State contribution, so Mizeur is working with Obama in privatizing both.

Mizeur is a neo-liberal running as a progressive.  Ending Social Security---how progressive is that?


Sure we face an unsure future Heather----Wall Street is stealing all of our wealth assets----AS YOU KNOW! 

Simply rebuilding our domestic economy to end the capture global corporations have on our economy will end the boom and bust recessions.  Simply rebuilding oversight and accountability to recover tens of trillions of dollars in wealth assets stolen through corporate fraud will send our wealth back to you and me.


Provide a Secure Retirement for All Marylanders


After working for their entire lives, Marylanders deserve a secure and dignified retirement. Under our current system, too many workers face an uncertain future. By establishing a state-run savings option, we can make it easier and more affordable for Marylanders to save for a secure retirement.

Read Heather's plan to create a state-run retirement savings fund.




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April 15th, 2014

4/15/2014

0 Comments

 
THE SAME CORPORATIONS RECEIVING MILLIONS OF DOLLARS IN CORPORATE TAX BREAKS FROM NEO-LIBERALS IN MARYLAND ARE THE SAME ONES MOST GUILTY OF PAYROLL AND WORKPLACE FRAUDS THAT COST ALL MARYLAND CITIZENS THEIR SOCIAL SECURITY, MEDICARE, PUBLIC SERVICES, AND MANY PEOPLE THE ABILITY TO SIMPLY EARN A LIVING.




Have you noticed that corporate NPR/APM says nothing about the Affordable Care Act ending Medicare and Medicaid as Federal programs and having a goal of creating global health institutions that will operate like Wall Street banks?  It is their job to make sure the public receives what is called DIS-INFORMATION or what NPR likes to call TRUTHINESS/SPIN.  Our public media was the source of real public interest information but was taken corporate and now simply uses taxpayer money as a corporate subsidy.

Today, NPR did the same with Social Security and again they used airtime to promote the privatization of Social Security with the policy of myRA.  Employers contributing matching funds to a private payroll deduction that goes into a 401k plan?  REALLY?????  Do you know there is a shortfall in Social Security and private pensions not only from fraud but from the fact that corporations have failed to make their contributions.  With no Federal oversight of payroll payments retirement plans have been left without legally required contributions.  See why the 1% are telling us the American people have no retirement savings?
The face of this report was another person of color telling what are largely workers of color to do something that is really, really bad for them.....placing your money in a 401k plan and allow what will become mandatory payroll deductions.  The people depending on Social Security the most....are low-wage earners and it is this same group that will lose the most as this social safety net is ended by corporate neo-liberals like Hillary and Obama.  Although the low-wage earners are the ones who will suffer most, all Americans know and love Social Security whether democrat or republican so this move to end all social programs including Medicare and Social Security by neo-liberals will not stand. Keep in mind as well that corporate NPR/APM has gone from being a voice of the people to telling the people what will happen.  This is state media not public media.

The Reagan Administration tripled the amount of payroll taxes taken from our wages back in the 1980s just so there would be plenty for the baby boomers when they retired......the Social Security Trust is flush with money so ignore the spin as we get corporate pols out of office to secure these funds.

Let's take a look at where all those Trust funds went to see how we are going to recover money to those Trusts! 

I've spoken earlier about pension fraud and the need to recover this.....with Wall Street systemically criminal you do not want your retirement in 401k plans.  Wall Street uses these plans as fodder and their value is lost every several years and with economic implosions you never increase the value/or lose money in these market plans.

Social Security Chief: Women Live Longer, So They Should Save Early


April 15, 2014 3:21 AM ET 6 min 28 sec NPR


Acting Social Security Commissioner Carolyn Colvin at a news conference last year. She says women need to start saving for retirement early in their careers.

Charles Dharapak/AP The Social Security Administration distributes retirement benefits to nearly 60 million Americans. And of those beneficiaries, nearly 60 percent are women.

The SSA is led by a woman, too. Carolyn Colvin was once retired herself, collecting benefits from the agency she now serves. A call from President Obama brought her back in 2010, and she recently took over as acting commissioner. As part of Morning Edition's look at the , Colvin spoke with Kelly McEvers about how women plan for financial security.

Colvin points out two realities she hopes women consider when planning for retirement. First, women make less money than men on average; when they stop working, their monthly Social Security checks are smaller, too.

Also, women tend to live longer than men. Colvin encourages women to estimate their own life expectancy with the , and find out more . Doing so, she says, often makes women realize they can outlive their savings — and that retirement benefits alone won't be enough.

Interview Highlights On men's vs. women's retirement benefits

The average amount (in 2014) is a little over $17,000 per year for men and a little over $13,000 per year for women. One of the reasons that women are likely to have lower lifetime benefits is because they often have lower lifetime earnings than men. They are more likely than men to take time out of the workforce to care for family members. And of course we still have the issue of gender inequality [in wages].

“ Many women will say they don't have the ability to save, and what I say is that they cannot afford not to save.

On the importance of personal savings

Social Security was never intended to be the primary source of retirement.
It was to be one of three legs on a stool, we always say. ... And then, of course, private pension and savings. And we know now that many of the private pensions have been reduced. Some women work in jobs where they really don't have a private pension, and of course many women — particularly low-income wage earners — find themselves just not saving as much as they should in order to ensure that they are able to have a decent income during retirement.

On ways women can plan for the future

One of the things we try to focus on is encouraging women, even at very young ages, to begin to save. ... Many women will say they don't have the ability to save, and what I say is that they cannot afford not to save.

For me, I had to find a way of saving where I would not in fact use that money later. And so I found, for me, real estate was the key. I also found that it did not make sense to leave money on the table, so for every job I've worked where there has been an opportunity for the employer match, I've maximized that.

The most important thing is you need to spend below your means. Maybe it's giving up soda, or giving up cigarettes. ... And then each time they get a raise, don't take that raise. Put it into a 401(k). They haven't gotten used to spending it. It's there. And it will grow.
___________________
You can tell the quality of media programming if everything they report has the words 'scam' attached to it.  As this article shows, between outright fraud, fees, and mismanagement----there are no benefits to placing your money in 401k plans.  Corporate media is selling this for Wall Street because Wall Street has lost all of its overseas business because it is known worldwide as being criminal.  Corporate pols now need more domestic money coming into the stock market.

So, why is Obama creating myRA as the replacement for Social Security------a republican plan to end all social programs?  Neo-liberals and neo-cons are global corporate pols working for wealth and profit.....they do not care about quality of life.

Below you see a recommendation of pensions over 401k, but with no oversight in pension management by government even this once safe investment plan is constantly defrauded.


The 401k Scam
Author: Nathaniel Downes July 7, 2012 2:31 pm


The Demos report is an eye opener as to the hidden costs which cause 401k programs to not only fail to keep up with inflation, but to fall behind even the base amount invested into these funds.

What they found was that, for the projected samples that the 401k would lose over $155k for its entire lifetime. Since the entire sample fund at the time of retirement would be $320k, that means a full third of the money which was put into the system was taken by the 401k itself in the guise of fees.

How does this work you may ask? The report goes into detail, but we shall give a simplified example here.

First, your 401k funds are typically put into mutual funds, so let us first address those.

If you put $10,000 into a mutual fund which lists a 3% return, it sounds good, yes? But that is after the fees are deducted. These fees are listed as a percentage of your total investment, but they are deducted from the revenue generated. You get $300 added to the $10,000, but that was after the $150 in “expense ratio,” mutual fund fees such as marketing fees, management fees, and administration feeds, as well as $150 in direct transaction fees have been removed. Your $10,000 had earned $600, but half of that was eaten up in fees. And it does this each and every year. $300 every year for 40 years gives you $12,000 in total fees deducted, more than your original investment.


Then there is the 401k itself, which has its own fees associated with the program. These fund ratio fees are typically around 1%, but over the life of the 401k this adds up to a substantial lump sum.


That original $10,000 over the 40 years of the fund ended up at just over $22,000. Without those fees, it would have been just over $102,000. That is a huge shortfall. Even if you invest an additional $10,000 every year, you are not catching up to this shortfall, as the $1.7 million the fund should have is reduced to $640k, a loss of over a million dollars. And that is if there has been no economic slowdown during the intervening 40 years, which an reduce the principal even further while not reducing the fees associated with that. In a downturn, the fees make the losses even more pronounced than they were before as a result.


Now, I used a high fee rate, typically double the average large mutual fund but not the highest fee currently in the market (which as of the time of writing is 1.53%, held by the HDGE Active Bear ETF Profile Fund according to my research), to best demonstrate the amount lost to these fees.

By comparison, a pension plan is a form of insurance, similar to what you would find for your automobile or your healthcare. Money taken in is used to pay out for those who have met the qualifications for payment. Many of these systems use surplus funds to invest in stable, fixed investments, such as treasury bonds. Social Security works in this manner, surplus funds paid in go into a special trust fund filled with US Treasury Notes, pre-paid cash in effect. The trade-off for this is that the amounts paid out are not directly owned by the individual, they are a large pool that all tap into.

A US Treasury Note, similar to one used by the Social Security Trust

By doing this, the overhead fees are minimal, typically under 1%, and as the amount is not accruing nor are large numbers of transactions being handled, this is not reapplied to the same funds repeatedly as with a mutual fund. As a result, a funded pension plan is far more likely to weather economic hardships without difficulty.

When planning ones retirement, risk is the last word you want to hear.

___________________________________________
Make no mistake, the groups proposing the idea of expanding Social Security are sometimes not as progressive as they seem, but this is in fact the way to recover all the losses to the Social Security Trusts and the pension that were raided.  The assumption is this-----

YOU HAVE TAKEN ALL OF OUR PENSIONS, HOUSES, AND SAVINGS SO WE WILL NOW USE SOCIAL SECURITY AS OUR PRIMARY RETIREMENT SUPPORT.


The reason I am not comfortable with some of the groups putting forward these ideas is they never mention the recovery of fraud and public malfeasance in rebuilding these Trusts.  Do you know how much money is lost to the SS Trust just from payroll fraud-----corporations categorizing employees as independent contractors when they are not?  Over 20 million Americans fell into this category and this has happened for a decade or more.  Trillions of dollars have been lost to SS Trust with this one fraud.  So, not mentioning it in the solution-----just as not mentioning Medicare and Medicaid fraud in the solution of Expanded and Improved Medicare for All falls short as a solution.



Wednesday, Jul 24, 2013 12:12 PM EST

Growing consensus on Social Security: Expand it After staving off Obama's plan to cut benefits, progressives are fighting to boost checks to seniors

Alex Seitz-Wald




Back when “grand bargain” fever was gripping Washington earlier this year, progressive activists mounted an uphill campaign against their allies in the White House and the Capitol, warning there would be hell to pay if President Obama went forward with his plan to trim Social Security benefits.

Thanks in part to their effort, along with Republican recalcitrance and changing economic realities, Democrats have abandoned any plans to mess with the social safety net, at least for the moment. The federal deficit has fallen precipitously this year  – Treasury actually ran a surplus in June — and with it, the impetus for a “grand bargain” trading safety net cuts for increased tax revenue has evaporated. (This may have been the White House’s plan all along.)

Now, as Obama prepares to deliver a major speech on the economy today, the scrappy activists who were until recently playing defense against cuts are turning around and pushing to increase Social Security benefits.

“Social Security is the most effective anti-poverty program in history. Forget cutting it — we need to double down on success and make it even stronger,” Jim Dean, the chair of Democracy for America, will say in an email to supporters today.


The coalition of leading progressive groups, including the Progressive Change Campaign Committee, Democracy for America, Credo Action, MoveOn.org, Progressives United and Social Security Works, are joining together to back a plan introduced by Democratic Sens. Tom Harkin and Mark Begich to boost benefits and shore up Social Security’s finances for the better part of the next century.

These kinds of economic justice issues are Harkin’s bread and butter, but Begich, who is up for reelection this year in deep-red Alaska, is an interesting addition. In May, he made a splash by breaking with Obama on Social Security cuts. His leadership on this issue suggests he thinks expanding the social safety net will not only not hurt him, but actually help him politically, even in one of the most Republican states in the union.

And there’s reason to believe he’s right — Social Security is overwhelmingly popular. A new PPP poll commissioned by DFA and the PCCC found that 51 percent of Kentucky voters support the Harkin-Begich framework, which would boost benefits for 75-year-old workers by $452 per year and by $807 per year for 85-year-olds. Twenty-four percent said they didn’t support the plan, and another 24 said they weren’t sure.

Obama’s budget called for changing the way inflation is calculated for Social Security by switching to the “chained CPI” (consumer price index) formula, which would have the effect of reducing benefits. Begich and Harkin have each introduced slightly different plans, but both would also change the inflation formula. Their change, however, to the “CPI-E,” better accounts for the fact that seniors spend disproportionate amounts of their income on health care, the price of which grows faster than the price of goods overall.

To pay for this expansion, and to ensure the solvency of all of Social Security for decades into the future, the plan would eliminate the income cap on Social Security FICA taxes. Currently, income above $113,700 is exempt from the tax, meaning someone who makes $1 million a year pays the tax on only about a tenth of their income. The new poll commissioned by the groups found that 62 percent of Kentuckians support removing the cap, while 20 percent oppose it and another 18 percent are unsure.

Some liberals have criticized the idea of removing the cap, arguing that it would undermine the political strength of Social Security by making the plan more of a redistributional welfare system than a social insurance scheme. But others point out that the cap means the current Social Security tax is regressive, charging poor and middle-class Americans a larger portion of their income than millionaires and billionaires.

_______________________________________

When people hear the words 'underground economy' they think drugs and prostitution or selling of stolen goods.  It's always the poor who are placed into this category.  Yet, it is the global corporations who are now the biggest 'underground economies' in the US.  Make no mistake, the entire Gulf of Mexico economy is cash only just to avoid paying things like payroll tax and yet, these southern states take the most in social services in the country.  These citizens have been left by their politicians paid so poorly through life with no Social Security payments because of this cash economy.  The same is happening to immigrants as they and low-wage domestic workers are categorized as independent contractors illegally forced to take responsibility for the corporation's tax and insurance costs.  THIS IS HAPPENING AT AN EPIDEMIC PACE AND IT HAPPENS BECAUSE THERE IS NO GOVERNMENT OVERSIGHT OF WAGES----

YOU KNOW----DEPARTMENT OF LICENSING AND REGULATION.
People being paid almost nothing don't say anything about these frauds because they cannot afford the cost of these taxes.  Yet, it is these same people not able to claim Social Security benefits when they need them.  The poor are being duped into participating and/or are being forced to pay that which is not required because of third world government malfeasance.

If you think this is only the shrimp boat operator or the waste removal small business person-----I have spoken often that it is Johns Hopkins who outsources the jobs to corporate Human Resources businesses they know are operating illegally.  Large property management corporations are also doing this.  It is going main stream and all of this is what drives the losses to Social Security.


SEE WHY NEO-LIBERALS ARE TELLING YOU THAT SOCIAL SECURITY IS GOING BUST?  IF THOSE POSING PROGRESSIVE SOLUTIONS LIKE EXPANDED SOCIAL SECURITY ARE NOT SHOUTING THIS----THEY ARE NOT WORKING FOR REAL SOLUTIONS.


Underground Economy Operations
  • Report Payroll Tax Fraud
  • Definition of "Underground Economy"
  • What Does It Cost You?
  • EDD’s Underground Economy Operations
  • Significant UEO Program Efforts
    • Employment Enforcement Task Force
    • Labor Enforcement Task Force
    • Construction Enforcement Project
  • Joint Enforcement Strike Force
  • Annual Fraud Reports
Report Payroll Tax Fraud The Employment Development Department (EDD) has a charge to investigate businesses that avoid paying payroll taxes, many of which are part of the underground economy. If you would like to help us protect workers and create a level playing field for business competition, the EDD offers several methods for reporting such businesses:

  • Call our toll-free hotline: 1-800-528-1783
  • Fax: 916-227-2772
  • Submit a Fraud Reporting Form online
  • Mail us a UEO Lead Referral/Complaint Form, available in English (DE 660) and Spanish (DE 660/S/).
  • Help Us Fight Fraud, DE 2370
Definition of "Underground Economy" "Underground economy" is a term that refers to those individuals and businesses that deal in cash and/or use other schemes to conceal their activities and their true tax liability from government licensing, regulatory, and taxing agencies. Underground economy is also referred to as tax evasion, tax fraud, cash pay, tax gap, payments under-the-table, and off-the-books.

What Does It Cost You? A February 2005 report, California’s Tax Gap, prepared by California’s Legislative Analyst’s Office, estimates California’s income tax gap to be $6.5 billion. Reports on the underground economy indicate it imposes significant burdens on: (1) the State of California, (2) businesses that comply with the law, and (3) workers who lose benefits and other protections provided by state law when the businesses they work for operate in the underground economy.

Business: When businesses operate in the underground economy, they illegally reduce the amount of money expensed for insurance, payroll taxes, licenses, employee benefits, safety equipment, and safety conditions. These types of employers then gain an unfair competitive advantage over businesses that comply with the various business laws. This causes unfair competition in the marketplace and forces law-abiding businesses to pay higher taxes and expenses.

Workers: Employees of the businesses that do not comply are also affected. Their working conditions may not meet the legal requirements, which can put them in danger. Their wage earnings may also be less than those required by law, and benefits they are entitled to can be denied or delayed because their wages are not properly reported.

Consumers: Consumers can also be affected when contracting with unlicensed businesses. Licensing provisions are designed to ensure minimum levels of skill and knowledge to protect the consumer.

The ultimate impact is erosion of the economic stability and working conditions in this State. Our pamphlet Paying Cash Wages "Under the Table"...Is It Really Worth the Risk? outlines some of the costs and effects of cash pay on your business, your employees, and taxpayers in general. It is available in both English (DE 573CA) and Spanish (DE 573CA/S/).

EDD’s Underground Economy Operations The EDD is concerned about workers who lose benefits and other protections provided by state law when the businesses that they work for operate in the underground economy. When businesses operate in the underground economy, they gain an unfair competitive advantage over businesses that comply with the law. This causes unfair competition in the marketplace and forces law-abiding businesses and every citizen in California to pay higher taxes. EDD’s Underground Economy Operations (UEO) organization was established in 1993 to implement and administer the activities of the Joint Enforcement Strike Force. The mission of UEO is to reduce unfair business competition and protect the rights of workers by:

  • Coordinating the joint enforcement of tax, labor, and licensing laws.
  • Detecting and deterring payroll tax violations in the underground economy. This includes unreported cash pay, wages reported on Forms 1099, and unreported/unpaid payroll tax deductions.
  • Conducting research to identify strategies to increase compliance with payroll tax laws.
  • Educating customers on UEO programs to increase compliance with payroll tax laws.
Significant UEO Program Efforts The UEO has three significant UEO program focus areas: the Employment Enforcement Task Force, the

Labor Enforcement Task Force, and the Construction Enforcement Project.

Employment Enforcement Task Force (EETF) Participating agencies in the EETF include:

  • Employment Development Department (EDD)
  • Department of Industrial Relations (DIR)
  • Contractors State License Board (CSLB)
The goal of EETF is to identify and bring into compliance those individuals and businesses in the underground economy who are in violation of payroll tax, labor, and licensing laws.

The EETF agents from each agency jointly conduct on-site inspections of businesses by interviewing owners, managers, and workers to determine if businesses are in compliance with payroll tax, labor, and licensing laws. To minimize the disruption of compliant businesses, the EETF conducts investigations only if there is a reasonable belief of violations of the Unemployment Insurance Code, Labor Code, and/or the Business and Professions Code.

Employment Enforcement Task Force Program Results Result 2008 2009 Joint Inspections 504 389 Previously Unreported Employees 4,638 4,092 Unreported Wages $187,059,631 $116,249,769 Payroll Tax Audits 422 357 Payroll Tax Assessments $29,344,488 $17,915,081 Labor Code Citation Amounts $5,575,312 $4,106,894 To learn more about the EETF program, see our Information Sheet: Employment Enforcement Task Force, available in both English (DE 631) and Spanish (DE 631/S/).



Labor Enforcement Task Force (LETF) The LETF was initially formed in 2005 as the Economic and Employment Enforcement Coalition and began operating as the Labor Enforcement Task Force in January of 2012. The LETF was formed to: ensure California workers receive proper payment of wages and are provided a safe work environment; ensure California receives all employment taxes, fees, and penalties due from employers; eliminate unfair business competition by leveling the playing field; make efficient use of state and federal resources in carrying out the mission of the LETF. They focus on industries that traditionally employ low wage workers. Agriculture, construction, automotive, carwash, courier, warehouse, garment, and restaurants are the program’s current targeted industries. The LETF members include: the Department of Industrial Relation’s (DIR) Division of Labor Standards Enforcement (Labor Commissioner) and Cal/OSHA; the EDD; the Board of Equalization (BOE); and the Department of Consumer Affairs’ (DCA) Contractor’s State Licensing Board (CSLB) and Bureau of Automotive Repair (BAR).



Construction Enforcement Project (CEP) The EDD recognizes that the vast majority of construction contractors are honest business people who operate legitimately within the law and properly report payroll taxes. However, there are some contractors who do not properly report, and this impacts both workers and law-abiding contractors. The CEP was developed because usual techniques for identifying tax and employment fraud were not as effective in the construction industry. Unlike other industries that have permanent business locations, construction businesses have constantly changing job sites. By the time information is developed that a contractor is probably operating in the underground economy, work at the job site has often been completed and an on-site inspection would not discover any labor law violations.

The CEP uses a variety of investigative techniques to identify contractors who avoid payroll taxes. When a CEP investigator develops evidence of underground economy activities, a payroll tax audit referral is made to the EDD Audit Program. The CEP goal is to develop techniques that will maximize the detection of construction industry employers operating in the underground economy.

Construction Enforcement Project Program Results Result 2008 2009 Previously Unreported Employees 1,777 4,965 Unreported Wages $65,646,628 $56,554,550 Payroll Tax Audits 125 115 Payroll Tax Assessments $8,834,006 $7,565,798 Joint Enforcement Strike Force On October 26, 1993, the Governor signed Executive Order W-66-93, which created the Joint Enforcement Strike Force on the Underground Economy. The Governor subsequently signed Senate Bill 1490, which placed the provisions of the Executive Order into law as Section 329 of the California Unemployment Insurance Code, effective January 1, 1995.

The EDD is the lead agency for the Strike Force, and the Director of EDD is the chairperson. The Strike Force is responsible for enhancing the development and sharing of information necessary to combat the underground economy, to improve the coordination of enforcement activities, and to develop methods to pool, focus, and target enforcement resources. The Strike Force is empowered and authorized to form joint enforcement teams when appropriate to utilize the collective investigative and enforcement capabilities of the Strike Force members. For more information, visit the Joint Enforcement Strike Force (JESF) page.

In addition to EDD, the other Strike Force members are:

  • Department of Consumer Affairs 1-800-952-5210
  • Department of Industrial Relations
    Minimum Wage, Safety, and Work Violations 1-888-275-9243
  • Department of Insurance 1-800-927-HELP (4357)
  • Franchise Tax Board Tax Informant Hotline: 1-800-540-3453
  • Board of Equalization 1-888-334-3300
  • Department of Justice 1-800-952-5225

    _________________________________________


    IMAGINE THAT THE ABOVE POLICY WAS WRITTEN
    ALMOST A DECADE AGO AND SINCE THEN, ALL OF THESE CORPORATE FRAUDS AGAINST OUR RETIREMENT TRUSTS AND AGAINST THOSE EARNING THE LOWEST WAGES IS SOARING.  It hurts all Americans when systemic fraud allows our Trusts to be depleted and this money must come back and not from the low-wage earner burdened unfairly.

    Maryland is ground zero for these frauds and it is the DLLR-----State agency charged with oversight of these industries.  See why the election for Governor of Maryland can only have candidates known to continue to turn their heads to Maryland's massive and systemic frauds?  See why it was Maryland's DLLR head-----Tom Perez -----that was Obama's Labor Department choice?  This is the person charged with ignoring massive wage and tax thefts by corporations operating in Maryland.

    Now, immigrant workers are sometime scapegoated for taking work from domestic workers but these immigrant workers are being used and exploited while simply trying to earn a living so it is our duty to fight for justice for all workers to bring an end to these practices.  Enforcing workplace laws helps everyone.


    IT IS DISGUSTING AND THIS IS WHY GLOBAL CORPORATE MEDIA AND POLS ARE PRETENDING THERE ARE SHORTFALLS IN OUR SOCIAL SECURITY AND MEDICARE TRUSTS.


    This is a Texas article but Maryland is just as bad....neo-liberal/neo-con means massive systemic fraud and corruption.


  • Employee or Independent Contractor? Employer Fraud Costs Workers 

  • September 30, 2013 / Chris Wagner 

  •  Wrongly classifying workers as independent contractors gets around laws like workers' compensation and family and medical leave. It's costing Texas construction workers millions, according to the International Brotherhood of Electrical Workers Local 520 in Austin. Photo: Workers Defense Project.

    Misclassification of employees as independent contractors is a serious problem in the Texas construction industry—so serious that my local decided to do an undercover investigation, using covert workers to infiltrate job sites.

    The conditions they found were severe.

    “The workers sometimes wouldn’t even get paid that week. They were scared to report the violations to anyone. They feared their boss and the government due to deportation,” said Philip Lawhon, assistant business manager/organizer for Electrical Workers (IBEW) Local 520.

    “One of our members said that it reminded him of working in Mexico. He said, ‘I came to America to get away from these types of issues.’”

    More than 40 percent of construction employees are misclassified as independent contractors, according to the Build a Better Texas report, released earlier this year by the Workers Defense Project.

    It’s a problem for the workers who get misclassified: many labor laws do not cover them, exposing them to abuse. It’s a problem for legitimate employers, who are undercut by the unscrupulous ones.

    And it’s a problem for all Texas residents, as cities and the state lose out on tax revenue, and social safety nets—already stretched thin—are forced to help out the cheated workers.

    As business manager of Local 520, I instructed my organizing department to investigate these illegal employment practices and to act on their findings.

    Going Undercover Twelve high-rise projects, 17 to 50 stories, in and around downtown Austin are in some stage of construction, from planning to near completion. My organizers found that, of the eight that have started construction, six are using electrical contractors that misclassify their employees as independent contractors.

    Four of them are using the same contractor, Power Design Inc., from Florida. Managers at Power Design, we found, had attempted to insulate themselves from charges of payroll fraud by subcontracting out most of the labor to still other contractors, ESP Electric and ES&R, both owned by brothers Rigar and Alex Espinosa.

    What Is an Employee? According to the Internal Revenue Service (IRS), whether someone is an employee or an independent contractor depends on the degree of control the person has over the work.

    Three categories of evidence are used to determine the degree of control and independence:

    Behavioral: Does the company control, or have the right to control, what the worker does and how the worker does his or her job?
    Is the worker told when and where to do the work, what tools or equipment to use, where to buy supplies and services, what order to follow when doing the work? Does the worker get more detailed instructions or less detailed? The type of evaluation system also helps determine behavioral control: an employee would be evaluated on how the work is performed, while an independent contractor might only be evaluated on the end product.

    Financial: Are the business aspects of the worker’s job controlled by the payer? (These include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) What level of investment has the worker made in the necessary tools of the trade? Does the worker incur substantial unreimbursed expenses? Does the worker have opportunity for profit or loss? What is the method of compensation? Someone paid an hourly wage is usually an employee.

    Type of Relationship: Are there written contracts or employee type benefits (i.e., pension plan, insurance, vacation pay, etc.)? Will the relationship continue, and is the work performed a key aspect of the business?

    The IRS provides Form SS-8 to help employers and workers determine who is an employee and who is an independent contractor.

    We got three of our members hired on with these two companies during the summer of 2012, all of them Mexican citizens fluent in Spanish.

    These members found that “90 percent of the installers were undocumented immigrant workers,” Lawhon said. “These workers’ skills were very limited. The workers were trained to do basically one task and that was predominantly all they did.”

    How Workers Are Abused Independent contractors are sometimes called “1099ers,” because of the IRS tax form 1099 that employers must give them at the end of the year, rather than the W-2 required for employees.

    These workers are mostly unprotected by labor and employment law. They are not covered by minimum-wage and overtime requirements under the Fair Labor Standards Act.

    They are not entitled to the protection from discrimination based on race, color, religion, sex, or national origin afforded by Title VII of the Civil Rights Act of 1964. The Age Discrimination in Employment Act does not protect them, nor do the Americans with Disabilities Act, the Family and Medical Leave Act, or the National Labor Relations Act.

    The Build a Better Texas survey of five cities found that 81 percent of Texas construction workers are Latino, and that 73 percent are foreign-born—making them especially ripe for abuse because of their lack of knowledge of U.S. labor and tax laws. The fact that many are undocumented means they are less likely to report abuses.

    Shells As far as we can tell, ESP and ES&R exist only to provide manpower to other unscrupulous electrical contractors. We can find no records of either company contracting with any general contractors or pulling any electrical construction permits.

    ESP and ES&R both pay their workers as independent contractors, anywhere from $8 to $14 an hour, with no deductions, no unemployment, no workers' comp, and no overtime pay.


    Workers are hired by word of mouth and paid by check. Many frankly prefer being paid under the table—but they get upset at the working conditions and getting shorted on their pay, getting paid late, or not getting paid at all.

    The workers did not even receive 1099 forms at the end of the year.

    Honest Businesses Pay the Price A fair marketplace for labor assumes that all employers follow the law. Honest contractors are at a disadvantage when competing with those who misclassify their workers.

    Companies that operate illegally by not paying payroll taxes, unemployment insurance taxes, and overtime compensation are able to underbid legitimate contractors by 15 to 25 percent, according to Michael White, Vice President for Government Affairs for the Texas Contractors Association.

    Responsible businesses are also burdened by increased unemployment insurance tax rates, caused by the recession, when others fail to make their required payments.

    Misclassified employees, cheated out of pay, also have less money to purchase goods and services, so the state loses out on sales tax revenue—creating another burden on an already cash-strapped state. Texas has no income tax.


    Lost unemployment taxes due to this kind of payroll fraud total around $54.5 million a year—meaning that much less money for unemployment benefits for those who need them.

    And workers misclassified as independent contractors get neither health insurance nor worker’s comp. When they are injured on the job, or when they or a family member are sick, they must rely on the charity of public hospitals, driving up the costs of health care for all.


    Widening Investigation After gathering information for several weeks, in November last year Local 520 filed complaints on behalf of the workers with the U.S. Department of Labor Wage & Hour Division, the Texas Workforce Commission (for failure to pay unemployment taxes), and the IRS.

    The wheels of justice move incredibly slowly and quietly in these cases, and as a third party complainant, Local 520 gets very little information on their progress.

    We have heard nothing from the IRS.

    The most encouraging correspondence has come from the Department of Labor. A representative called Local 520 in May and said that, since ESP and ES&R had kept such poor records, the DOL was expanding the complaint to include Power Design Inc. The DOL was opening an investigation into 147 Power Design projects all along the South from Texas to Florida.

    Changing Texas Law While Texas has long been a business-friendly state, with elected officials loath to restrict enterprise, legitimate businesses have recently made a push to pass stiffer penalties for misclassifying employees as independent contractors.

    Bills introduced in the Texas House of Representatives and Senate would increase the penalties for payroll fraud. Many legitimate subcontractors support such laws--though one group very much against stopping payroll fraud is the Homebuilders Association.

    The City of Austin recently passed an ordinance to make it harder to misclassify electricians. Its language was developed by a coalition of union electricians, union and non-union electrical contractors, and the City of Austin Electrical Inspection Department.

    The ordinance requires that electricians working as “independent contractors” have a Texas electrical contractor’s license.

    Most of the workers being exploited have only an electrical apprentice license, which just requires paying a small fee to the state licensing department. The contractor’s license is, of course, much more difficult to obtain, with electrical experience and knowledge requirements involved.


    The only way to stop the illegal practices of unscrupulous construction contractors is for organized labor and legitimate business owners to join forces, to work toward stiffer penalties and enforcement and to demand that the government entities charged with enforcing existing labor law do their jobs.


    Chris Wagner is business manager of International Brotherhood of Electrical Workers Local 520 in Austin, Texas.

    - See more at: http://www.labornotes.org/2013/09/employee-or-independent-contractor-employer-fraud-costs-workers#sthash.8jLE1Cxr.dpuf


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March 21st, 2014

3/21/2014

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Corporate NPR/APM made the news of the day surround new Federal Reserve Chief Yellen and her taking of the FED baton from Bernanke at a time that the US economy is ready to collapse for the same reasons as in 2007.  So, her concern lies with protecting bank wealth and she states that Bernanke's FED policies have made sure the banks are so well capitalized and removed from the US economy that any domestic downturn or collapse will not be felt by banks!  You see her concerns.

MEANWHILE THE FED POLICY IS DESTROYING THE PEOPLE'S WEALTH FROM ALL DIRECTIONS.  THINK YOU MADE SOME GAINS ON YOUR 401K THIS BULL MARKET---WELL, IT'S GETTING READY TO CRASH AND PENSIONS AND 401Ks will lose most of those gains.

Unemployment nationally is 35-45%, banks leveraged above $600 trillion involving the bond market this time with the FED unable to contain another crash.  Now, it is the FED's mission to keep unemployment low and the economy stable.

THIS IS MALFEASANCE.


Regarding FED Chair Yellen's first policy statement:

This is my interpretation with paraphrase:


'I AM THROUGH PRETENDING THIS FED POLICY IS ABOUT ADDRESSING HIGH UNEMPLOYMENT AND MARKET STABILITY-----WE ARE PROUD TO BE A CRONY AND CORRUPT BRANCH OF WALL STREET WORKING ONLY TO ENRICH THE RICHEST'! 

This was Yellen's announcement and it even made the most corporate of mainstream anchors----Scott Pelley of CBS hang his head in shame.

We all have known the FED's policies had nothing to do with its stated mission of controlling unemployment and stabilizing the US economy, but after several years of the Obama's term and policy that created economic stagnation and an unemployment rate of 35-45% across the country with an economy ready to implode from a bond market bubble-----Yellen said, heck, we can no longer hide it.

 IT IS IMPORTANT TO SHOUT AND DOCUMENT THAT IT IS ILLEGAL FOR THE FED TO MOVE AWAY FROM ITS STATED MISSION.  IT CANNOT JUST ARBITRARILY CHOOSE TO EMBRACE POLICY THAT HARMS THE PEOPLE IT IS SUPPOSED TO PROTECT.


So, where Greenspan shouted 'LET THE MASSIVE SUBPRIME MORTGAGE FRAUD CONTINUE AT RECORD SPEED', Bernanke served saying THE CRONY WALL STREET MARKET SERVES TO MAKE A FEW THE RICHEST IN WORLD HISTORY AND THAT IS WHAT THE FED IS ALL ABOUT UNDER ME!  Yellen is posturing that she will super-size wealth inequity by using the FED in crony finance just as Bernanke did.  What the heck, US has no public justice system right now they say!  You know, Trans Pacific Trade Pact makes US law enforcement against corporations NULL and VOID and Wall Street considers TPP already in place!

Let's take a look at what Yellen is telling you and I.  After all we are peasants waiting to have law and policy pushed upon us and not citizens who write law the works in the public interest.

Manipulating inflation rates and interest rates to zero are near zero works to give corporations free money while keeping the public impoverished.  So, zero interest rates make it impossible for people to place their money in a savings account -----the goal is to force everyone back into a stock market we all know is criminal and corrupt.  If you lose money to inflation unless you place it in the stock market-----you are being fleeced.  So, for several years now the American people have lost millions of dollars to manipulated interest rates of zero.  Meanwhile, corporations are being paid by the FED not to work.....hire.....by giving them free money to invest in the stock market and expand overseas instead of growing the domestic economy.  WAIT UNTIL THESE CORPORATIONS GET RICH ENOUGH AND THEY WILL ALLOW IT TO TRICKLE DOWN WALL STREET SAYS.  Remember when Obama ran in 2007 saying he did not believe in trickle-down and yet-----that is the entire enchilada of his administration.


ZERO PERCENT INTEREST MAKES FOR PUBLIC LOSS OF MONEY IF TRYING TO SAVE IN A SAVINGS ACCOUNT.  IT IS MEANT TO FORCE YOU BACK INTO THE STOCK MARKET AND REMEMBER.....IT IS READY TO IMPLODE!

The next important issue regarding deliberately claiming low inflation when inflation is not low is that when the FED is forced to stop these manipulations inflation will soar.  Now, moderate inflation around 5% has always been a goal and is good for public wealth and the economy.  What is coming will be much higher inflation and that is really bad for the public.  Don't worry says the FED, the big banks are prepared to weather the next recession!



'Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future.

Is the Fed Waging War on Bank Savers?

By: Brian O'Connell

NEW YORK (BankingMyWay) — A new white paper on Federal Reserve economic policy draws the sharp conclusion that the Fed is waging a three-pronged war on bank savers.

Obviously, the Fed, led by chairman Ben Bernanke, has held fast to its low interest rate policy since the Great Recession began in 2008, and hasn’t let up since. According to the Federal Deposit Insurance Corporation, the national average savings account rate is in the basement, at 0.14% , and the BankingMyWay Weekly Savings Rate tracker mirrors that number closely, at 0.15%.

If there’s any upside to the story, it’s that the Fed has decided to end the latest round of its monetary easing program and will likely no longer use artificial means to tamp down U.S. interest rates. But for bank savers, the damage is already done, and it’s not all just about interest rates.


Here’s a look at what one research outfit is calling Ben Bernanke’s “war on bank deposit savers” and the three ways it’s already under way:

Paltry savings rates at big banks. Big banks like Bank of America (Stock Quote: BAC) and JP Morgan Chase (Stock Quote: JPM) are offering savings rates at below 0.05%, points out FedUpUSA.org, a consumer financial advocacy organization. Since the 1960s the Fed has gone out of its way to give Americans a viable investment and savings alternative to the stock market, often keeping the key Fed Funds rate above 5%. But those days are long gone and bank deposit investors are paying the price.

Inflation is crushing bank deposit yields. In its April 2011 white paper, “Federal Reserve Punishes Savers By Subsidizing Big Banking Bailouts,” FedUSA.org argues that the Fed is trying to steer U.S. investors into the stock market, in large part by keeping interest rates so low that it isn’t worth it for investors to place their money in bank savings vehicles like certificates of deposits and money market accounts.

"The Federal Reserve is doing everything within its power to get people to spend or speculate in the stock market and hopefully over time create enough inflation to devalue our current debts,"
the FedUSA paper says. "This is why mortgage lending has gotten tougher (aside from government backed loans), getting a credit card is now for credit worthy customers and getting a small business loan is much more stringent. The purpose is to work through the current banking led fiasco by pushing on the debt to working and middle class Americans through lower savings rates and a push for higher inflation."

When inflation rises, as it has so far this year, bank CDs and money market accounts can’t keep up and thus are significantly reduced in value.

A smaller choice of consumer banking programs. Big banks and the Fed are currently entangled in a vicious wrestling match over bank fees. Front and center in that war are swipe fees that banks charge merchants who accept debit cards. The Federal Reserve is dropping those fees, from 44 cents per transaction to 12 cents per transaction, and in response, banks with $10 billion or more in assets are cutting bank credit card reward programs and are amping up bank deposit and ATM fees. The Fed just hasn’t learned a lesson that consumers already know too well – never get between a banker and his fee revenues.

Going forward, can consumers look forward to a break on the so-called ‘war on bank savers”? Probably. As rates rise, which they eventually will now that the Fed has taken its foot off the low-rate pedal, bank depositors will earn more on their savings and investments. But it won’t happen overnight. It’s going to take a while for things to wind down.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

_____________________________________

EVERYONE KNOWS INFLATION HAS RISEN THESE SEVERAL YEARS AS PRODUCTS COST MORE ----YET, THE FED HAS STATED INFLATION IS ZERO OR 1%.

Whether you are a supporter of CPI-E which changes the way COLA are calculated to address the Cost of Living today or if you are someone who knows inflation today is far greater than even CPI-E would calculate, the point is that the manipulation of inflation and COLA has gotten too far out of hand.  As we watch cereal boxes shrink considerably while prices rise....when my cat litter jumps from $6 to $10....we have considerable inflation.  Health care costs are of course the biggest inflation cost for Americans and it is not even included in the current CPI.

AS WE REBUILD THE DEMOCRATIC PARTY FOR LABOR AND JUSTICE WE NEED TO REMEMBER THESE LOSES TO SOCIAL PROGRAMS LIKE SOCIAL SECURITY AND VETERAN'S BENEFITS!


Do not think it is hyperbole when economists predict US inflation will soar when the FED is forced to change these manipulations.  Inflation may indeed hit 10-15% or higher.





 Manipulated inflation rates by government leading to lower COLA on Social Security for 2013


10:50 AM  John Williams, Shadowstats,

With the Federal Reserve and Federal government blatently manipulating the true rate of inflation in the economy, the results for 2013 are going to be a 1 or 2% COLA increase for Social Security recipients next year.



Charts courtesy of Shadowstats

Social Security recipients shouldn't expect a big increase in monthly benefits come January.

Preliminary figures show the annual benefit boost will be between 1 percent and 2 percent, which would be among the lowest since automatic adjustments were adopted in 1975. Monthly benefits for retired workers now average $1,237, meaning the typical retiree can expect a raise of between $12 and $24 a month.

The size of the increase will be made official Tuesday, when the government releases inflation figures for September. The announcement is unlikely to please a big block of voters _ 56 million people get benefits _ just three weeks before elections for president and Congress.

According to John Williams and Shadowstats, true inflation for 2012 is between 5 and 9%, dependent upon which model (1980 or 1990) one chooses to reference.  The government has manipulated real price inflation for more than two decades to ensure COLA increases are not in line with real inflation, to both save 10's of billion of dollars in benefit payouts, and to hide the fact that their deficit spending is causing massive inflation on essentials people need like food, energy, and rents.

Going into the 2012 election, the current administration doesn't want you to see the 30-80 rise in food prices over the past four years, and are making sure their media propagandists lie to you on what the real inflation rate is in the economy.


___________________________________________________________________

Bernanke and neo-liberals in Congress along with Obama have tried to pretend inflation is at zero or close when everyone knew it wasn't.  Inflation has been at 3-5% just as always with the inflation rate ready to explode as soon as the FED ponzi scheme of QE has maximized the FED's debt ratio to its limit, which is coming now.  This is why Yellen is having to back out of QE----the FED is maxed with debt.  When Yellen does this the manipulation of inflation rate will end and they will not be able to hide the fact that inflation has been higher than stated and will grow to a very high rate when QE ends and interest rates rise to normal.

Remember, inflation was manipulated to zero to make it look as though the FED policy was not hurting the economy.  At the same time these manipulated inflation rates did a number on the public's wealth yet again!  THOSE NEO-LIBERALS TRYING TO SUCK ALL THE WEALTH THE PUBLIC CAN AMASS ANY WAY POSSIBLE.  That is what FED policy has been about since the 2008 crash.  So, the zero COLA for several years lowered senior's Social Security payments by on average a hundred dollars a month as did the Veteran's payments.  This is big money for a class already teetering below the poverty line.  It is why the national debt fell during Obama's term---a success to Wall Street.  National debt paid by falling social safety net cuts while Wall Street fraud stays with the looters.

ARTIFICIALLY MANIPULATED INFLATION RATES OF ZERO CREATED THE LARGEST CUTS TO SOCIAL SECURITY IN THE PROGRAM'S HISTORY COURTESY OF NEO-LIBERALS IN CONGRESS AND OBAMA.

This is no surprise.....Obama laid out these plans in 2009.....the question is why have no democrats shouted out against all of this.  If your incumbent has not sounded the alarm these few years....THEY ARE NEO-LIBERALS AND GET RID OF THEM.



Keep in mind these inflation rates of zero are fake.....all articles on the subject show everyone knows inflation was the normal 3-5% yet the FED listed it at zero and the Federal government under Obama allowed this fake inflation rate be used for SS and Vet COLAs. 

IT WAS DELIBERATE TO IMPOVERISH FURTHER PEOPLE RECEIVING MONEY FROM A PUBLIC TRUST.

So, we need labor and justice politicians to keep in mind seniors and Vets will need these several years of losses to monthly payments replaced with higher COLAs for several years.  We may need 7% COLAs for example over a decade to make up for losses these several years.  This actually fits with progressive policy that sees Social Security increases by larger amounts as we replace all the stolen pensions and retirements with Social Security
.



Social Security COLA Doesn't Match Inflation

Retirees are falling further behind each year as medical costs rise by more than overall inflation.


By Philip Moeller Aug. 9, 2010

Last week's annual trustees' report on the financial health of Social Security showed the program did not suffer serious erosion during the past year. Current Social Security resources are sufficient to pay all benefits for the next 27 years. That's hardly the self-sustaining funding model that we'd like to see but it's good news nonetheless. However, it won't stop efforts to "fix" the program. And it won't halt the discussion over the adequacy of the annual cost of living adjustment (COLA) with which Social Security tries to keep retirees' benefits from being eroded by inflation.

Low rates of inflation in the year ended last fall caused the COLA to be zero for the first time in the 25-year history of these annual adjustments. Recipients received a one-time $250 payment, which helped compensate for that and was also pitched as an economic stimulus program.


Now, we're coming up on a second year with little if any inflation, as measured by a version of the Consumer Price Index used to determine the Social Security COLA. The index measures price changes for working people. Legislation has been introduced for another $250 payment, and AARP and other groups are lobbying for its approval.

However, the fiscal picture is much darker than it was even a year ago. And while Social Security's finances may have held up, the same is not true of the government's budget. We are awash in red ink with no end in sight to deficits. With mid-term elections this fall, just about everyone has found religion when it comes to government spending. So, the argument for another round of make-good Social Security payments is a tougher sell in 2010 than it was last year.

However, according to a recent academic study, the fairness of such a payment is beyond dispute. The study reviewed Social Security payments over many years, backed out spending on basic Medicare premiums (for part B physician and outpatient services) and other out-of-pocket medical spending, and then compared the remaining amounts with money that recipients paid for other goods. Researchers studied a group of older retirees who turned 65 in 1983 (the year the COLA began), and a second group of persons born in 1928. The authors -- Gopi Shan Goda and John B. Shoven at Stanford and Sita Nataraj Slavov at Occidental College -- found the value of recipients' benefits for non-healthcare spending had eroded by about 20 percent for men and nearly 27 percent for women. Those are big cuts: one out of every five dollars in benefits is effectively gone for men; one of every four dollars for women.

And their findings probably understate the actual ground lost, because the study did not include the cost of other health insurance premiums when considering out-of-pocket healthcare spending. Besides Part B premiums, other insurance includes Medicare Supplement, Medicare Advantage, Part D prescription drug coverage, and other private coverages. To the extent that the rise in premiums for such insurance has exceeded the overall rate of inflation, the study's findings would need to be adjusted to show further erosion in the effective non-medical buying power of Social Security benefits. And by all accounts, health insurance price inflation has far outpaced the rise in overall prices.


"Of course, these results assume no other income besides Social Security," the researchers say, "but a sizable fraction of the elderly depend on Social Security for the majority of their income: 64 percent of beneficiaries rely on Social Security for 50 percent or more of their income, and 35 percent of beneficiaries rely on Social Security for 90 percent or more of their income."

Even if funds were available, fixing this situation is no easy matter. This is because there are two root causes for how healthcare expenses erode the true value of Social Security benefits. The first is the rate of inflation for such expenses. The second is the fact that people simply use more healthcare as they age. "Even if medical costs did not rise faster than the prices of other goods," the study says, "as retirees aged, their medical spending would still tend to increase as a share of income."

There is an experimental government price index called CPI-E that is designed to measure the actual spending of retirees. It thus includes more weighting for medical costs. "The CPI-E has increased faster than the CPI-W over the past 20 years," the study says, "due primarily to the relative rise in health costs, and the fact that the elderly spend more on health care than the non-elderly, even after taking into account the availability of Medicare." Using the CPI-E to determine the annual COLAs for the study's subjects would have narrowed the gap, with men falling only 11 short of maintaining their effective buying power for non-medical items, and women falling 18 percent short.

But the financial consequences of even this seemingly simply shift are huge. Remember that 27-year estimate for Social Security sufficiency? According to one study, using the CPI-E to set annual COLAs would slice five years from that cushion all by itself. Further, like all measures of price change, the CPI-E does not even try to factor in changes in product quality. The $1,000 television set you buy today is vastly superior to the $1,000 set you could have bought 20 years ago. Such qualitative improvements have been enormous in healthcare.

With all the talk about changing Social Security, it would seem to make great common sense to take a careful look at the COLA mechanism. What good is it to put the program on a sound 75-year trajectory again if the interests of seniors aren't appropriately considered and protected in the process?

______________________________________________

You will not hear corporate media explain to you that Obama's myRA is Social Security privatization -----a republican plan to end yet another public Trust only a politician running as a democrat is doing it.  You will hear corporate NPR advertise this policy as a good thing for the impoverished masses who just cannot seem to save money themselves.

THAT'S A NEO-LIBERAL FOR YOU AND ALL MARYLAND POLS ARE NEO-LIBERALS!

Wall Street wants all of the Social Security and Medicare Trusts back in the stock market where Wall Street can use the money to maximize profit with leveraging that always sends public money out to act as fodder in investments with huge losses over and over and over.  Who wouldn't want Social Security tosses into the stock market?  EVERYONE!!!!!



'The same plan may be in the works for Social Security. In his speech, the President announced a new retirement savings program, MyRA. Although the details of MyRa are not clear, it is based on creating individual retirement accounts (IRAs) for workers who don’t currently have them'.



Obama Lays Groundwork to Destroy another Social Insurance


by MFlowers   

By Margaret Flowers

Originally published in GreenShadowCabinet.us

President Obama’s comments about the health law in his State of the Union speech lacked substance and were primarily focused on selling his law, and more insurance, to the public. He avoided discussing the root causes of our ongoing healthcare crisis and set the ball in motion to destroy another pillar of our social infrastructure, Social Security.

The bottom line of President Obama’s comments on the health law was that more people have health insurance and insurance companies can’t deny people based on pre-existing conditions. He urged everyone to make their friends and family buy insurance.

What he didn’t say is that people with health insurance in the United States still can’t afford the care they need and face bankruptcy if they have a serious health problem. And although insurance companies cannot deny policies to people with pre-existing conditions, they have a number of ways to avoid paying for peoples care.


The health law perpetuates a health system that treats health care as a commodity so that people only receive the amount of health care they can afford rather than treating it as a public good, as does every other industrialized nation. This is the root cause of the health crisis in the US. Any system that leaves healthcare in the marketplace, because it is based on generating profits for investors, will result in inequalities of access to care and rising healthcare costs.

Using a market-based model for social insurances sets a dangerous precedent. Traditional social insurances are provided by the government and are paid for through taxes. They are designed to meet the needs of the public rather than to provide a profit and so they guarantee a universal set of benefits for everyone. Each pays in according to their means.

The health law is doing the opposite. It is driving our entire health system to one that is provided by private entities and is paid for by individuals. Each person gets the amount of coverage they can afford. Those who cannot afford what they need are left to suffer. Since the health law was signed, there has been greater privatization of Medicaid and Medicare and billions of taxpayer dollars have been used to sell and subsidize private insurance. If we continue on this path, down the road Medicaid and Medicare will be rolled into the health exchanges and only private insurance will be available.

The same plan may be in the works for Social Security. In his speech, the President announced a new retirement savings program, MyRA. Although the details of MyRa are not clear, it is based on creating individual retirement accounts (IRAs) for workers who don’t currently have them.

What we do know is that Social Security has been under attack throughout the President’s time in office. Rather than doing what is needed, raising the cap, or going beyond that and raising benefits, there have been attempts to cut benefits and raise the age of eligibility. The public is being told that Social Security is in a crisis but is not being told that this ‘crisis’ is intentional. Unlike Social Security, IRAs are managed by financial institutions that profit from them. MyRa is another gift to Wall Street by President Obama.

We are living in an era of big finance capitalism, a predatory capitalism, based on the neoliberal economic model. It is being applied to every aspect of our society through dismantling of our public programs and privatization of our resources and services. Under this system, the basic necessities of each person are not guaranteed. Instead, it is designed to funnel wealth to the top by making everything into a commodity, a profit center for investors.

This path will continue until we rise up to challenge it. We must understand what is happening and that the destruction of our public programs is intentional, but not inevitable. There are solutions to the crises we face. For example, a health care system based on a non-profit Medicare for all model and a retirement system based on a stronger Social Security. These are obvious solutions, supported by a majority of Americans and logistically easy to put in place – if the government actually represented the people.

The President closed his remarks on health care by saying, “So again, if you have specific plans to cut costs, cover more people, increase choice, tell America what you’d do differently.” The last time he said that in a State of the Union speech, I tried to respond and was arrested. This time we must respond together by working to build a mass social movement that has the power to make our demands a reality.

~ Margaret Flowers MD, Serves as Secretary of Health in the General Welfare Branch of the Green Shadow Cabinet.


____________________________________________

It has been a sad state of affairs to watch the neo-liberal media and economists send out all kinds of propaganda on Social Security and threats to its future.  Keep in mind, neo-liberals are committed to ending all War on Poverty and New Deal programs----that has to happen for Trans Pacific Trade Pact to become enacted.  So, neo-liberals are creating drama around Social Security to hide the ultimate goal----myRA.  As we are fighting Chain CPI and fake inflation rates and direct cuts to how much Social Security payments will be, the policy neo-liberals are pushing simply ends Social Security as a Federal program.  You do not hear one neo-liberal economist saying anything about how myRA will end Social Security-----they are saying we won the fight to protect Social Security from Chain CPI.  Chain CPI was not good but myRA ends SS for goodness sake!


IF YOUR PUNDIT OR POLITICIAN IS NOT SHOUTING THAT myRA FROM OBAMA IS ABOUT ENDING SOCIAL SECURITY-----THEY ARE NEO-LIBERALS!

Baker, Reich, Krugman are all neo-liberal economists feeling the American people's pain yet never quite able to shout that neo-liberalism is the killer.
  They never speak to the Social Security and Medicare Trusts being raided either.  I have shown often that payroll taxes diverted to the US Treasury to the tune of almost $4 trillion dollars has been spent building the Homeland Security network and private military.



Social Security COLA to increase by 1.5 Percent in 2014
   
Written by Dean Baker  
Wednesday, 30 October 2013 10:00


Changing the basis of the COLA to the chained CPI would cut an already modest cost-of-living-adjustment.

The Social Security Administration has announced the Social Security cost-of-living-adjustment (COLA) will be 1.5 percent in 2014. Beneficiaries will begin seeing the increase in their checks in January.

It is worth noting that this COLA based on the consumer price index for wage and clerical workers (CPI-W) is likely to be lower than the rate of inflation shown by the BLS experimental elderly index (CPI-E), which is designed to reflect the purchasing patterns of the elderly. The biggest differences between the two indices are the weights assigned to health care and housing, with both components accounting for a much larger share of the CPI-E than the CPI-W.

The price of medical care services was up 3.1 percent in August from its year-ago level. The price of the CPI’s shelter component was up 2.4 percent from its year-ago level. As a result of the more rapid price increases in these components, the CPI-E would likely show a rate of inflation that 0.1-0.2 percentage points higher than the CPI-W. This would suggest that the rate of inflation seen by seniors is somewhat higher than the COLA they are now getting for Social Security.

However, this gap would increase if the COLA indexation switched to the chained CPI (CCPI-U). This index typically shows a rate of inflation that is 0.2-0.3 percentage points lower than the CPI-W. The reason for the difference is that CCPI-U incorporates the impact of substitution on consumption costs. If the price of apples rises less rapidly than the price of oranges, and people switch from consuming oranges to apples, then the CCPI would lower the weight it assigns to oranges and increases the weight it assigns to apples. This leads it to show a lower measured rate of inflation, which arguably reflects actual patterns in consumption.

While the CCPI-U may be picking up substitution patterns for the population as a whole, it is not clear that it accurately reflects substitution patterns among seniors. The goods disproportionately consumed by seniors, health care and housing, don’t lend themselves to easy substitution. Furthermore, it is not clear that seniors can substitute for other goods with the same ease as the rest of the population.

Unfortunately, neither BLS or the proponents of adopting the chained CPI for the COLA have done research on this topic.

In short, there is some reason to believe that the current COLA already does not adequately compensate seniors for the rate of inflation they experience. This problem would be worse if the basis for the COLA is changed to the chained CPI.


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ISN'T THIS LOL----IT IS THE FED'S REFUSAL TO SEEK JUSTICE AND RECOVER FRAUD THAT HAS SUPER-SIZED THE BANKS WITH SO MUCH WEALTH AND EXPANSION THAT WALL STREET IS NO LONGER CONNECTED TO THE US ECONOMY OTHER THAN CONTINUING TO IMPLODE IT WITH BOOM AND BURST BUBBLES.



Well, the FED policy was all about feeding free money at zero percent so corporations could do nothing for the last several years but merge and acquire and expand overseas. The FED policy was crony and corrupt by every measure and professionals have shouted for years that the FED's actions are no longer matching the goals of its mission. The banks, rather than be nationalized so as to complete investigations, recover tens of trillions of dollars in fraud, and prosecute the criminals that are systemic in the financial industry so as to start to rebuild a healthy economy were instead simply allowed to keep the loot, use it as investments in a BULL market all of which made them extraordinarily rich with other people's money! How crony is that?

The reason the FED notes that banks and corporations will not be effected by the next recessions is just that.....the FED and Obama/Congressional neo-liberals have allowed the banks to grow separate from the US economy and while still working to implode the US economy from fraud and corruption, a collapse for you and me will see Wall Street simply move its money elsewhere until it is over. The FED, Obama, and Congressional neo-liberals have indeed allowed the banks to get to just the same place as 2007 as regards collapse by super-sized leverage and fraud and corruption, this time in the bond market.

The good news for WE THE PEOPLE is that since the banks still have those tens of trillion in massive fraud and made a killing investing our money.....we get all that fraud and the gains Wall Street made from the BULL market back as soon as Rule of Law is reinstated and fraud recovered to government coffers and individual's pockets.

When we do nationalize the Wall Street banks to do this, they will become the regional banks they are meant to be. So, they may weather the coming recession caused by the implosion of the bond market, but they will not weather justice delayed! Remember, when a government suspends Rule of Law, it suspends Statutes of Limitation!



Nearly all top U.S. banks could withstand severe recession, Fed says

WASHINGTON -- Only one of the nation's 30 largest banks would not be able to withstand a severe recession and the firms collectively are in better financial position to handle economic shocks than five years ago, according to Federal Reserve stress test results released Thursday

Under the most extreme of three economic scenarios, Zions Bancorporation of Salt Lake City would be the only large bank at risk of failure because a key measure of financial strength would fall below the Fed's standard.

The Fed conducts two rounds of stress tests and next week will give what amounts to pass/fail grades for the banks after factoring in each firm's plans for dividend payments or stock buybacks this year.



“The annual stress test is one of the Federal Reserve’s most important tools to gauge the resiliency of the financial sector and to help ensure that the largest firms have strong capital positions,” said Fed. Gov. Daniel K. Tarullo, who oversees the central bank's regulatory functions.

“Each year we are making substantial improvements, which have helped make the process even stronger than when we first conducted the stress tests in the midst of the financial crisis five years ago,” he said.

The banks have a combined $13.5 trillion in assets, nearly 80% of the U.S. industry.

Under the Fed's severely adverse economic scenario, those 30 firms would lose about $501 billion over 27 months.

That scenario, designed to replicate a downturn similar to the 2008 financial crisis and Great Recession, involves a sharp rise in the unemployment rate to 11.25%, a 25% decline in home prices and a nearly 50% drop in the stock market.

Under such conditions, Zions would fall below a Fed gauge of bank health. The firm's ratio of capital to its risk-weighted assets would fall to 3.5% from the 10.5% level as of Sept. 30.

Banks are supposed to stay above 5%.

The next weakest bank was M&T Bank Corp., with a ratio of 5.9%. The nation's two largest banks fared only slightly better: Bank of America Corp.'s ratio was 6% and JPMorgan Chase & Co.'s was 6.3%.

The best performers under the scenario were State Street Corp, at 13.3% and the Bank of New York Mellon Corp. and Discover Financial Services, both at 13.1%

Overall, the combined ratio for the 30 largest banks would fall to 7.6% from 11.5%. Those same banks had a ratio of 5.5% at the beginning of 2009, the Fed said.

The Fed's two stress tests are designed to determine the strength of the nation’s largest financial institutions.

The first, whose results were released Thursday, were required by the 2010 Dodd-Frank financial reform law and measure the firms in three economic scenarios -- normal conditions, a moderate recession and a severe economic downturn.

This year, as required by the Dodd-Frank law, the Fed expanded the tests to the 30 largest bank holding companies.

Previous stress tests, which began after the crisis, looked at the top 18 banks.

The second test looks at each bank's plans to pay dividends or buy back stock. The results of the first stress test will be applied to those plans.

On Wednesday, the Fed will announce which banks will be allowed to proceed with their plans and which would first have to raise more capital. The Fed also will determine if the planning processes of the banks, which include how they project revenue and losses, are sufficient.

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November 11th, 2013

11/11/2013

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  PLEASE BE AWARE THAT NEO-LIBERALS ALWAYS USE THE PRIMARIES TO SOUND PROGRESSIVE BUT WE KNOW THE POLICIES THAT ACTUALLY PLAY OUT ARE WEALTH AND PROFIT!!!!  Tell these pols we are not going to be fooled by running and voting for labor and justice!!!

NEO-LIBERALS ARE GOING TO TAKE ALL WEALTH BUILT FROM DECADES OF LABOR AND JUSTICE GAINS.......ALL MARYLAND DEMOCRATS ARE NEO-LIBERALS!!!!!

As we go into election season across the country please listen to what is said and how the media portrays it!  We need everyone to shout out what the truth to these campaign issues are and how these neo-liberals do not meet what they are out on the campaign trail saying-----think Obama.  If we knew about Obama what we know about O'Malley for example we would have never voted for him!!!!!  The theme of these last few years has been neo-liberals moving all of public assets and wealth to the top and protecting that wealth from public justice.  Now, they are soaking the public with losses in retirements, pensions, education, and health care to pay for the loses to massive corporate fraud. 

DO NOT ALLOW THIS TO HAPPEN.  WE CAN REVERSE THIS BY SIMPLY RUNNING AND VOTING FOR LABOR AND JUSTICE IN ALL PRIMARY ELECTIONS!  WE HAVE HAD A FEW SUCCESSES, BUT TOO MANY NEO-LIBERALS ARE STILL WINNING!!!!


Below you will see campaign issues and how they are skewed.  These are vital issues for all Americans and we need to listen and research who these candidates are.  Please note that labor unions are being held hostage by neo-liberals as regards labor laws so they do not always do the right thing for labor and justice-----work with them to strengthen the unions but vote against all neo-liberals!

This is what a labor and justice victory looks like!  Remember, we do not need to have only socialists to reach justice, we need real progressive labor and justice candidates in all primaries challenging the neo-liberals holding the democratic party!!!


DAY FOUR: Sawant Wins 58.45% of Latest Ballots, Closes Gap With Conlin To 1,200 Votes

Posted by Clay Showalter 45pc on November 08, 2013 · Flag November 8, 2013 / 9:00 PM –

The latest ballot drop by King County elections has increased the likelihood that not only will Kshama Sawant defeat incumbent Richard Conlin in the race for Seattle City Council Position 2, but her margin of victory may be enough to avoid any recount!

The new numbers include Sawant gaining 58.45 percent of the newest ballot drop, bringing the overall total to 74,933 (49.49 percent) for Sawant and 76,170  (50.31 percent) for Conlin. After trailing by 6,136 votes on Election Night, Sawant has now cut Conlin's lead to only 1,237 votes - only a fifth of his original lead, with at least 30,000 votes left to count.

To win with 30,000 ballots to go, Sawant would need only 52.06 percent of those votes. In each of the last four ballot releases, Sawant has led by more than that margin. In each of the last three, her percentage has topped 55 percent.

King County Elections has now released six tallies of ballots in four days. The trend remains unmistakeable:

Ballot Drop Sawant Conlin

Election Night (Tues. 11-5) 38,116  46.13% 44,252  53.56% Day Two Afternoon (11-6) 7,862  49.69% 7,949  50.24%
Day Two Evening (11-6) 3,385  50.21% 3,342  49.57%
Day Three Afternoon (11-7) 6,950  52.79% 6,174  46.90% Day Three Evening (11-7) 5,747  55.92% 4,528  44.07%
Day Four Afternoon (11-8) 7,852  55.29% 6,338  44.63%
Day Four Evening (11-8) 5,021  58.45% 3,567  41.52%
Total 74,933 49.49% 76,170  50.31%

In close elections, a machine recount is triggered when candidates finish within half a percentage point and 2,000 votes of each other. King County Elections must do a manual recount if they're within 150 votes and a quarter of a percentage point.

To avoid a recount, with the assumption of 30,000 ballots left, the Sawant campaign must win 52.23 percent to win by more than a half percentage point, and 55.40 percent to win by more than 2,000 votes - both well within range given current trends. However, starting next week, counted ballots will include more challenged ballots cast earlier in the election period. This weekend, the Sawant campaign is holding volunteer and staff trainings to mobilize its large base of active supporters to help track down and verify challenged ballots, as a way to maximize the chances that the Sawant campaign can win the Position 2 race outright, without need for a recount. Read more about these trainings here, and please join us Saturday and/or Sunday at 11am at our Campaign Headquarters (1265 Main Street, Suite 205).

With the holiday weekend, King County Elections will release no further tallies until Tuesday afternoon, November 12, at 4:30 PM.

"The tremendous surge of enthusiasm for our campaign in its final weeks is being reflected in these results," Sawant said this afternoon. "This is what democracy looks like."

PS. All supporters should use the King County Ballot Tracker to ensure that your ballot has been counted without issue. It will save our Voter Protection Squad a trip to your house!


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YOU WILL NOT ONLY HEAR NOTHING ON THIS TOPIC BUT IF THESE NEO-LIBERALS HAPPEN TO GET QUESTIONED ON THIS TOPIC IN PUBLIC-------THEY SIMPLY DENY IT HAPPENS.  MEANWHILE MARYLAND JUSTICE ADVOCATES MARCH AND PROTEST WITH PUBLIC TESTIMONY THAT IMMIGRANTS AND LOW-WAGE WORKERS IN MARYLAND ARE BEING HIT HARD WITH THIS PRACTICE!

You cannot have a politician passing laws like Dream Act or welcoming immigrants to come to Maryland to work and then turn their heads to exploitation.  IF POLITICIANS ARE GOING TO ALLOW IMMIGRANTS TO WORK THEY NEED TO HOLD EMPLOYERS TO THE SAME LABOR STANDARDS NOW!!!


Wage Theft Outstrips Bank, Gas Station and Convenience Store Robberies
By Laura Clawson, Daily Kos

10 November 13

 

America's workers face a crime epidemic-one in which the criminals are rarely even made to pay back what they've stolen. The crime epidemic in question is wage theft:

Gordon Lafer assesses some of the damage:

Fully 64 percent of low-wage workers have some amount of pay stolen out of their paychecks by their employers every week, including 26 percent who are effectively paid less than minimum wage. Fully three-quarters of workers who are due overtime have part or all of their earned overtime wages stolen by their employer. In total, the average low-wage worker loses a stunning $2,634 per year in unpaid wages, representing 15 percent of their earned income. And enforcement? Forget about it. At the federal level, there's just one agent enforcing wage laws for every 141,000 workers. More than half of the states have cut wage enforcement staff in recent years, and some states have tried to eliminate those positions entirely. For instance,

In 2010, Missouri's labor department collected $200,000 in restitution for minimum-wage violations and $500,000 for prevailing-wage violations, and issued 1,714 citations for child-labor violations. Yet [Republican state House Speaker Steven] Tilley charged that investigators were being "overzealous," particularly in prosecuting complaints of employers cheating on prevailing wages. For many Republican politicians, crimes committed by employers against workers don't really register as crimes at all in our political environment. And while the Obama administration has cracked down, the back pay it's collected is just a drop in the bucket of what workers have earned that their employers have taken.


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Do you know that O'Malley/Brown (O/B)oversaw the period that the MD Veteran's hospital in Baltimore was ranked bottom in the nation for service to vets?  Do you know that homeless people are often vets and there is a War on the Poor in Balt under  O/B.  Do you know that O'Malley travelled overseas to market MD online 'colleges' almost everyone regards as inferior education to vets having strong education benefits that would have taken them to good 4 year universities instead.  Vets are being targeted with this cheap online education that takes all their GI bill education benefits and advocates shouting loudly that this exploits our vets--O'Malley/Brown are the face of this bad policy!  Not that it would be any different with the other neo-liberal challengers.

O/B made health care reform about building private health systems that gave health institutions the right to write health policy that made sure profit at the expense of patient access ruled the day and vets will fall into that lack of access as consolidation of the health industry-the ACA goal -will have global health systems preying on the poor, elderly, chronically ill, and vets. 

If we want health care that holds everyone equal access and care--just as US citizens paid for in taxes-we want Universal Care in MD-and we need a labor and justice candidate running in the primaries!


Brown proposes tax break for veterans Military pension exemption is part of five-part plan


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By Michael Dresser, The Baltimore Sun 12:09 p.m. EST, November 11, 2013

Maryland Democratic gubernatorial candidate Anthony G. Brown marked Veterans Day by releasing a five-part plan for former members of the armed forces, including a tax break and help with employment and housing.

Brown, the lieutenant governor, issued what he called his "Compact with Maryland Veterans" Monday with little fanfare on a day when he avoided scheduling campaign appearances and instead attended ceremonial functions in his official capacity.

As part of the plan Brown and his running mate, Howard County Executive Ken Ulman, joined his fellow candidates in promising a tax cut – though on a relatively modest scale targeted at veterans.

Brown, an Army veteran of the Iraq war, proposed the elimination of taxes on military pensions up to $150,000 a year – a break he would phase in over eight years. His campaign estimated the cost as of July 2018 at $17.5 million annually.

The lieutenant governor's Democratic rivals -- Attorney General Douglas F. Gansler and Del. Heather R. Mizeur of Montgomery County -- have each called for broader tax cuts. Gansler has proposed a reduction in the corporate income tax, while Mizeur has recommended income tax cuts for about 90 percent of Maryland taxpayers – offset by increases for those earning more than $500,000.

The three announced Republican candidates – Harford County Executive David R. Craig, Del. Ron George of Anne Arundel County and Charles County business executive Charles Lollar -- have also called for reductions in a variety of taxes and fees.

In addition to the tax preference, Brown proposed that the state step up its efforts to help veterans find jobs and to provide bridge loans to veterans whose disability claims are caught up in the Veterans Administration processing backlog.

The plan also calls for establishment of a Veterans Treatment Court – modeled after the state's drug courts – to help veterans who get in trouble with the law to receive treatment for addiction and mental health problems and to avoid jail. Brown would also expand the state's Rental Housing Works program and devote at least 20 percent of its funding to veterans.

The Brown campaign estimated the total cost of the tax exemption and new programs at $24.2 million as of what would be the end of his first term.

In releasing his plan, Brown also pointed to the initiatives adopted over the last seven years he has served as No. 2 behind Gov. Martin O'Malley. Among other things, he noted that the administration won passage of a bill intended to make it easier for veterans to use skills acquired in the military in civilian jobs.

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People-----these investors in public private partnerships are all global corporations from VEOLA et al to Wall Street......how does that make for a win for the public?  Remember, these same corporations owe the American people trillions of dollar in corporate fraud and simply need to pay that back to have government fund these projects!!!!

Purple Line: Public-private transit partnership would be one of the broadest in U.S. Bill O'Leary/The Washington Post - This stretch along Connecticut Avenue in Chevy Chase could be slated for additional development under current Purple Line rail plans.

By Katherine Shaver, Published: October 12

  Maryland transit officials’ proposal to have a private company design, build, operate and help pay for the light-rail Purple Line in the Washington suburbs would be one of the first such arrangements in the United States, raising questions about potential risks and financial impacts.

Only one other U.S. transit project, a commuter rail line in Denver, entails such a far-reaching public-private partnership, but it is still under construction.

Graphic

Map of the proposed Purple Line

Purple Line: Impacted properties

The Maryland Transit Administration will buy some strips of private land. Here are the affected properties.


ARCHIVES | See previous Washington Post coverage of Maryland’s Purple Line plans.

Purple Line would take 116 homes, businesses Katherine Shaver SEP 5

New study details environmental, community impacts of building light-rail line through Maryland suburbs.

Details of the 35-year Purple Line plan have begun to emerge as the Maryland Department of Transportation prepares to seek state approval Wednesday to pursue it. A consortium of private companies would be expected to contribute $500 million to $900 million to the $2.2 billion project.

The private team would be reimbursed for design, construction and equipment costs as work progressed over five years. The state would then pay the company $100 million to $200 million annually to operate and maintain the line for 30 years. The payments could be reduced if the company did not meet certain standards, such as providing reliable service and clean trains.

The private financing costs would be paid back over time with Purple Line fare revenue, officials said. If ridership on the 16-mile line between Montgomery and Prince George’s counties did not materialize as anticipated, fare revenue from other Maryland transit systems would make up the difference, state officials said.

Maryland transportation officials say such a partnership would take advantage of the private sector’s light-rail expertise and require the companies to assume the financial risks of any construction delays or cost overruns. The efficiencies gained from one private entity overseeing all aspects — from the drawing board to bulldozers to trains on tracks — are projected to save up to 20 percent over 35 years, officials say.

“There’s a really strong incentive for [the private companies] to focus on quality and durability,” said Maryland Deputy Transportation Secretary Leif A. Dormsjo. “They have to really own not just the construction project but also make sure we don’t have surprises once riders start to use it.”

The approach, while considered innovative, is drawing scrutiny. Five U.S. transit projects have used public-private partnerships in some form, Maryland officials say. However, the Purple Line would be the only one besides the Denver project to rely heavily on private financing.

The plan will get its first test of political support Wednesday, when the state Board of Public Works — comprising the governor, comptroller and state treasurer — is scheduled to vote on whether to allow the Transportation Department to seek private proposals.

State Sen. Richard S. Madaleno Jr. (D-Montgomery), who reviewed the plan as a member of the Senate Budget and Taxation Committee, said he considers it a “very risky proposition.”

“It’s attractive. It’s an innovative approach,” Madaleno said. “But we don’t have very many, if any, examples of how this works out.”

Moreover, he said, communities along the line need assurances that a private company would fulfill promises by the state, such as to run trains on a bridge over Connecticut Avenue in north Chevy Chase rather than stopping traffic.




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If you do not see the parallel to what is happening in the US to what the banks did in Europe you are not paying attention.  The pensioners are not the problem with the economy or government coffers-----it is the massive fraud of tens of trillions of dollars in fraud that targeted pensions as well that created this problem.  Yet, as you see neo-liberals are watching as this happens in a formerly democratic stronghold.

Look as well at the loading of all state and local governments with credit bond debt and you will see what happened to the southern European nations------deliberate debt designed to force a dismantling of public assets and wealth!!!!



'There are other steps that need to be taken, and soon, to prevent a cascade of municipal bankruptcies. The super-priority of derivatives in bankruptcy needs to be repealed, and the protections of Glass Steagall need to be restored. While we are waiting on a very dilatory Congress, however, state and local governments might consider protecting themselves and their revenues by setting up their own banks'.


The Detroit Bail-In Template: Fleecing Pensioners to Save the Banks

August 14th, 2013


by Ellen Brown, Web of Debt

The Detroit bankruptcy is looking suspiciously like the bail-in template originated by the G20’s Financial Stability Board in 2011, which exploded on the scene in Cyprus in 2013 and is now becoming the model globally. In Cyprus, the depositors were “bailed in” (stripped of a major portion of their deposits) to re-capitalize the banks. In Detroit, it is the municipal workers who are being bailed in, stripped of a major portion of their pensions to save the banks.





Follow up:

Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city. Interest rate swaps – the exchange of interest rate payments between counterparties – are sold by Wall Street banks as a form of insurance, something municipal governments “should” do to protect their loans from an unanticipated increase in rates. Unlike ordinary insurance, however, swaps are actually just bets; and if the municipality loses the bet, it can owe the house, and owe big. The swap casino is almost entirely unregulated, and it is a rigged game that the house virtually always wins. Interest rate swaps are based on the LIBOR rate, which has now been proven to be manipulated by the rate-setting banks; and they were a major contributor to Detroit’s bankruptcy.

Derivative claims are considered “secured” because the players must post collateral to play. They get not just priority but “super-priority” in bankruptcy, meaning they go first before all others, a deal pushed through by Wall Street in the Bankruptcy Reform Act of 2005. Meanwhile, the municipal workers, whose pensions are theoretically protected under the Michigan Constitution, are classified as “unsecured” claimants who will get the scraps after the secured creditors put in their claims. The banking casino, it seems, trumps even the state constitution. The banks win and the workers lose once again.

Systemically Dangerous Institutions Are Moved to the Head of the Line The argument for the super-priority of derivative claims is that nonpayment on these bets represents a “systemic risk” to the financial scheme. Derivative bets are cross-collateralized and are so inextricably entwined in a $600-plus trillion house of cards that the whole financial scheme could go down if the betting scheme were to collapse. Instead of banning or regulating this very risky casino, Congress has been persuaded by the masterminds of Wall Street that it needs to be preserved at all costs.

The same tortured logic has been used to justify the fact that the federal government deigned to bail out Wall Street but not Detroit. Supposedly, the mega-banks pose a systemic risk and Detroit doesn’t. On July 29th, former Obama administration economist Jared Bernstein pursued this line of reasoning on his blog, writing:

[T]he correct motivation for federal bailouts — meaning some combination of managing a bankruptcy, paying off creditors (though often with a haircut), or providing liquidity in cases where that’s the issue as opposed to insolvency – is systemic risk. The failure of large, major banks, two out of the big three auto companies, the secondary market for housing – all of these pose unacceptably large risks to global financial markets, and thus the global economy, to a major industry, including its upstream and downstream suppliers, and to the national housing sector.

Because:

  1. There’s not much of a case that Detroit is systemically connected in those ways, and;
  2. Chapter 9 of the bankruptcy code appears to provide an adequate way for it to deal with its insolvency, I don’t think anything like a large scale bailout is forthcoming.
Holding Main Street Hostage Detroit’s bankruptcy poses no systemic risk to Wall Street and global financial markets. Fine. But it does pose a systemic risk to Main Street, local governments, and the contractual rights of pensioners. Credit rating agency Moody’s stated in a recent report that if Detroit manages to cut its pension obligations, other struggling cities could follow suit. The Detroit bankruptcy is establishing a template for wiping out government pensions everywhere. Chicago or New York could be next.

There is also the systemic risk posed to the municipal bond system. Bryce Hoffman, writing in The Detroit News on July 30th, warned:

Detroit’s bankruptcy threatens to change the rules of the municipal bond game and already is making it more expensive for the state’s other struggling towns and school districts to borrow money and fund big infrastructure projects.

In fact, one bond analyst told The Detroit News that he has spoken to major institutional investors who have already decided to stop, for now, buying any Michigan bonds.

The real concern of bond investors, says Hoffman, is not the default of Detroit but the precedent the city is setting. General obligation municipal bonds have always been viewed as a virtually risk-free investment. They are unsecured, but bondholders have considered themselves protected because the bonds are backed by the “unlimited taxing authority” of the government that issued them. Detroit, however, has shown that the city’s taxing authority is far from unlimited.  It already has the highest property taxes of any major city in the country, and it is bumping up against a ceiling imposed by the state constitution. If Detroit is able to cut its bond debt in half or more by defaulting, other distressed cities are liable to look very closely at following suit. Hoffman writes:

The bond market is warning that this will make Michigan a pariah state and raise borrowing costs — not just for Detroit and other troubled municipalities, but also for paragons of fiscal virtue such as Oakland and Livingston counties.

However, writes Hoffman:

Gov. Rick Snyder dismisses that threat and says the bond market is just trying to turn Detroit away from a radical solution that could become a model for other struggling cities across America.

A Safer, Saner, More Equitable Model Interestingly, Lansing Mayor Virg Bernero, Snyder’s Democratic opponent in the last gubernatorial race, proposed a solution that could have avoided either robbing the pensioners or scaring off the bondholders: a state-owned bank. If the state or the city had its own bank, it would not need to borrow from Wall Street, worry about interest rate swaps, or be beholden to the bond vigilantes. It could borrow from its own bank, which would leverage the local government’s capital into credit, back that credit with the deposits created by the government’s own revenues, and return the interest to the government as a dividend, following the ground-breaking model of the state-owned Bank of North Dakota.

There are other steps that need to be taken, and soon, to prevent a cascade of municipal bankruptcies. The super-priority of derivatives in bankruptcy needs to be repealed, and the protections of Glass Steagall need to be restored. While we are waiting on a very dilatory Congress, however, state and local governments might consider protecting themselves and their revenues by setting up their own banks.

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Let's remember, it is the neo-liberals on Capitol Hill pushing this as compromise in entitlement and Social Security 'reform' takes the lead since the Treasury is empty of the $4 trillion in payroll taxes paid since Reagan's time!!

Seniors would see smaller Social Security checks under Obama budget

By Tami Luhby  @Luhby April 10, 2013: 4:50 PM ET  CNN MONEY

NEW YORK (CNNMoney) Senior citizens would see their Social Security checks shrink under President Obama's latest budget proposal. The budget plan, released Wednesday, calls for changing the way the annual cost of living adjustments for Social Security and other federal programs are calculated. Shifting to "chained CPI" from the current inflation measure could reduce the federal debt by $230 billion, but it would also mean that seniors would get smaller increases in their Social Security payments each year.

The president's proposal would provide protections for the oldest seniors, low-income seniors and veterans, and those who are disabled. Seniors ages 76 to 85 would receive a supplemental payment annually to offset some of the slowdown in growth. Also, programs that are geared for those in or near poverty, such as the Supplemental Security Income, would be exempt from the switch to chained CPI.

But the change would still make a difference for many people. Chained CPI is expected to grow between 0.25 and 0.3 percentage points more slowly than the current CPI measure.

Initially, the reduction in the growth of Social Security checks would be quite small ... between $38 and $45 in the first year, for the average retired worker. But over time, that would grow into the hundreds of dollars.

Someone who started collecting the average Social Security benefit for a retired worker in 1999 would receive $12,972 in 2012. But let's say the Social Security Administration had already been using chained CPI -- that person would get only $12,336 this year, according to the National Academy of Social Insurance. That's nearly 5% less.

The difference gets bigger over time. According to the National Women's Law Center, a retiree who was collecting $17,520 last year would see 6.5% less, or $1,139, by age 85, if chained CPI were in effect. A decade after, their payments would be 9.2% smaller, or $1,612. These calculations do not include the supplemental payments, the details of which were not released until Wednesday.


For many seniors, these decreases aren't trivial. Nearly two in three recipients rely on Social Security for at least 50% of their income. And Social Security makes up at least 90% of the income received by 36% of seniors.

"For a lot of elderly people, Social Security is virtually their only source of income," said Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities. "A decrease of almost $600 a year ... for people in that situation is very significant."

That's especially true for older seniors, who have likely spent down their other assets and seen other income sources dry up. Also, these recipients are usually contending with growing medical bills, which chained CPI doesn't account for. The protections Obama is planning may mitigate the problems, but some experts don't think they'll fully shield this group.

  Krugman: Focus on deficit is 'destructive' "The older you get, the bigger the reduction you get,' said Gary Koenig, director of economic security for AARP's Public Policy Institute. "It's hitting at a time when folks can least afford it."

Women could get hit especially hard since they live longer than men and rely more on Social Security, said Joan Entmacher, vice president for family economic security for the National Women's Law Center. For the typical single elderly woman, the switch would reduce her monthly benefit by $56 at age 80, not including the supplement. This is equivalent to a week's spending on food per month.

"The typical woman beneficiary is just barely above the poverty line," she said. "She has a really hard time meeting expenses."

Regardless of what one thinks of the magnitude of the cuts, switching to chained CPI is not the solution to reforming Social Security. Additional measures will be needed to extend the entitlement program's solvency since chained CPI addresses only about 20% of the gap.

And Peter Orszag, former budget director under Obama, says the difference between chained CPI and the current CPI is overstated -- that means Social Security benefits won't be cut by as much as is being forecast.


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Below is the Brookings Institute policy on entitlement and Social Security reform.  They think that now that these Trusts have been gutted with fraud, reforms are needed to cut American's retirements.  Note that the Brookings is the neo-liberal think tank that Clinton and Obama and all of democratic leadership subscribe to.  See why you hear all this manufactured crisis meant to hide what was always the planned policy?!

Social Security beneficiaries to get 1.5 percent raise


Eileen Ambrose 10:18 a.m. EDT, October 30, 2013

Social Security beneficiaries will receive a 1.5 percent raise next year, the Social Security Administration announced today. Also, the agency announced that the amount of earnings subject to the Social Security tax is going up next year from $113,700 to $117,000.

According to the National Committee to Preserve Social Security & Medicare, the typical beneficiary will receive a $19 per month raise.

“Seniors know all too well, their living costs often outpace the COLA increase and a 1.5% increase is anything but too generous,” said Max Richtman, president and CEO of the group.

The increase comes at a time when lawmakers are likely to take up whether to change how the government measures inflation as part of budget negotiations.

Some economists say the current yardstick overstates inflation. The result is that the government collects less in taxes than it should because income levels for tax brackets and deductions are higher than they should be, economists say. And, they add, the overstatement of inflation means that Social Security pays more to beneficiaries than it should, too.

Republicans have backed moving to the so-called Chained Consumer Price Index that tends to report inflation at a lower rate. This index takes into account that consumers will make substitutions when prices rise, such as switching from high-priced strawberries in the fall to cheaper pears.

President Obama has signaled his willingness to go along, provided seniors get periodic bump-up in benefits and other guarantees.



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The Simple Arithmetic of Diverting Payroll Taxes to Individual Accounts

Many people favor the creation of individual accounts as a partial or complete substitute for Social Security. Some propose to fund these accounts out of general revenues. When some part of the pensions based on these individual accounts is used to reduce Social Security benefits, this approach can indirectly reduce the projected long-term deficit in Social Security. This is the approach used, for example, in the Archer/Shaw bill.

Other so-called "carve-out" plans, such as those of Senator Kerry and Governor Bush, would divert part of the current payroll tax from the Social Security system. Their plans would carve out part of the payroll tax, which would then be directed to individual accounts. They would cut Social Security benefits enough to restore projected long-term balance.


The first point to recognize is that by subtracting revenues from the Social Security system, these plans force larger cuts than would otherwise be necessary to restore financial balance in that system. On the other hand, pensioners would have the balances in their individual accounts with which they could (or, in some plans, would have to) buy annuities.

This trade raises several practical questions:

Will the individual-account-based pensions fully compensate pensioners for the Social Security cuts?

Will the individual-account-based pensions be inflation protected?

Will individual account holders be required to convert their accounts into annuities? If not, what happens to those who are imprudent or unlucky, exhaust their accounts, and find themselves dependent on much-reduced Social Security benefits.









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October 16th, 2013

10/16/2013

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ALL OF THESE CRISES ARE LEADING TO THE CUTTING OF SOCIAL SECURITY AND MEDICARE.  WE ALREADY HAVE LOST FROM BOTH A GOOD AMOUNT THESE FEW YEARS AND THEY ARE COMING FOR MORE.



The articles below show you the dynamic of policies as they happened in the 1980s and 90s.  No doubt corporate media is working hard to make sure you do not hear these dynamics.....that is why public media NPR and APM was taken corporate because they were doing just that in 2009.

Basically, Reagan made huge increases in payroll taxes under the guise of adequately funding Social Security and Medicare for the future-----A GOOD POLICY THAT HE KNEW WOULD BE RECEIVED WELL BY PEOPLE LIKING THESE SAFETY NET PROGRAMS.  He actually never intended for that money to reach these Trust Funds because he also allowed these payroll taxes to be used as Treasury funds hiding the public debt as he spent the money building US defense and security.....just as George Bush has done.  So, tons of money enough to fund the Trusts for baby boomer retirement all spent as general fund money. 

THIS IS WHY YOU ARE HEARING CONGRESS AND THE MEDIA SAY THERE IS ONLY A FEW TENS OF BILLIONS OF DOLLARS IN THE TREASURY WHILE TRILLIONS OF DOLLARS OF PAYROLL TAXES AND THE TRUSTS ARE THERE.

So, Reagan knowingly set up the American people to fund super tax cuts for the rich through higher payroll taxes.  Remember, taxes at that time were around 60-70% for the rich and corporations.  THIS IS WHY WE HAD A THRIVING FIRST WORLD SOCIETY AND MIDDLE-CLASS---THE RICH AND CORPORATIONS PAID TAXES.

Bill Clinton comes along running as a progressive democrat and as you see from the article below he was simply a Reagan neo-liberal wanting to advance all the low-tax/cutting social programs of Reagan era.  It is true Clinton had a republican Congress and could not enact too much in the way of corrections, but did you hear him shouting loudly and strongly that your payroll taxes were being thrown into the general fund and eaten by defense industry and security industry buildup? 

CLINTON MADE NOT A SOUND AND INDEED PROCEEDED TO CREATE POLICY THAT PREPARED FOR THE END OF THESE PROGRAMS AS HE WAS CREATING POLICY OF MASSIVE WEALTH INEQUITY WITH BANK DEREGULATION AND FREE TRADE.

You see that the policies Obama and neo-liberals today are pushing as the same in Clinton's Administration.  Create private retirement IRAs to augment lost Social Security.  Raise retirement age since there is no money in the Trusts.  Cut access to health care because Medicare Trusts have been gutted with fraud and redirected to the Treasury and spent on Homeland Security and NSA as hedge fund overlord.  Not one neo-liberal has attempted to bring revenue back to the Trusts by higher corporate taxation  and fraud recovery fixing the problem of VISIGOTH  RAIDING OF THESE TRUSTS.





'And, yes, it is phony because money in a retirement fund is being borrowed for current expenses. "If the reserve were truly for retirement, it would be set aside and not put into the general fund," says economist Barry Bosworth of the Brookings Institution, an authority on Social Security'.

'The rate at which Social Security taxes are deducted from paychecks has gone up seven times since 1980--and income subject to the tax continues to rise every year'.



'Starting in 1983, the payroll tax was deliberately set higher than it needed to be to cover payments to retirees. For the next 30 years, this extra money was sent to the Treasury, and this windfall allowed income tax rates to be lower than they otherwise would have been. During this period, people who paid payroll taxes suffered from this arrangement, while people who paid income taxes benefited'.

Below you see an honest statement on the state of the Trusts and advice on how to protect this retirement fund.  RAISE YOUR HAND IF YOU UNDERSTAND THAT THE PAYROLL TAX INCREASES OVER THE 1980S MORE THAT FUNDED THESE TRUSTS FOR THE BABY BOOMERS!!!!!

EVERYBODY KNOWS THAT!

What this investment specialist recommends is exactly right.....all it would take is an increase in payroll taxes a little over 1% to fully fund Social Security indefinitely.


After the crash these dates have changed from 2046 to 2035 and now I am seeing 2023.  THIS IS OUTRAGEOUS AND IS ALL MIS-INFORMATION.  If your pundit uses anything other than SOCIAL SECURITY IS HEALTHY UNTIL 2075-----THEY ARE LYING TO YOU.

What has happened since this professional wrote his article in 2005 is this:

Massive fraud in corporate contribution to payroll taxes has occurred by gimmicks like declaring workers independent contractors when they are not.  Immigrant labor are being used with no payment of labor taxes and when business states the responsibility to pay taxes falls to the immigrant----it is rarely paid because they are impoverished for goodness sake.  SO, MASSIVE LABOR TAX FRAUD THIS DECADE HAS SEEN LOSSES OF PAYROLL TAX COLLECTION AND THAT NEEDS TO COME BACK.

The massive unemployment from the 2008 economic crash has for 5 years kept unemployment at historic levels----25% unemployed and this is lowering payroll contributions.  The crash happened because of massive financial fraud and those damages need to come back to the Trust funds as well as pensions.

As we see below workers up to $100,000 pay a tax and then that cap protects higher wage earners.  The policy of lifting that cap is the right one for making Social Security fully funded indefinitely!!!


An Overview of Social Security Benefits

By Bill Broich  2005 

Social security was established in 1937 as an emergency net for workers of this nation. It was to cover all workers and has grown to cover a wide range of benefits. These benefits are funded by worker payroll taxes and are paid into a fund managed by the federal government.

To be insurance and to receive benefits a worker is required to "pay in" for a minimum of 40 quarters (10 years). The amount paid in will depend on the amount of taxable income the worker earns. Current laws require anyone earning up to $100,000 is taxed. Some restrictions apply when calculating the benefit such as to be covered a worker must have been covered by at least 6 quarters of the past 13 calendar quarters.

There are several ways to receive social security benefits. Here is a list of who can benefit.

Worker's benefit: This is a monthly payment payable for life to either a retired worker or a disabled worker.

Spousal benefits: This refers to a monthly income for a spouse or a retired or disabled worker.

Child's benefit: This is a monthly benefit for a dependent child of a deceased, disabled or retired worker.

Widow's benefit: This is a monthly retirement income for a surviving or former spouse of a deceased or disabled worker.

Factors effecting how social security is used and planned by the administrations.

1. The life expectancy has increased by 34% since 1938. By living longer the demand for retirement benefits has increased causing rates paid by workers to increase.

2. The high birth rate of baby boomers has caused a short term financial issue that has created some stress on the retirement fund. Once the baby boomers generation has passed through the numbers will be more in line with past planning.

When social security was originally conceived President Roosevelt promised that the income benefits would not be taxed for income tax purposes. In 1984 President Reagan changed the rules so that 50% of all social security benefits were taxed. In 1992 President Clinton changed the taxation rate to 85%. These current tax rates are still in effect.


Based on current projections, the social security administration has determined that enough funds are in place to keep the plan solvent until 2075. A suggested increase in the amount of income that is included in social security calculations from the current $100,000 of taxable income to $125,000 will provide additional solvency to the projected year of 2150.


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Posts Tagged ‘Reagan payroll tax hike of 1983’

How the Wealthy Took Tax Cuts and Why They Now Want to Clip Social Security.

Saturday, December 1st, 2012

Kevin Drum, a political columnist for Mother Jones, writes a brief explanation why Republicans are demanding Social Security be ‘on the table’ for spending cuts.   Essentially, Drum explains, Social Security payroll taxes, which are paid primarily by labor and the middle class, went into surplus under Clinton and that allowed for lower income taxes on the wealthy.  Going forward income taxes will need to be raised to continue making Social Security solvent because Social Security surpluses were drained by the Bush Tax cuts.  So the wealthy now want to renege on replenishing the Social Security trust funds.

Charles Krauthammer is upset that Dick Durbin says Social Security is off the table in the fiscal cliff negotiations because it doesn’t add to the deficit:

This is absurd. In 2012, Social Security adds $165 billion to the deficit. Democrats pretend that Social Security is covered through 2033 by its trust fund. Except that the trust fund is a fiction, a mere “bookkeeping” device, as the Office of Management and Budget itself has written. The trust fund’s IOUs “do not consist of real economic assets that can be drawn down in the future to fund benefits.” Future benefits “will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.”

What Krauthammer means is that as Social Security draws down its trust fund, it sells bonds back to the Treasury. The money it gets for those bonds comes from the general fund, which means that it does indeed have an effect on the deficit.

That much is true. But the idea that the trust fund is a “fiction” is absolutely wrong. And since this zombie notion is bound to come up repeatedly over the next few weeks, it’s worth explaining why it’s wrong. So here it is.

Starting in 1983, the payroll tax was deliberately set higher than it needed to be to cover payments to retirees. For the next 30 years, this extra money was sent to the Treasury, and this windfall allowed income tax rates to be lower than they otherwise would have been. During this period, people who paid payroll taxes suffered from this arrangement, while people who paid income taxes benefited.

Now things have turned around. As the baby boomers have started to retire, payroll taxes are less than they need to be to cover payments to retirees. To make up this shortfall, the Treasury is paying back the money it got over the past 30 years, and this means that income taxes need to be higher than they otherwise would be. For the next few decades, people who pay payroll taxes will benefit from this arrangement, while people who pay income taxes will suffer.

If payroll taxpayers and income taxpayers were the same people, none of this would matter. The trust fund really would be a fiction. But they aren’t. Payroll taxpayers tend to be the poor and the middle class. Income taxpayers tend to be the upper middle class and the rich. Long story short, for the past 30 years, the poor and the middle class overpaid and the rich benefited. For the next 30 years or so, the rich will overpay and the poor and the middle class will benefit.

The trust fund is the physical embodiment of that deal. It’s no surprise that the rich, who didn’t object to this arrangement when it was first made, are now having second thoughts. But make no mistake. When wealthy pundits like Krauthammer claim that the trust fund is a fiction, they’re trying to renege on a deal halfway through because they don’t want to pay back the loans they got.

As it happens, I think this was a dumb deal. But that doesn’t matter. It’s the deal we made, and the poor and the middle class kept up their end of it for 30 years. Now it’s time for the rich to keep up their end of the deal. Unless you think that promises are just so much wastepaper, this is the farthest thing imaginable from fiction. It’s as real as taxes.

Beezer here.  Starting in 1983 payroll taxes were deliberately set higher than they needed to be.  Just another legacy from the Reagan era when the philosophy of gaming the tax system became a legitimate practice.  Hat tip to economist’s view for spotlighting Drum’s piece.


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Funds for the Old-Age, Survivors, Disability, and Health Insurance and the Unemployment Compen- sation programs are mostly raised by payroll taxes, which declined slightly in relative importance be- tween 1940 and 1950. Since 1950, however, the relative share of payroll taxes has risen sharply, so that by 1979 they provided 31 percent of Federal taxes. 
Federal Reserve of Richmond.

Reagan raised that considerably as did Clinton. 

WE HAVE PAID MORE THAN ENOUGH MONEY INTO THESE TRUSTS!



Reagan Started The Rape of the Social Security Trust Fund
by dissident voice
Sunday Sep 23rd, 2012 1:54 PM Long before Ryan and Romney tried to rape
the Social Security fund, Ronald Reagan actually did
Before Romney and Ryan started attempting to privatize Social Security Ronald Reagan removed 2.5 trillion dollars from the Social Security Trust Fund to be used to triple military spending.


How Ronald Reagan and Alan Greenspan Pulled off the Greatest Fraud Ever Perpetrated against the American People

http://dissidentvoice.org/2010/04/how-ronald-reagan-and-alan-greenspan-p/

by Allen W. Smith / April 14th, 2010

Dr. Allen W. Smith is a Professor of Economics, Emeritus, at Eastern Illinois University. He is the author of seven books and has been researching and writing about Social Security financing for the past ten years. His latest book is The Impending Social Security Crisis: The Government’s Big Dirty Secret. Read other articles by Allen, or visit Allen's website.



David Leonhardt’s article, “Yes, 47% of Households Owe No Taxes. Look Closer,” in Tuesday’s New York Times was excellent, but it just scratches the tip of the iceberg of how the rich have gained at the expense of the working class during the past three decades. When Ronald Reagan became President in 1981, he abandoned the traditional economic policies, under which the United States had operated for the previous 40 years, and launched the nation in a dangerous new direction. As Newsweek magazine put it in its March 2, 1981 issue, “Reagan thus gambled the future — his own, his party’s, and in some measure the nation’s—on a perilous and largely untested new course called supply-side economics.”

Essentially, Reagan switched the federal government from what he critically called, a “tax and spend” policy, to a “borrow and spend” policy, where the government continued its heavy spending, but used borrowed money instead of tax revenue to pay the bills. The results were catastrophic. Although it had taken the United States more than 200 years to accumulate the first $1 trillion of national debt, it took only five years under Reagan to add the second one trillion dollars to the debt. By the end of the 12 years of the Reagan-Bush administrations, the national debt had quadrupled to $4 trillion!

Ronald Reagan and Alan Greenspan pulled off one of the greatest frauds ever perpetrated against the American people in the history of this great nation, and the underlying scam is still alive and well, more than a quarter century later. It represents the very foundation upon which the economic malpractice that led the nation to the great economic collapse of 2008 was built. Ronald Reagan was a cunning politician, but he didn’t know much about economics. Alan Greenspan was an economist, who had no reluctance to work with a politician on a plan that would further the cause of the right-wing goals that both he and President Reagan shared.

Both Reagan and Greenspan saw big government as an evil, and they saw big business as a virtue. They both had despised the progressive policies of Roosevelt, Kennedy and Johnson, and they wanted to turn back the pages of time. They came up with the perfect strategy for the redistribution of income and wealth from the working class to the rich. Since we don’t know the nature of the private conversations that took place between Reagan and Greenspan, as well as between their aides, we cannot be sure whether the events that would follow over the next three decades were specifically planned by Reagan and Greenspan, or whether they were just the natural result of the actions the two men played such a big role in. Either way, both Reagan and Greenspan are revered by most conservatives and hated by most liberals.

If Reagan had campaigned for the presidency by promising big tax cuts for the rich and pledging to make up for the lost revenue by imposing substantial tax increases on the working class, he would probably not have been elected. But that is exactly what Reagan did, with the help of Alan Greenspan. Consider the following sequence of events:

1) President Reagan appointed Greenspan as chairman of the 1982 National Commission on Social Security Reform (aka The Greenspan Commission)

2) The Greenspan Commission recommended a major payroll tax hike to generate Social Security surpluses for the next 30 years, in order to build up a large reserve in the trust fund that could be drawn down during the years after Social Security began running deficits.

3) The 1983 Social Security amendments enacted hefty increases in the payroll tax in order to generate large future surpluses.

4) As soon as the first surpluses began to role in, in 1985, the money was put into the general revenue fund and spent on other government programs. None of the surplus was saved or invested in anything. The surplus Social Security revenue, that was paid by working Americans, was used to replace the lost revenue from Reagan’s big income tax cuts that went primarily to the rich.

5) In 1987, President Reagan nominated Greenspan as the successor to Paul Volker as chairman of the Federal Reserve Board. Greenspan continued as Fed Chairman until January 31, 2006. (One can only speculate on whether the coveted Fed Chairmanship represented, at least in part, a payback for Greenspan’s role in initiating the Social Security surplus revenue.)

6) In 1990, Senator Daniel Patrick Moynihan of New York, a member of the Greenspan Commission, and one of the strongest advocates the the 1983 legislation, became outraged when he learned that first Reagan, and then President George H.W. Bush used the surplus Social Security revenue to pay for other government programs instead of saving and investing it for the baby boomers. Moynihan locked horns with President Bush and proposed repealing the 1983 payroll tax hike. Moynihan’s view was that if the government could not keep its hands out of the Social Security cookie jar, the cookie jar should be emptied, so there would be no surplus Social Security revenue for the government to loot. President Bush would have no part of repealing the payroll tax hike. The “read-my-lips-no-new-taxes” president was not about to give up his huge slush fund.

The practice of using every dollar of the surplus Social Security revenue for general government spending continues to this day. The 1983 payroll tax hike has generated approximately $2.5 trillion in surplus Social Security revenue which is supposed to be in the trust fund for use in paying for the retirement benefits of the baby boomers. But the trust fund is empty! It contains no real assets. As a result, the government will soon be unable to pay full benefits without a tax increase. Money can be spent or it can be saved. But you can’t do both. Absolutely none of the $2.5 trillion was saved or invested in anything. I have been laboring for more than a decade to expose the great Social Security scam. For more information, please visit my website or contact me.

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Clinton knew this dynamic of payroll taxes to extend the life of the Trusts was good if it had actually gone to the Trust.  He knew as well that he was in the process of killing the middle-class with bank deregulation and free trade that would create massive wealth inequity and corporate rule.  This would lower payroll contributions as more people became unemployed and wages were less.

Cutting payroll taxes as was done these last few year further lowers contributions.  Clinton and neo-liberals figure since the money in the Trusts won't be there in a few decades might as well start defunding it as was done with all public pensions as well.  So when Clinton and neo-liberals say they want to FIX Social Security and Medicare what they are saying is that NOW THAT THESE TRUSTS ARE RAIDED HOW ARE WE GOING TO GIVE AMERICANS A RETIREMENT.  For neo-liberals that is the mandatory payroll tax deductions into 401Ks---


Clinton May Cut Payroll Tax to Spark Economy


JAMES FLANIGAN November 18, 1992  Los Angeles Times

If you read between the lines, it is clear that President-elect Clinton is ready to prod the economy by reducing the payroll tax--the amount deducted from paychecks for Social Security.

Doing so would increase take-home pay for more than 80% of the nation's workers and give a strong jolt to consumer spending.

Nothing has been formally announced, but Clinton tipped his hand at a press conference Monday when he spoke about "how regressive the tax system has become. . . . We've had six payroll tax increases which have fallen almost exclusively on people with incomes of $52,000 and less. . . . I would like to provide some tax fairness."

Clinton cited Senate Majority Leader George Mitchell (D-Me.), who has spoken out frequently on the Social Security tax, as an ally. And there is widespread support in Washington. "If you want middle-income tax relief, that's the way to do it," a congressional aide says.

The idea has logic. Social Security taxes actually have risen seven times since 1980--from 6.13% to 7.65%--and since they are levied on the first $55,000 of income, the impact has fallen disproportionately on middle-income wage earners.

But tax cuts present difficulties in a time of huge federal deficits--and may demand offsetting tax hikes. Clinton hasn't said much about offsets--although he plans to raise some taxes.

Ironically, says a Washington insider, Clinton seems bent on modeling his Administration on that of Ronald Reagan--"lower taxes first, ask questions later."


As usual, there are hopeful policies and reluctant trade-offs, and to appreciate them you must first understand why payroll taxes are rising--and how Social Security makes the federal deficit seem smaller than it really is.

Social Security taxes, by which active workers finance the retirement of previous generations, rose in the 1980s to build a reserve for the next century, when the unusually large baby boom generation--the 70 million people born between 1946 and 1962--enters retirement and starts collecting benefits.

That reserve is growing today because there are many more people working than retired; it is now $300 billion--and rising at about $50 billion a year.

The surplus is invested in Treasury securities, which lowers the federal government's dependence on global bond markets--meaning that the reserve keeps interest rates a bit lower than they might be.

But there is difficulty because the Treasury is using an accounting gimmick to disguise the fact that it is borrowing from the future.

When the government reported a deficit of $290.2 billion for fiscal 1992, which ended Sept. 30, it included as income that year's surplus funds in the trusts for Social Security, highways and airports and government employees retirement--a total of $96 billion, according to the Congressional Budget Office. So it could be said that the federal deficit for fiscal '92 was actually $386 billion.

That looks like phony accounting, and Clinton suggested as much Monday when he said "we hope the deficit hasn't been understated. . . . We're trying to get to the bottom of the figures."

And, yes, it is phony because money in a retirement fund is being borrowed for current expenses. "If the reserve were truly for retirement, it would be set aside and not put into the general fund," says economist Barry Bosworth of the Brookings Institution, an authority on Social Security.

In a sense, Americans today are like parents who set up a savings account for the kids' education but dip into it every Saturday night to party. When the tuition bills eventually arrive, the parents may scrape together the money, but it will be harder than if they had saved.

The Social Security surplus being spent today won't be there in 2025, when millions retire, and there will be virulent demands to raise taxes on the active workers of that day.

And more than future trouble is involved. The Social Security taxes that are being used to finance current government are inequitable. Workers earning less than $55,000 pay more than their fair share, while nothing is paid on wages above that figure--except for a new 1.45% tax to support Medicare.


So payroll deductions for Social Security are a regressive tax, and Clinton and Mitchell are right to want to lower them. Whether the bond markets send interest rates soaring because the deficit will rise is another story.

Clinton proposes to raise some taxes. "He'll bring roughly $14 billion a year into government revenues by hiking taxes on incomes over $200,000," says Margo Thorning, a tax expert at Washington's Council for Capital Formation. But other tax reductions, such as the investment tax credit, may offset that hike in revenue.

The payroll tax reduction could well be a net stimulus to the economy, of a kind not seen since Reagan's first term began in 1981 or Kennedy's in 1961.

The Democratic President may identify more with Kennedy than Reagan, but no matter. The important point is that his economic policies, like theirs, will be to go for growth.

Security and Opportunity?

The rate at which Social Security taxes are deducted from paychecks has gone up seven times since 1980--and income subject to the tax continues to rise every year.
It is that Social Security tax rate that President-elect Bill Clinton may lower to give the middle class a break. Source: Social Security Administration




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Here is a good article from the UK that looks at the US policy of fleecing Americans and their retirements.

So the Laffer curve says tax cuts for the rich? This isn't going to be funny The tax-and-growth theory beloved of Britain's Conservatives is a Reaganite throwback that will hurt workers and the poor

    • Michael Burke
    • theguardian.com, Wednesday 27 June 2012 14.07 EDT
Laffer was an associate of the Reagan administration, which had a staged cut in the marginal higher rate of income tax from 70% to 28%. Photo: Bob Galbraith/AP Two comedians have been put in the spotlight in the current debate that has been opened up on tax in Britain. One is Jimmy Carr. The other is Arthur Laffer.

Listeners to the Today programme on Radio 4 on Wednesday were treated to a knockabout interview with the architect of the Laffer curve: a graph which purports to show that lower tax rates for the rich will lead to higher tax revenues.

It's also a theory which has been widely discredited, both on a theoretical level and in practice. Because with the Laffer curve – perhaps unusually for economics – we have a historical instance of it being implemented by a direct proponent. Laffer was an associate of the Reagan administration, which had a staged cut in the marginal higher rate of personal income tax from 70% to 28%. The effect on the budget deficit was also striking. Reagan doubled it to $155 billion and tripled government debt to more than $2trillion. His successor, Bush senior, was forced to raise taxes as the deficit doubled again.

Not all taxes were treated the same. Payroll taxes were increased. So taxes were cut for higher earners while workers paid more. Corporate and capital gains tax rates were also cut in an earlier outing for current "austerity" policies, the transfer of incomes from labour and the poor to capital and the rich.

The Laffer curve relies on the twin assumptions that the rich create the output in an economy and that they need incentives to choose idleness over work. But there is little evidence to support these hypotheses. On the contrary, economists from Adam Smith to Karl Marx have known that all value in an economy is created by labour. Those who labour are obliged to work in order to purchase the necessities of life.

The question is why such an utterly failed policy is now being revived by the BBC, the Murdoch press and the Tory party. If Reagan had not been constitutionally barred from running for a third term, he probably would have won the 1988 presidential election by a landslide. Our own neo-Reaganites and neo-Thatcherites are desperately unpopular, and imagine aggressive tax cuts might restore their own poll ratings, despite the unpopularity of the last budget, which cut the marginal rate of income tax from 50p to 45p.

What they have forgotten, and what accounted for Reagan's popularity, is that the US government's budget deficit was funded by borrowing from abroad, primarily from Japan. Nobody in the US was forced to pay for it. This created the famous "twin deficits" on both the government's budget and on the external accounts of the whole economy. Reagan was able to simultaneously cut taxes for the rich and massively increase military spending in a successful attempt to bankrupt the Soviet Union while living standards rose for the majority of the population as the US went from a lender of capital to the rest of the world to a borrower from it.

It seems unlikely that even the US government will be able to repeat that trick now, let alone the British one. The major creditor nation now is China, but its purchases of US government debt seem to be on the wane as its trade surplus declines.

There will be no surge in support for the current government based on lower taxes for the rich (sometimes called "flatter" or even "fairer" taxes by the wilder Reaganites). This is because nobody else in the world is likely to pick up the tab for the inevitable reduction in living standards that otherwise follows.

But that is not to say tax cuts won't happen. Yet they can only come from cutting the incomes of workers and the poor. It will require stoking up resentments against the low-paid, immigrants, Muslims, foreign governments and the EU. It won't be funny.

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October 27th, 2012

10/27/2012

0 Comments

 
WHILE WE MUST VOTE FOR OBAMA OVER ROMNEY WE ARE WORKING TO BE RID OF THE INCUMBENT FARM TEAM......OUR POLITICIANS FOR LIFE.  AS WE MOVE AMERICA BACK TO BEING A DEMOCRACY AND A RULE OF LAW NATION, WE NEED TO BE RID OF ALL THIRD WAY CORPORATE DEMOCRAT INCUMBENTS.......WHICH ALL MARYLAND DEMOCRAT INCUMBENTS ARE! 

THE HIGHEST COMPLEMENT FOR ME IS HEARING SOMEONE TELL ME THEY WERE TOLD NOT TO BELIEVE THE BLOGGERS! IT MEANS WE ARE HAVING AN IMPACT.

REMEMBER, WE ARE MOBILIZING TO PETITION TO REFERENDUM IN BALTIMORE A RETROACTIVE TERM LIMIT ON ALL BALTIMORE'S ELECTED OFFICES AND THE RIGHT TO RECALL ALL ELECTED OFFICIALS IN BALTIMORE.  WE NEED TO ORGANIZE FOR SIGNATURE COLLECTION.  THE NEXT ELECTION IS IN TWO YEARS!!!!!

VOTE YOUR INCUMBENT OUT OF OFFICE!!!!

WE ARE VOTING FOR A WRITE-IN AGAINST CARDIN, SARBANES, AND CUMMINGS THIS ELECTION TO SEND THE MESSAGE THEY ARE NOT WORKING FOR THE PEOPLE AND BECAUSE:

THEY VOTED TO BREAK THE GLASS-STEAGALL BANKING WALL THAT UNLEASHED MEGA-CORPORATIONS THAT ARE UNACCOUNTABLE AND WORK TO IMPOVERISH PEOPLE.  THESE POLS KNEW THIS WOULD HAPPEN.

THEY HAD THE CHANCE WITH A SUPERMAJORITY TO ADDRESS ALL THE PROTECTIONS NEEDED FOR PEOPLE'S PENSIONS, RETIREMENTS, ENTITLEMENTS, AND SAFETY NET FUNDING.  NONE OF THESE PROTECTIONS HAPPENED.

THEY SPENT 2 YEARS ON FINANCIAL, HEALTH, AND EDUCATION REFORM ALL OF WHICH PROTECTS CORPORATE PROFITS AT THE EXPENSE OF THE PEOPLE.  FINANCIAL REFORM HAS BEEN GUTTED BY BANKS.  HEALTH CARE REFORM IS ABOUT CREATING MEGA-HEALTH SYSTEMS THAT WILL PREY ON THE OLD AND POOR JUST LIKE WALL STREET BANKS.  IT IS MEANT TO MARGINALIZE MOST PEOPLE INTO PUBLIC HEALTH LEVEL OF CARE.  EDUCATION REFORM IS ABOUT PRIVATIZING/VOCATIONALIZING ALL PUBLIC EDUCATION.  THESE GUYS CHAMPIONED THIS!

THEY KEPT SILENT AND PRETENDED THERE WAS NO MASSIVE FINANCIAL FRAUD WHEN THE WHOLE WORLD SHOUTED AND PROVIDED COPIOUS PROOF OTHERWISE.  THEY WORKED TO CREATE THE CONDITIONS FOR FRAUD AND THEN PROTECTED THE FRAUDULENT PROFITS AND PEOPLE COMMITTING FRAUD.......THAT IS AIDING AND ABETTING ------A CRIME IN AND OF ITSELF!

THEY ALL PLAN TO CUT ENTITLEMENTS AND SAFETY NETS AS A COMPROMISE IN DEFICIT REDUCTION WHILE MASSIVE FRAUD NEVER COMES BACK AND TAXES ARE EVER LOWERED FOR THE CORPORATIONS CAUSING THE DEBT.  MAKING THE RICH PAY WHAT THE PEOPLE DO IS NOT A STRATEGY TO REVERSE INCOME INEQUITY.....IT INSTITUTIONALIZES IT.

THEY ARE SILENT AS BASIC DEMOCRATIC INSTITUTIONS LIKE FREE ELECTIONS/FREE MEDIA/CIVIL LIBERTIES/RULE OF LAW ARE TOSSED ASIDE MOVING AMERICA EVER CLOSER TO THIRD WORLD STATUS.  AS AMERICAN PUBLIC MEDIA SAID.....THE US WILL LOOK LIKE THE MIDDLE EAST BY 2020.

THEY ARE PUSHING PRIVATIZING ALL THAT IS PUBLIC UNDER THE GUISE OF PUBLIC-PRIVATE PARTNERSHIPS WHICH ARE SIMPLY A WAY TO HAVE TAXPAYERS PAY FOR ALL CORPORATE INFRASTRUCTURE, OFFER FREE JOB TRAINING AND RESEARCH AND DEVELOPMENT, AND  BI-PASS ALL LABOR LAWS.  YOUR FIRST BORN CHILD IS NEXT!!!


REFERENDUM ISSUES:


1 AND 2.  WE ARE VOTING AGAINST REDISTRICTING MAP AND GAMBLING BECAUSE THE GERRYMANDERING WORKS AGAINST MIDDLE/LOWER CLASS CITIZENS AS IT WORKS TO GIVE CORPORATE INCUMBENTS GREATER STRENGTH AND GAMBLING EXTENDS THE FINANCIAL ECONOMY THAT IS PERVASIVELY CRIMINAL.  WE WANT AN ECONOMY THAT CREATES SOMETHING TANGIBLE AND PROVIDES QUALITY OF LIFE........IPADS VS SLOTS.

3 AND 4. WE SUPPORT THE DREAM ACT AND THE MARRIAGE EQUALITY ACT BUT IF THEY ARE VOTED DOWN WE INSIST THAT LIVING WAGE BE ADDED TO THE CIVIL/HUMAN RIGHTS AGENDA TO PASS NEXT YEAR!

0 Comments

October 02nd, 2012

10/2/2012

0 Comments

 
I want to return to pensions and wages again for this week.  We heard last year that longevity for African-American men and women fell and this year it fell for low-wage white males.  We are seeing, since Clinton's Welfare Reform, a steady decline in longevity due to poverty and lack of access to health care. AS YOUR INCUMBENT TELLS YOU ENTITLEMENTS AND SOCIAL SECURITY RETIREMENT AGE NEEDS TO GO UP BECAUSE OF LONGEVITY, WE SEE AGES DECLINING IN JUST 20 YEARS FROM THE START OF THE  WAR AGAINST THE POOR.  As we know there is a steady push by corporations to shed benefits, both pensions and health care as part of this financial crisis.  Companies are feeling a pinch after all!  This is happening in the public sector as well with the economic downturn again being the driver.  We have watched this shedding of benefits for the past few decades by bankruptcy so this is a concerted effort, not necessity.  NOW WE ARE WATCHING AS LOCAL GOVERNMENTS DEFUND WHAT'S LEFT OF PUBLIC SECTOR PENSIONS.

Meanwhile corporate profits are soaring as your Third Way corporate Democratic incumbent votes for policy after policy that keeps those profits coming all at the people's expense.

VOTE FOR A WRITE-IN FOR SARBANES, CARDIN, AND CUMMINGS THIS NOVEMBER!

VOTE YOUR INCUMBENT OUT!!!
BE SURE TO READ TO THE BOTTOM AS AN ARTICLE EXPLAINS HOW PENSIONS WERE SERVED UP AS FODDER DURING THE LAST DAYS BEFORE THE CRASH.  PRIVATE AND PUBLIC PENSIONS ARE USED BY WALL STREET TO THE BENEFIT OF THE 5% OF SHAREHOLDERS!



Maryland benefit systems in peril  Posted: 3:00 pm Sun, September 30, 2012
By Alexander Pyles
Daily Record Business Writer

Maryland counties are funding only about 50 percent of their retiree pension and benefit systems, according to a study by the Maryland Public Policy Institute, in part because almost no local money is being spent on some post-employment benefits.
_________________________________________________

THIS IS WHAT THE FEDERAL RESERVE'S QUANTITATIVE EASING 3 IS REALLY ADDRESSING......FREE MONEY FOR CORPORATE PROFIT.  THESE CORPORATIONS HAVE WATCHED THEIR PROFITS SOAR AND INCOME INEQUITY WIDENS WITH THIS POLICY BY BERNANKE AS HE TELLS US IT IS FOR JOB CREATION.  I GUESS HE THINKS THAT WHEN THE CORPORATIONS HAVE MORE MONEY THAN GOD, THEN THEY WILL HIRE DOMESTICALLY.  DO YOU HEAR YOUR DEMOCRATIC INCUMBENT SHOUTING LOUDLY AGAINST THIS INCREDIBLE INJUSTICE?????

VOTE YOUR INCUMBENT OUT OF OFFICE!!!!


GE Ignores $100 Billion of Cash to Borrow $7 Billion By Charles Mead and Tim Catts - Oct 2, 2012 11:17 AM ET   Bloomberg Financial


General Electric Co. (GE) is refinancing $5 billion of debt even as it expects to generate $100 billion of cash in the next four years, showing confidence in its ability to invest at returns four times its borrowing costs.

The biggest maker of power-generation equipment sold $7 billion of bonds yesterday at an average 2.58 percent yield in the parent company’s first issue in almost five years. That compares with a 12 percent return that Chief Executive Officer Jeffrey Immelt said last week the Fairfield, Connecticut-based firm generates on its capital.

Enlarge image GE borrows at lower rates than the average for U.S. investment-grade issuers, whose bond yields dropped to an unprecedented 2.85 percent yesterday, according to Bank of America Merrill Lynch index data. Photographer: Matthew Lloyd/Bloomberg

The offering allows the company to use the cash it brings in for stock buybacks, dividends and acquisitions. While Immelt seeks to pare debt at GE’s finance arm, the offering may boost bonds of the parent by 22 percent to $11 billion next year.

“It’s a no-brainer,” Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia, said in a telephone interview. “It costs nothing to issue, so why would they use cash on hand” to pay off maturing obligations?


Total Assets   $700 billion
Samuels said at a tax forum in February that GE needs a tax system that will let it compete effectively with giant, foreign-based multinationals like Mitsubishi, Siemens (SI), and Phillips. However, their effective tax rates for earnings purposes last year were 40%, 31% and 26% respectively, compared with 7% for GE. (GE says its tax rate's been artificially low the past few years, and will soon rise.)
____________________________________________________
WE ALL REMEMBER IN 2008 WHEN THE ECONOMIC COLLAPSE BROUGHT ALL THIS PUSH TO GUT LABOR CONTRACTS BECAUSE OF THE DOWNTURN.  LABOR LOST SOOO MUCH UNDER THE GUISE OF STRESSED CORPORATE BALANCE SHEETS.  CORPORATE STOCKS WERE WELL PROTECTED BY BANK BAILOUTS AND THE FEDERAL RESERVES FREE MONEY.  THIS IS WHY SHAREHOLDERS RECOVERED THEIR WEALTH RIGHT AWAY.


Union approves GE labor deal Favorable vote expected to help chances for a local battery plant

By Scott Waldman and Eric Anderson Staff writers Published 1:00 a.m., Wednesday, August 5, 2009
Read more: http://www.timesunion.com/local/article/Union-approves-GE-labor-deal-545829.php#ixzz289yumOEj

SCHENECTADY — Union members, by a 2-to-1 ratio, approved a proposed labor agreement with General Electric Tuesday night.

The 785-363 vote was a major step in bringing a new $100 million GE battery plant to Schenectady County that would create 350 jobs. While union members voted for some concessions, the contract change also prevents permanent job cuts for years amid the nation's economic turmoil.

"It's job security," said IUE-CWA Local 301 Business Agency Carmen DePoalo. "That makes me feel good for the younger kids, and the older guys get out of here with a chunk of change."

The agreement's ratification comes as GE prepares to build heavy-duty, high-density batteries in the Capital Region. CEO Jeffrey Immelt announced the plans to build the plant at an appearance at GE's Global Research Center in Niskayuna in May.



GE also is seeking federal stimulus funds from the U.S. Department of Energy for the project. A decision is expected this week.

"We're delighted with the results," GE spokeswoman Chris Horne said after the vote. "This is a critical step in investing in the future of our Schenectady manufacturing."

She said the company expects to make a "formal announcement" as a result of the vote in the near future, but did not elaborate.

The state, meanwhile, is contributing $15 million of the cost of the battery plant.

GE turned to the union to get more savings; Tuesday's approval is expected to help.

The company wants to offer a voluntary retirement incentive program next year and a new competitive wage schedule that would reduce hourly wage rates by $10 for new hires at Schenectady and at the Global Research Center in Niskayuna.

The labor agreement will extend plant shutdowns next summer from two weeks to nine and during Thanksgiving week in 2010 at the Schenectady plant. It includes a cost-of-living wage increase freeze for the rest of the current contract, which expires in June 2011.

DePoalo has said his union has been talking with GE about bringing more work to Schenectady "for years." GE's requests were no surprise, he said.

DePoalo said the economy has been tough on local GE operations.

"The workload has been cut by 50 to 60 percent," he said. "It's actually horrific right now."

That's why the job security measures, which also include a moratorium on plant closings in Schenectady and Niskayuna through June 2011, were an important part of the agreement.

Schenectady County Legislature Chairwoman Susan Savage said after the vote that the union members acted in the best interest of the community.

"This is the biggest economic development announcement that would take place in the county in many, many years," she said. "This is a transformative vote today. It shows we're making a lot of progress as a community."

Mayor Brian U. Stratton, who has worked with the county for nine months to try to draw the new battery plant, called it the biggest economic news Schenectady has had in a decade. "This impact has yet to be seen," he said.

Though the downtown will benefit from 350 more people working nearby, DePoalo said the vote was bittersweet because it's a financial hit to his members.

"I hate losing money," he said. "I hate new employees coming in making less money."

__________________________________________________
THE REASONS THAT CORPORATIONS ARE PUSHING EMPLOYEE PAID PENSION PLANS RATHER THAN EMPLOYER CONTRIBUTION IS THAT THEY NEVER PAID INTO THEM TO BEGIN WITH AND NOW THE STOCK MARKET WON'T PERFORM WELL ENOUGH TO KEEP THEM FREE.  EMPLOYER CONTRIBUTION WAS ALWAYS A HOAX.  DID YOU HEAR COMPANIES COMPLAINING ABOUT COSTS?  SO NOW, IF THESE PLANS WEREN'T SHED IN BANKRUPTCY, YOU ARE BASICALLY PAYING INTO THEM AS A SAVINGS ACCOUNT (TAX FREE).  SO WE SEE CORPORATIONS WITH LITTLE LABOR COSTS, PAYING LITTLE TAX, AND GETTING FREE MONEY FROM THE FED.  THIS IS WHY THEY ARE NOT HIRING.


GE makes first pensions payment in 24 years Mark Cobley Financial News

28 Feb 2011 General Electric, the US conglomerate, is set to pay into its pension scheme for the first time in a quarter of a century - ending what may be the longest company 'pensions holiday' ever.

GE, founded in 1890 by Thomas Edison, is one of the biggest companies in the world and runs one of the world's biggest pension plans, too - the 38th biggest, in fact, according to consultancy Towers Watson.

It is also one of the best-funded - or at least it was, until the financial crisis took its toll. With $45bn in assets but a $2.8bn deficit, according to GE's 10-K form, filed on Friday, the time has finally come for the US conglomerate to bail out its fund.

GE hasn't made a payment into its pension fund since 1987, when it stopped for tax reasons, according to various online sources, including US pensions trade newspaper P&I [ http://bit.ly/hDdoze ].

Up until the latest crash, GE's plan was doing well financially, kept afloat by employee contributions and investment returns alone. It is mostly invested in equities and real estate and by 2007 it had a surplus of about $16bn.

That happy tale has been brought to a crunching end by the bond markets. Even while the equity markets have recovering from the crisis, pension funds everywhere have continued to suffer from low bond yields, which make their liabilities appear huge.

According to GE's 10-K filing: "The GE Pension Plan was underfunded by $2.8bn at the end of 2010 as compared to $2.2bn at December 31, 2009 ... the increase in underfunding from year-end 2009 was primarily attributable to the effects of lower discount rates, partially offset by a [13.5%] increase in GE Pension Plan assets."

The company also has a further $4.4bn obligation to the GE Supplementary Pension Plan, which isn't funded.

The company points out this still means its fund is 98% solvent, which is pretty good going compared to most of its peers in the US (and UK). It won't be making any pension payments this year. But in 2012, "we will be required to make about $1.4bn in contributions".

Pensions holidays used to be a common occurrence in the 80s and 90s - a way for companies to effectively claw back cash from pension funds running huge surpluses. But troublesome markets, stricter regulation and of course, improvements in life expectancy, have generally put paid to that.

Now it seems that not even GE, one of the biggest companies on Earth, can run a pension plan for free.

GE's spokespeople in London couldn't immediately be reached for comment this morning.

_________________________________________________
THIS IS WHERE ALL THE PRIVATE PENSION PLANS HAVE GONE OVER THESE FEW DECADES......SHED IN BANKRUPTCY AND HANDED TO THE GOVERNMENT AT CONSIDERABLE DOWN-SIZING TO THE WORKER.  BANKRUPTCY LAWS ARE WRITTEN TO MAKE IT EASY FOR CORPORATIONS TO DO AND IT HAS GOTTEN TO THE POINT THAT CORPORATIONS DELIBERATELY GO TO BANKRUPTCY COURT TO SHED PENSIONS.  LOOK CLOSELY AT THE BOLDED SENTENCE BELOW TO SEE THAT THESE PENSION INVESTMENTS WERE SAFELY INVESTED IN BOND FOR YEARS AND IN 2008, JUST AT THE TIME OF THE CRASH......THEY MOVED THESE PENSIONS TO STOCKS CAUSING A 23% LOSS. 

THIS IS FRAUD!!!!!       AND IT HAPPENED WITH ALL PENSION FUNDS.



Pension Benefit Guaranty Corporation

From Wikipedia,

Formed September 2, 1974[1] Headquarters 1200 K Street, NW
Washington, D.C.
38°54′8″N 77°1′43″W Employees 800 (2010) Annual budget $445 million (2009) Agency executives Joshua Gotbaum, Director
Vince Snowbarger, Deputy Director

Website www.pbgc.gov

The Pension Benefit Guaranty Corporation (PBGC) is an independent agency of the United States government that was created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at the lowest level necessary to carry out its operations. Subject to other statutory limitations, the PBGC insurance program pays pension benefits up to the maximum guaranteed benefit set by law to participants who retire at age 65 ($54,000 a year as of 2011).[2] The benefits payable to insured retirees who start their benefits at ages other than 65, or who elect survivor coverage, are adjusted to be equivalent in value.

During fiscal year 2010, the PBGC paid $5.6 billion in benefits to participants of failed pension plans. That year, 147 pension plans failed, and the PBGC's deficit increased 4.5 percent to $23 billion. The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets.[3]

CRevenues and expenditures The PBGC is not funded by general tax revenues. Its funds come from four sources:

  • Insurance premiums paid by sponsors of defined benefit pension plans;
  • Assets held by the pension plans it takes over;
  • Recoveries of unfunded pension liabilities from plan sponsors' bankruptcy estates;[4] and
  • Investment income.
PBGC pays monthly retirement benefits to approximately 631,000 retirees of 3,800 terminated defined benefit pension plans. Including those who have not yet retired and participants in multiemployer plans receiving financial assistance, the PBGC is responsible for the current and future pensions of about 1.3 million people.[5]

The PBGC regularly updates its investment strategy. In 2004, it chose to invest heavily in bonds.[6] Under new leadership, the agency in 2008 shifted a substantial portion of its assets into stocks.[7] Because of the market decline, PBGC's equity investments lost 23% during the year ending September 30, 2008.[8]


Pensions and bankruptcy Several large legacy airlines have filed for bankruptcy reorganization in an attempt to renegotiate terms of pension liabilities. These debtors have asked the bankruptcy court to approve the termination of their old defined benefit plans insured by the PBGC. The PBGC has attempted to resist these requests.

The PBGC would like required contributions (a.k.a. minimum contributions) to insured defined benefit pension plans to be considered "administrative expenses" in bankruptcy, thereby obtaining priority treatment ahead of the unsecured creditors. The PBGC has generally lost on this argument, sometimes resulting in a benefit to general unsecured creditors.

In National Labor Relations Bd. v. Bildisco, 465 U.S. 513 (1984), the U.S. Supreme Court ruled that Bankruptcy Code section 365(a) "includes within it collective-bargaining agreements subject to the National Labor Relations Act, and that the Bankruptcy Court may approve rejection of such contracts by the debtor-in-possession upon an appropriate showing." The ruling came in spite of arguments that the employer should not use bankruptcy to breach contractual promises to make pension payments resulting from collective bargaining.


PBGC BENEFITS MARYLANDSTATEWIDE IN MARYLAND:
  • In 2011 PBGC paid approximately $146 million to more than 17,600 Maryland retirees in failed plans.
  • PBGC insures 490 pension plans sponsored by Maryland companies, covering more than 640,000 people.
NATIONWIDE:
  • In 2011 PBGC paid $5.3 billion to 787,000 retirees.
  • 700,000 more Americans will get their pension from PBGC when they're eligible to retire.
PBGC WORKS TO KEEP PENSION PLANS FROM FAILING:
  • In 2010-2011 PBGC helped dozens of companies keep their pension plans when they emerged from bankruptcy, saving benefits for 300,000 Americans.
  • Since 2007 PBGC has worked with companies to get an additional $750 million put into the pension plans of 80,000 workers.
BENEFITS TO YOUR CONGRESSIONAL DISTRICT:
  • Check the table below to see how much PBGC paid retirees in your district in 2011. Don't know your congressional district? Hover over the map to find it.

0 Comments

September 20th, 2012

9/20/2012

0 Comments

 
WE HAVE SPOKEN OF THE NEW FRONT FOR WALL STREET AND CORPORATE POLITICAL ATTACK THROUGH FRAUD.......OUR ENTITLEMENTS.  TODAY I'D LIKE TO BE SURE EVERYONE IS AWARE THAT IT IS HAPPENING TO SOCIAL SECURITY AS WELL.  BELOW YOU SEE THAT SOCIAL SECURITY DISABILITY HAS BEEN ALLOWED TO BE GUTTED BY FRAUD.  WE HAVE KNOWN FOR A DECADE OR MORE THAT CLINTON AND BUSH HAVE ALLOWED FOR ATTACKS ON SOCIAL SECURITY.....FIRST BY REAGAN'S MOVEMENT OF PAYROLL TAX FUNDS FROM THE TRUST TO THE TREASURY STARTING IN THE 1980S-----$3 TRILLION  HAS FAILED TO BE APPLIED TO THE TRUST.  DID YOU HEAR CLINTON OR YOUR INCUMBENT SHOUT LOUDLY ABOUT THIS? DO YOU HEAR THEM SHOUT NOW AS THE TREASURY USES BILLIONS TO BAIL OUT THE BANKS OF MONEY THAT IS FROM THESE SOCIAL SECURITY FUNDS FUNNELED TO TREASURY?  NO.

WE ALSO KNOW THAT THE GOVERNMENT ACCOUNTABILITY ORGANIZATIONS PROJECT THAT AS MANY AS 3/4 OF CITIZENS IN PUERTO RICO HAVE BEEN ON SOCIAL SECURITY DISABILITY AND NOW WE HEAR THE STATISTIC OF A 20% INCREASE IN SOCIAL SECURITY DISABILITY CLAIMS THESE FEW YEARS OF THE RECESSION AS MILLIONS OF UNEMPLOYED LOSING THEIR EMPLOYMENT BENEFITS APPLY FOR DISABILITY TO SURVIVE.  POLITICIANS THINK IT IS GREAT TO BLOW THIS ENTITLEMENT OUT OF THE WATER RATHER THAN HAVE THE BANKS PAY FOR THEIR CRIMES  ALL OF THIS WHILE THIRD WAY DEMOCRATS USE THE PAYROLL TAXES AS A TOOL TO REDUCE TAXES ON THE MIDDLE-CLASS.  REDUCING PAYROLL TAXES REDUCES INPUT INTO THE ENTITLEMENT AND SOCIAL SECURITY FUNDS BURDENING THESE PROGRAMS EVEN MORE.

THIS POLICY IS DELIBERATE AND IS MEANT TO IMPLODE THESE PROGRAMS.  THIRD WAY CORPORATE POLITICIANS ARE NOT BEING FORCED BY THE TEA PARTY TO FIGHT FOR PAYROLL TAX REDUCTIONS.  TEA PARTY PEOPLE AREN'T FORCING YOUR MARYLAND INCUMBENT TO BE SILENT ABOUT THE LEVEL OF FRAUD KILLING SOCIAL SECURITY DISABILITY OR TO BE SILENT ON THE FAILURE TO BRING TRILLIONS OF DOLLARS IN FRAUD BACK TO OUR STATE AND LOCAL COFFERS TO REPLACE THE LOSSES.

DO YOU HEAR YOUR LOCAL MEDIA TALKING TO YOU ABOUT ALL THESE EVENTS AND BAD PUBLIC POLICY?  THEY ARE CAPTURED AND WE NEED TO DEMAND THEY RETURN TO BEING JOURNALISTS AND NOT MOUTHPIECES!  THEY WILL SIMPLY CONTINUE IF YOU DO NOT SHOUT LOUDLY AND STRONGLY AGAINST THIS.

ARE YOU WRITING, CALLING, EMAILING, AND ATTENDING RALLIES?  ARE YOU COMMENTING TO MEDIA AND INSTITUTIONS FAILING TO WORK IN PUBLIC BEHALF?

VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!

WE SEE BELOW THAT SOME NOISE IS STARTING TO SURFACE.  IT IS LATE, BUT IT WILL NOT BE EFFECTIVE IF ALL OF US DO NOT GET OUT AND SPREAD THE WORD!



_________________________________________________
BELOW WE SEE A SYMPOSIUM THAT ADDRESSES MUCH OF WHAT I SPEAK.  IT WAS ANNOUNCED THE DAY OF THE EVENT DO THERE ISN'T MUCH CHANCE OF ANYONE OTHER THAN THOSE LOOKING AT THE WYPR WEBSITE WILL KNOW ABOUT IT.  THE SAME WENT FOR THE LECTURE BY CORNEL WEST AT MARYLAND INSTITUTE OF THE ARTS ON LOSS OF CIVIL LIBERTIES.

WE ARE SEEING A DIRECT ATTEMPT TO KEEP MOST PEOPLE OUT OF THE INFORMATION LOOP.  A BLOGGER LIKE ME CANNOT OF COURSE PERUSE EVERY INSTITUTION'S CALENDAR FOR EVENTS AND AS I AM ACTIVELY LOOKING FOR THESE EVENTS,  YOU CAN SEE THE NEED FOR CHANGE IN HOW INFORMATION IS DISSEMINATED IN THE CITY.

I AM GLAD TO SEE A PROGRESSIVE SPEAKER AND SEE IT AT THE MARYLAND LAW SCHOOL.  THIS LAW SCHOOL HAS BEEN MORE AGGRESSIVE ON SOCIAL ISSUES THAN OTHERS IN THE AREA AND WE THANK THEM FOR THIS OPPORTUNITY.  I WILL SAY THEY WAITED TO PRESENT THIS SYMPOSIUM UNTIL AFTER MOST OF THE STATUTES OF LIMITATION EXPIRED ON THE FRAUDS AND AFTER ALL THE POLITICIANS INVOLVED IN THE CONSPIRACY ARE SET TO RUN AGAIN FOR REELECTION.

THIS WAS DELIBERATE!

The Maryland Law Review and Center for Progressive Reform
In Collaboration with the Center for Health and Homeland Security and

the Environmental Law Program
Proudly present

The 2012 Ward Kershaw Symposium
Too Big to Jail: The Roadblocks to Regulatory Enforcement


The Maryland Law Review will host the 2012 Ward Kershaw Symposium, "Too Big to Jail: The Roadblocks to Regulatory Enforcement," which will address the failure of the regulatory system to respond to the housing crisis, the BP oil spill, and other disasters in a proactive and effective manner. The regulatory system is meant to ensure that statutes enacted to improve quality of life and protect against potential dangers are fairly, efficiently, and effectively enforced across the country. From the mundane to the arcane, the regulatory system touches almost every aspect of modern life: banking, workplace safety, environmental protection, taxes, social security, food safety, the availability of medicine, natural disaster response, and many more. It is no surprise then, that when a disaster occurs, the media, politicians, and the public are quick to ask: where were the regulators? This question has only become more meaningful in recent years as incidents like the housing collapse, the BP oil spill, the Big Branch Mine Collapse, and salmonella outbreaks in multiple types of food have not resulted in many, if any, consequences from regulators. In light of these problems, this symposium will bring together scholars, practitioners, and regulators from different regulatory areas: health and safety, labor, banking, finance, and the environment, to discuss potential solutions to the current regulatory mess.

Schedule of Events:

Thursday, September 20th                    Ceremonial Courtroom

5:00pm - 6:00pm        Keynote Address: Brooksley Born, Former Chairwoman of the Commodities Futures Trading Commission (CFTC) and Retired Partner at Arnold & Porter

6:00 - 7:00 PM            Light reception in Atrium

7:00 PM - ??                Speakers' Dinner

Friday, September 21st                           Krongard Room

8:15am - 9:00am            Continental Breakfast
9:00am - 9:15am            Introduction and Welcome
9:15am - 10:15am          Identifying the Roadblocks to Regulatory Enforcement

          Moderator:        Rena Steinzor,
                                   Professor of Law, Univ. of Maryland Carey Law


          Presenters:        Michael Greenberger
,
                                   Law School Professor, Univ. of Maryland Carey Law


                                      Robert Weissman
,
                                   President, Public Citizen


                                      Tom McGarity,
                                   Joe R. and Teresa Lozano Long Endowed Chair in
                                   Administrative Law, University of Texas School of Law


10:15am - 12:00pm       Regulatory Enforcement and the Financial Regulatory
                                      System


          Moderator:        Michael Greenberger,
                                   Law School Professor, Univ. Maryland Carey Law


          Presenters:        Lynn Stout,
                                   Distinguished Professor of Corporate and Business Law,
                                   Clarke Law Institute, Cornell Law School


                                     Arthur E. Wilmarth, Jr.,
                                   Professor of Law & Executive Director, Center for Law,
                                   Economics & Finance (C-LEAF), George Washington
                                   University Law School


                                     William Black,
                                   Associate Professor of Economics and Law at the
                                   University of Missouri – Kansas City

                                 
                                   Wallace C. Turbeville,
                                   Senior Fellow, Demos


                                     Meyer “Mike” Eisenberg,
                                   Visiting Professor of Law, Willamette Univ. College of Law


12:00 - 12:15pm           Break

12:15pm – 1:00pm        Lunch

1:00 - 1:15pm               Break

1:15pm - 3:00pm           Enforcing Health, Safety, and Environmental
                                      Requirements


          Moderator:        Jane F. Barrett,
                                   Law School Professor and Director, Environmental Law Clinic,
                                   Univ. of Maryland Carey Law


          Presenters:        Brian Wolfman, Visiting Professor and Co-Director,
                                   Institute for Public Representation,
                                   Georgetown University Law Center

                                  
                                   David Uhlmann,
                                   Jeffrey F. Liss Professor from Practice, Director, Environmental
                                   Law and Policy Program, Univ. of Michigan Law School
                                  
                                   W. Warren Hamel,
                                   Partner, Venable LLP


                                      Lois Schiffer,
                                   General Counsel, National Oceanic and Atmospheric
                                   Administration


                                      Victor Flatt,
                                   Tom & Elizabeth Taft Distinguished Professor of Environmental
                                   Law, Director, Center for Law, Environment, Adaptation and
                                   Resources (CLEAR), Univ. of North Carolina Chapel Hill School of
                                   Law


3:00pm - 3:15pm            Wrap Up

Please contact conference coordinator, Brendan Hogan for more information. ______________________________________________
THIS IS AN ARTICLE THAT STATES VERY SIMPLY THAT THE FAILURE TO PROSECUTE AND EXACT MEANINGFUL FINANCIAL PENALTIES WILL BECOME THE NORM BECAUSE PEOPLE ARE NOT SHOWING THEIR OUTRAGE.  IF THIS IS ALLOWED TO STAND, WE WILL HAVE A SOCIETY WHERE IT IS IMPOSSIBLE FOR THE MIDDLE-CLASS TO MAINTAIN ITSELF AS FRAUD DIRECTLY HITS THEIR ASSETS AND BOOM AND BUST FROM THE FRAUD KILLS THE ECONOMY OVER AND AGAIN.

STAND UP AND FIGHT BACK!!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!

Deferred Prosecution Agreements and Cookie-Cutter Justice
By PETER J. HENNINGCarolyn Kaster/Associated Press

Lanny A. Breuer, the head of the Justice Department’s criminal division.Lanny A. Breuer, the head of the Justice Department’s Criminal Division, last week spoke to the New York City Bar Association, extolling the virtues of deferred and nonprosecution agreements as the new standard for how the Justice Department deals with criminal conduct by corporations.

It is not just corporate investigations that are being concluded with these agreements. They have been used recently with individuals to resolve investigations, like the recent agreement with the cyclist Floyd Landis over possible fraud charges. The Securities and Exchange Commission has also embraced them as a means to wrap up civil securities fraud cases.

But are these agreements all they are cracked up to be as an enforcement tool? Or do they let corporations off too easily? Like anything in the world of white-collar crime, there are good reasons to use them, but questions remain about whether they should be the norm for policing corporate misconduct.


Deferred and nonprosecution agreements are contracts with the government in which a company (or individual) undertakes specified actions in exchange for charges being dismissed or not filed altogether. The terms usually require payment of a fine, continued cooperation with any investigations or trials and a commitment to enhance internal controls. If the agreement is breached, the agreement typically permits prosecutors to restart the case and use any admissions by the company in the a subsequent proceeding.

A significant advantage to these agreements is that there is no judicial involvement, so the Justice Department does not have to worry about a judge second-guessing its terms or questioning the fairness of the resolution.

Mr. Breuer stated that the growing use of these agreements had meant “unequivocally, far greater accountability for corporate wrongdoing – and a sea change in corporate compliance efforts.” He pointed to the recent agreement with Barclays over manipulation of the London interbank offered rate, or Libor, as an example of how companies pay a heavy price when the settle, citing the replacement of the bank’s top management.

But a close look at the Barclays settlement does not show the Justice Department being as tough as advertised. The only discussion of the involvement of senior managers is buried in the press release with a bland reference that “members of Barclays management directed that Barclays’s Dollar Libor submissions be lowered.”

There was no specific mention of the former chief executive, Robert E. Diamond Jr., or the chief operating officer, Jerry del Missier, who lost their positions only after significant pressure from the British Parliament, not the Justice Department.

The promised accountability from the agreements does not always mean companies will be completely reformed. James B. Stewart of The New York Times, in a column in July, discussed multiple settlements by the Swiss bank UBS with the government for violations, including receiving immunity in the Libor investigation, which seem “to have had scant, if any, deterrent effect.”

Deferring charges is nothing new in the criminal justice system. Many drug- and alcohol-related prosecutions of first-time offenders permit the dismissal of a case when the person completes treatment. The juvenile justice system often uses diversion programs to allow offenders to avoid punishment through education and counseling.

The pivotal event in the rise of deferred and nonprosecution agreements in the corporate context was the demise of accounting firm Arthur Andersen, whose conviction for obstruction of justice in 2002 was later reversed by the Supreme Court. Thousands of employees lost their jobs because of conduct in firm’s Houston office related to its auditing work on behalf of Enron.

Mr. Breuer acknowledged that he had heard, and responded to, companies bemoaning the potential effects of a criminal prosecution on innocent employees and financial markets – the specter of Arthur Andersen. He frankly acknowledged that “Sometimes – though, let me stress, not always – these presentations are compelling.”

Companies facing potential criminal charges know they need to argue that a criminal conviction would be just this side of Armageddon, making sure to highlight the threat of lost jobs and economic turmoil to persuade prosecutors to give a deferred or nonprosecution agreement.

And those arguments certainly seem to work for publicly traded companies. This year, there have been 20 deferred and nonprosecution agreements so far, and over 150 since 2007.

Mr. Breuer is certainly right when he points out that criminal charges are not a very useful means of regulating corporations, so that prosecutors “sometimes had to use a sledgehammer to crack a nut. More often, they just walked away.”

Deferred and nonprosecution agreements allow for a more nuanced approach that extracts a penalty and imposes conditions on a company that are similar to the punishment it would receive from a conviction, but without all of the collateral consequences.

But use of the “sledgehammer” seems to have largely disappeared, so that a full-scale prosecution of a large corporation is at best a rarity. The banks caught up in the Libor investigation can certainly expect to settle with the Justice Department and other regulators, using the Barclays agreement as the template for resolving the case.

It seems as if we are coming perilously close to cookie-cutter justice in corporate criminal investigations. Everyone by now knows the drill: turn over the results of an internal investigation, highlight how damaging a conviction would be and then offer to pay the fine and put in place an enhanced compliance program. The press release almost writes itself, but it is the rare case in which senior management pays any price.

Deferred and nonprosecution agreements are here to stay because they give the Justice Department a means to police corporations while mitigating the full impact of the criminal law. They occupy a middle ground between the sledgehammer of criminal charges and giving a company a free pass. Whether they are the unalloyed good that Mr. Breuer portrayed them as is another question.


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WE HEAR MORE FROM EUROPEAN JOURNALISM THE SOCIAL UNREST CAUSED BY THESE FINANCIAL CARTEL'S CRIMINAL ACTS AND THE TROIKA.......THE IMF, THE ECB (OR OUR FED), AND BRUSSELS (OUR TREASURY).  WHAT IS HAPPENING THERE IS HAPPENING HERE AND THE TAXPAYERS ARE SAYING 'NO' REGARDLESS OF US GEITHNER'S ATTEMPTS TO GET EUROPE TO HAVE TAXPAYERS PAY FOR THE COLLAPSE!

Bank bondholders Burning sensation Taxpayers should not pay for bank failures. So creditors must
Jul 21st 2012 | from the print edition  The Economist



“THE only way to deal with moral hazard is to take out bank bondholders and have them shot,” says a hedge-fund manager. By “shot” he is not recommending actual executions, but saying that investors should suffer losses when the banks whose bonds they hold need rescuing. To date during the financial crisis this has been a rarity. Bondholders have been the Scarlet Pimpernels of finance—investors who prove elusive every time a bank’s losses are divided up.



The era of impunity is coming to an end. In the short term some creditors of Spanish banks may be forced to suffer losses as a result of a planned euro-zone rescue of that country’s financial system. Over the longer term regulators in Europe and America are rewriting rules to “bail in” bondholders by converting debt to equity. These moves may have a far-reaching impact on the price banks pay to borrow, and thus on what they end up charging for credit. And the transition to a system designed to protect taxpayers from expensive bail-outs may be a bumpy one.


To understand how bank bondholders ended up in their privileged position, you need to look at the capital structure of banks. Imagine a cake of many layers, each representing the bank’s liabilities. At the very bottom is a thin sliver of costly equity. This is the money that a bank’s shareholders have put into the business. Next comes a layer of “hybrid” or “junior” debt that is supposed to pad out the equity layer but is made of somewhat cheaper ingredients. Above that come various layers of debt that make up the main body of the cake. The thickest slices are bank bonds, or “senior unsecured debt”, and bank deposits. The icing on top is its “secured” debt, such as covered bonds or other loans and derivatives, where creditors can grab hold of assets if their loan is not repaid.

Dessert storm

These layers serve two purposes. When money is collected by the bank it is first paid out to those in the upper tranches, usually as fixed-interest payments on deposits or bonds. If anything is left it trickles down to the shareholders. But when losses are incurred, bites are taken out of the cake from the bottom first. In return for taking a chunk of the profits in good times, shareholders get wiped out in bad times.

This system worked very badly in the financial crisis. The first problem was that the equity layer was far too thin, and that banks were wary of imposing losses on holders of hybrid debt. There was not enough loss-absorbing capital in the banks to cope with the losses they incurred. So more equity had to be found.

The second problem was that this money tended to come from taxpayers. Senior bondholders were repaid in full in all but a handful of cases. Ireland is the most egregious example of a country plunging into debt in order to repay its banking system’s bondholders. This was partly for legal reasons: in many countries bank deposits and senior bank debt were in the same layer of the cake, so that one couldn’t take losses without the other also doing so, a politically unthinkable prospect. But the bigger reason was that regulators were terrified that if they imposed losses on bondholders they would cause a wave of panic across the financial system that would hit funding for all banks.

The pendulum has now swung. This is evident in the Spanish bail-out, where euro-zone governments are reluctant to put their own taxpayers’ money at risk while seeing Spanish bondholders and holders of hybrid debt being repaid in full. Holders of the lowest layers of debt in bailed-out banks are likely to see their debt converted into equity and to take losses. This is particularly controversial in Spain, because many of the holders of this type of debt are unsophisticated retail customers: horror stories are emerging of illiterate customers signing up for risk-bearing debt with their thumbprints.

Imposing losses on junior debtholders is one thing; trying to bail in senior bondholders is quite another. In a significant U-turn, the European Central Bank (ECB) has reportedly proposed imposing losses on bondholders in Spanish banks that collapse. That idea was rejected by European finance ministers because they worried it would spook markets.

It is only a matter of time. In Britain, Switzerland and the European Union rules are either now in force or being drafted that will force banks to ensure that at least some of their debt can be turned into equity in a crisis. Some of this debt may take the form of convertible bonds that convert at a specific trigger-point: Credit Suisse issued SFr3.8 billion ($3.9 billion) of this sort of debt on July 18th. Most will be ordinary bank bonds that can be converted by the regulator. Rules empowering the Federal Deposit Insurance Corporation to take over failing American banks achieve much the same result.



Yet imposing losses on bondholders risks unintended consequences. The first is that the cost of bank debt may rise a lot more than it has already. A decade ago big companies paid more to borrow than banks did. Now the opposite is true (see chart). This gap may widen further as investors price in the risk that governments will do all they can to avoid bailing out banks (although higher equity levels, the thicker bottom slice of the cake, also offer bondholders more protection from losses).

A second risk is that senior bank creditors will respond to the potential for losses in a way that makes the system less stable. They may make sure their loans are secured—which in turn increases the losses inflicted on the remaining unsecured creditors and thus the price they will demand. Or they may plump for short-term debt so that they can pull their money out in a flash. Such dangers underpin the case for a gradual transition to a bail-in regime, but do not undermine its desirability. A world in which bank bondholders expect to get shot is one in which taxpayers are safer.

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STATISTICS SHOW THAT OVER THIS PAST DECADE ALMOST 3/4 OF THE CITIZENS OF PUERTO RICO WERE ON SOCIAL SECURITY DISABILITY.  NOW WE SEE DISABILITY SERVING AS AN EXTENSION OF UNEMPLOYMENT BENEFITS AS PEOPLE STRUGGLE TO SURVIVE.  ONCE AGAIN OUR SAFETY NETS ARE BEING DELIBERATELY IMPLODED BY FRAUD AND YOUR INCUMBENT IS JUST LETTING IT HAPPEN.  DO YOU HEAR YOUR INCUMBENT SHOUTING LOUDLY AND STRONGLY ABOUT THIS INCESSANT THEFT OF OUR BENEFITS?  NO.  YOU WILL HEAR HIM/HER TELL YOU THAT BENEFITS WILL HAVE TO BE CUT BECAUSE THE TRUST IS RUNNING OUT.  ALL OF MARYLAND'S THIRD WAY DEMOCRATS VOTED FOR THIS DURING THE DEBT CEILING DEBATE.

VOTE YOUR INCUMBENT OUT!!!!!



Report: Disability benefits wrongly awarded
By Sam Baker - 09/18/12 01:37 PM ET The Hill Blog

Lax oversight is leading the government to approve disability benefits for people who can't prove that they're disabled, according to a report released Tuesday by a Senate subcommittee.

The report, spearheaded by Sen. Tom Coburn (R-Okla.), says more than a quarter of disability claims are approved despite inadequate or conflicting information.

That doesn't necessarily mean all of those claims should have been rejected, Coburn said at a hearing Tuesday — but some unfounded approvals are surely slipping through the cracks of an inadequate review process. The report does not address people who might have been wrongly denied disability benefits.


Coburn's report examined 300 approved applications for Social Security disability benefits. Its findings mirror an internal review the Social Security Administration conducted in 2011, which found insufficient reviews in 22 percent of disability determinations made by administrative law judges.

"I think Social Security is right on top of this," Coburn said.

Administrative law judges are under immense pressure to clear away a deep backlog of applications. Coburn's review uncovered examples of judges holding hearings that lasted only 10 minutes, at which the disability recipient didn't even speak. Some judges seemed to overtly ignore evidence indicating that applicants were probably able to return to work.

Coburn recommended a series of changes to the disability system, including updated standards for disability payments and a stronger quality-review process. Sen. Carl Levin (D-Mich.), who leads the investigative subcommittee that produced the report, said he disagreed with just one recommendation: requiring a government representative at all hearings held by administrative law judges.

Because the government wants to cut down on improper payments, leaving more money to help people who are actually in need, a government representative would reduce the number of cases in which judges overlook relevant evidence, Coburn said. Levin said it would be an "expensive and time-consuming duplication."


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LET'S BE CLEAR.....OBAMA AND ALL MARYLAND POLITICIANS PLAN TO CUT SOCIAL SECURITY.  IT IS THE ONE PROGRAM THAT IS HEALTHY AND IN NEED OF LITTLE ADJUSTMENT.  $3 TRILLION WAS SENT TO TREASURY FROM REAGAN'S TIME INSTEAD OF THE TRUST  AND WE LOST REVENUE WITH THESE PAYROLL TAX CUTS THESE FEW YEARS.  SIMPLY RAISING PAYROLL TAXES A SMALL BIT WILL SET SOCIAL SECURITY ON COURSE. 


THERE IS NO NEED TO CUT SOCIAL SECURITY!!!!!  

VOTE YOUR INCUMBENT OUT!!!!

Don't Call It 'Raising the Retirement Age,' Because That's Not What They're Doing
Posted on 09/07/2012 by Jim Naureckas 11As Dean Baker noted (Beat the Press, 9/7/12), corporate media mostly missed one of the major pieces of news in President Barack Obama's speech to the Democratic National Convention.

Barack Obama

Talking about the federal budget deficit, Obama said, "Now, I’m still eager to reach an agreement based on the principles of my bipartisan debt commission." Then, as he talked about what he would and wouldn't do to reduce the deficit, he included this line: "And we will keep the promise of Social Security by taking the responsible steps to strengthen it–not by turning it over to Wall Street."

"Responsible steps to strengthen it"–what does that mean? Dean Baker helpfully paraphrases:

President Obama implicitly called for cutting Social Security by 3 percent and phasing in an increase in the normal retirement age to 69 when he again endorsed the deficit reduction plan put forward by Erskine Bowles and Alan Simpson, the co-chairs of his deficit commission.

This would be a good thing for voters to know about, wouldn't it?

Baker's blog post explains the 3 percent thing–the result of proposed games with the cost of living adjustment. As for raising the retirement age, that requires further discussion–because that's one of the big lies of the Social Security discussion.

The thing is, nobody who proposes raising the retirement age is really proposing raising the retirement age. If you were just raising the retirement age, you'd have to wait until you were (say) 69 to stop working, but when you did, you get the same benefits that you would now if you retired at age 69.

But no one's proposing that–because that would save hardly any money. The way Social Security works is that you can retire whenever you want starting at age 62–but the longer you wait, the more money you get. The government tries to calculate it based on life expectancy so that whatever date you pick, you end getting (on average) about the same amount of money.

So when they "raised the retirement age"–as they've been in the process of doing for decades now–they didn't say that you couldn't retire at 62 anymore. They said that if you retired at 62, you'd get less money. And you'd get less money if you retired at 63, or 64, or 65, or….

There's a more accurate way than "raising the retirement age" to describe this policy of lowering the amount of money someone at any given age receives when they retire. It's "cutting Social Security benefits."




0 Comments

August 02nd, 2012

8/2/2012

0 Comments

 
Baby boomers must understand that the policy being implemented for the underserved now may be the policy you and I live under later.  We all know that the massive fraud that brought down the economy targeted seniors and their homes as well so much equity was lost to fraud.  Social Security has had its payroll funds sent to the Treasury Department rather than the Trust Fund for 30 years so there are $3 trillion in Social Security funds not included in the Trust balance.  Many think this money has been dispersed to banks by Treasury as no one can get an answer from the government as to how these funds are counted.  We call it a Social Security Trust Fund raid.  Regardless, if everything is left as it is, we will have enough for full funding for over twenty years and after that 75% of benefits would be made indefinitely.  We know that either way we have plenty of time to make small adjustments to keep SS healthy.

What these corporate politicians are doing when they say that we need to extend the retirement age has nothing to do with shortfalls and everything to do with maximizing human capital.  Collecting retirement takes that pool of money from corporations so they want you in the workforce.  Third Way Democrats are leading the way on this.  Obama and both Senate and House Democratic leadership voted for these cuts during the debt ceiling debates in the 'grand bargain' and they will do it again after this election.  I want to reintroduce what the 'grand bargain' did to entitlements so you know where your incumbent went on this.  In Maryland, all Third Way Democrats voted for the cuts to Social Security and Medicare.  The debt ceiling threat was a farce as we have gone a year without doing anything about the deficit and nothing has happened.  Remember, Democrats have the Constitutional right to ignore the debt ceiling as it is not a Constitutional requirement to cap debt.  No one wants the debt to go higher, but we don't want the 95% paying for the entire debt which is what is happening right now.  YOUR THIRD WAY DEMOCRAT DOES NOT HAVE TO VOTE AGAINST PROTECTING SOCIAL SECURITY AND MEDICARE ......IF THEY VOTE FOR IT....THEY WANTED TO.  THEY WILL HAVE US ALL LIVING IN POVERTY!

VOTE YOUR INCUMBENT OUT!!!!!

Are Social Security and Medicare crucial to your retirement security?


42429 people have answered this question: 
Not at all             Crucial 
 11%   3%   3%   5%   5%   73%  
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THERE IS A PROBLEM WITH DISABILITY ABUSE AND A NEED TO CHECK THE ABUSE.  THE PROGRAM IS A NECESSITY TO MOST PEOPLE ELIGIBLE.  IT IS TIED TO SOCIAL SECURITY AND AS SUCH NEEDS PROTECTIONS AGAINST FRAUD.  OF COURSE THE PEOPLE ABUSING DISABILITY ARE USUSALLY DESPERATE FOR A MEANS TO SUPPORT THEMSELVES WHEN NO JOBS ARE AVAILABLE.  SO FIX THIS PROBLEM WITH EMPLOYMENT WITH A LIVING WAGE.
O'Reilly as Paul Revere: The Disabled Are Coming
 
Posted on 07/06/2012 by Jim Naureckas  Fairness and accuracy in Rporting (FAIR)
 
Bill O'Reilly complained last night (
7/5/12) that there are too many disabled people in America:


Twenty years ago in June 1992, there were 3,300,000 Americans receiving federal disability payments. Today, 20 years later, that number is a record 8,733,000 workers on disability.

O'Reilly's not buying it for a second:

Why has the disability rate increased more than 100 percent? I'll tell you why. It's a con. It's easy to put in a bogus disability claim.

And according to O'Reilly, who compares himself to Paul Revere, this is a big sign that that "the country is in steep decline":


More than a 100 percent increase on the taxpayer dime. And that dime is getting a lot smaller.

In 1984, 85 percent of American workers paid federal income tax–85 percent. Now? 51 percent pay federal income tax. A decline of 34 percent. Why? Because of social justice, because the feds are allowing Americans who don't make much money to pay no income tax.

Now you might say, well, that's just fair. But the reality is America doesn't have any money, we're broke. And that is eroding our power in a big way.

One little problem with this analysis: Disability insurance isn't paid for out of income tax–it's covered by
Social Security taxes, which all workers pay. (It's actually a regressive tax, since it's not paid on income over $110,000.)

This is the kind of mistake you make when, like O'Reilly, you rely on comic strips to do your research for you:

By the way, I want to thank our pal Bruce Tinsley who writes the Mallard Fillmore cartoon strip for tipping me off to the federal tax number.

P.S.
U.S. GDP in 1992 was $8.3 trillion (in 2005 dollars). In 2011, it was $13.3 trillion. The United States is not broke; it's richer than it's ever been.

P.S.S. I do admit to regularly learning things from
This Modern World. But Mallard Fillmore is no Sparky the Wonder Penguin.
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WE NEED TO TAKE SERIOUSLY THE CORPORATE INTENT IN RIDDING THE US OF ALL ENTITLEMENTS.....AFTER ALL, OUR TAX MONEY IS FOR THEM ONLY!  I LISTENED TO A BBC REPORT THE OTHER DAY WITH A FINANCIAL REPORTER LAMBASTING THE UK SOCIAL SYSTEM TELLING ALL YOUTH OF THE UK THAT THE OLD ARE TAKING AWAY THEIR FUTURE WITH THESE PROGRAMS.  FORGET THE FACT THAT WE HAVE GAZILLIONAIRES AND A FINANCIAL SYSTEM THAT MAKES THE ITALIAN MAFIA LOOK LIKE SAINTS..........IT'S THE ENTITLEMENTS THAT ARE BRINGING THE COUNTRY DOWN!  THE SAME SOFT MESSAGE IS GOING OUT HERE IN THE US AS THEY YOUTH ARE BEING SOLD TO THE IDEA THAT THEIR MONEY WOULD BE BETTER IN THE MARKETS.........REALLY?
PLEASE TAKE TIME TO SAY A GOOD WORD ABOUT SOCIAL SAFETY NETS TO YOUTH IN YOUR NECK OF THE WOODS!

When those who say that individuals are mainly responsible are questioned further about whether the government should be responsible if individuals fall short, most agree that the government should be the ultimate backstop. Substantial majorities across all generations say the government should be mainly or partly responsible for ensuring that retired people have a minimum standard of living.
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EVERYONE WILL REMEMBER THE DEBT CEILING DEBATES AND THE PUSH TO EVOKE THE 14TH AMENDMENT.  IS WAS A SIMPLE SOLUTION AND USES THE TEA PARTY PASSION FOR THE CONSTITUTION TO BOOT.  PROGRESSIVES UNDESTOOD THAT WHEN OBAMA FAILED TO EVOKE THIS 14TH AMENDMENT CLAIM AND INSTEAD WENT WITH THE GRAND BARGAIN WE HAD A PRESIDENT DETERMINED TO SLASH ENTITLEMENTS RATHER THAN ONE WHO WANTED TO MAKE THEM STRONG.  WE ARE WATCHING AS AGAIN THIS BECOMES AN ISSUE.  ONLY A THIRD WAY DEMOCRAT WOULD FAIL TO USE THIS AS A WAY TO CIRCUMVENT THREATS FROM THE REPUBLICANS!  IF YOUR POLITICIAN ISN'T SHOUTING FOR THIS...

VOTE YOUR INCUMBENT OUT!!!!
 

June 21, 2012

The Debt Ceiling Escape Hatch
 By
DAVID FIRESTONE   New York Times

Nancy Pelosi during her weekly news conference June 21, 2012 on Capitol Hill in Washington, DC. Last year, when House Republicans pushed the government to the point of default by threatening not to raise the debt limit, there was a lot of frantic talk about using the Constitution as an escape hatch. Because the 14th Amendment prohibits any action that raises doubt about the public debt, the theory went, President Obama could declare the ceiling unconstitutional and simply ignore the House’s threat.

The idea was endorsed by Bill Clinton and several
economic scholars, but it never really caught on among elected Democrats. Mr. Obama expressed skepticism about it, and Democratic leaders – who lack the confrontational DNA of their Republican counterparts – decided not to push it.

But now that Speaker John Boehner is
promising a rerun of the whole fiasco within the next year, the Constitutional option is starting to have a little more appeal. On Wednesday, in a meeting with a group of columnists, Nancy Pelosi, the House Democratic leader, urged the president to use the 14th Amendment to protect the nation’s credit from another extortion attempt.

“You cannot put the country through the uncertainty” again, she said, according to
Matthew Yglesias of Slate.

Ms. Pelosi’s statement is an encouraging sign that Democrats may take a very different approach when Mr. Boehner reloads later this year or early next, whenever the current debt limit is reached. Led by Mr. Obama at his most naïve, the Democratic reaction to last year’s extortion was to negotiate, to seek a grand bargain that inevitably disintegrated when Republicans refused to raise taxes on the rich.

What they got instead was a brutal sequester of military and domestic spending--

parts of which are loathed by virtually everyone in Washington—that threatens to derail the economy when it begins next January. The crisis deeply damaged the country’s financial reputation, produced a
downgrade in its credit rating, and led to single-digit approval ratings of Congress.

Ms. Pelosi obviously doesn’t want to go through that again, and it’s hard to imagine why Mr. Obama would, assuming he is re-elected. If other Democrats begin pushing the idea that the debt limit is unconstitutional, it might stiffen the president’s spine to use the option, particularly now that Republicans have stated they will never again raise the limit without getting huge spending cuts in return.

It’s not as if he’d be ending a hallowed American tradition. The debt limit was always a fraud on the public, providing the illusion of a firm outside boundary to government borrowing when none was ever needed. Congress controls spending and taxes, and can raise or lower the debt as easily as it regularly used to increase the debt limit. A
terrific 1961 editorial in the Times chided President Kennedy for not trying to repeal this “meaningless” statute.

Using the 14th Amendment option would lead to a messy fight, and the legal outcome is far from clear. But it’s a fight worth having, because the alternative, as the country has seen, will be far worse


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EVERYBODY CONCERNED WITH THE FUTURE OF THEIR ENTITLEMENTS AND SOCIAL SECURITY MUST BE AWARE OF THE DISTINCTIONS YOUR DEMOCRATIC POLITICIANS ARE MAKING IN THESE TERMS:  UNFUNDED LIABILITY AND COMMON DEBT.  AGAIN, A SHAREHOLDER WHO BUYS A GOVERNMENT BOND IS PROTECTED AND HAS RIGHTS THAT THE PUBLIC WHO ENTERED A SOCIAL/CONTRACTUAL AGREEMENT TO LIMIT WAGES IN EXCHANGE FOR RETIREMENT AND BENEFITS.  YOU AND I AGREED TO A LOWER WAGE SCALE BECAUSE WE WERE ASSURED A FUTURE BENEFIT THAT WOULD PROTECT US AS SENIORS.  ONE OF THE MAJOR REASONS THAT THE GOVERNMENT IS NOW TELLING US THAT THE FUNDS ARE NOT THERE NOW IS THAT WE HAVE GONE THROUGH A FEW DECADES WHERE THE GOVERNMENT ALLOWED A LEVEL OF CRIMINALITY AND CORRUPTION THAT LED TO THE GUTTING OF THE PUBLIC COFFERS...........CLEARLY A FAILURE OF GOVERNMENT TO PROTECT ITS CITIZENS.  THE GOVERNMENT IS NOW BOUND TO SEEK AND RECOVER THESE PUBLIC FUNDS LOST BY FRAUD, THEFT, AND WASTE BEFORE ANY ASSESSMENT OF ABILITY TO PAY SAID BENEFITS CAN BE MADE.

I WOULD SUGGEST THAT ALL THESE THINK TANKS AND GOVERNMENT ACCOUNTABILITY AGENCIES NEED TO STATE THAT LOUDLY AND STRONGLY.  WE ARE NOT HEARING THIS COMMITMENT FROM OUR DEMOCRATIC POLITICIANS ------ WE ARE BEING TOLD THAT OUR SOCIAL CONTRACT DOES NOT STAND AGAINST MASSIVE FRAUD AND CORRUPTION. 

Tampa Bay Times PolitiFact

...................................
IT'S IMPORTANT TO UNDERSTAND WHY THESE POLITICIANS SEEM TO BE ABLE TO GO IN AND CHANGE OUR BENEFITS TO OUR DETRIMENT.  THEY ARE NOT LEGALLY OWED LIKE TREASURY BONDS.......BUT THEY SHOULD BE.  THIS IS WHY THEY COME IN AND LOWER COST OF LIVING INCREASES (COLA) AND CREATE CO-PAY SITUATIONS THAT MAKE THIS RETIREMENT BENEFIT  AND MEDICARE TOO LOW TO SUPPORT YOU IN OLD AGE.  OUR RETIREMENTS ARE JUST AS CONTACTUAL AS BUYING A GOVERNMENT BOND......PROMISES AND OBLIGATIONS WILL NOT DO!!!

WE REMEMBER THAT PUBLIC SECTOR PENSIONS ARE UNFUNDED LIABILITIES THAT ARE NOW BEING SLASHED.....

AND ALL ARE VICTIMS OF LOSSES BY FRAUD.....GET THAT MONEY BACK BEFORE CUTTING BENEFITS!

Defining an unfunded liability

Our main concern with Romney’s statement is that it counts obligations to be paid in the future as debt for today’s families. This might sound reasonable, but thinking of debt this way presents some tricky issues. What Romney did was take the amount predicted that we will owe over the next 75 years for Social Security and Medicare, subtracted what we will take in to fund them, and then divided that sum by the current total of households.

Technically, though, shortfalls in Social Security and Medicare aren’t unfunded liabilities, said J.D. Foster, an economist with the right-leaning Heritage Foundation. "Legally, they are not liabilities. They can be referred to accurately as promises or obligations." (He spoke with our sister site
PolitiFact Virginia last year on the same topic.)

Foster said the benefits do not qualify as liabilities because Congress can change the terms of Medicare and Social Security at any time.

Foster told us in an email for this article that Romney’s calculation is valid. However, the figures for unfunded promises differ from common debt.

Gary Burtless, an economist with the centrist Brookings Institution, also pointed out that future benefits for entitlements are not "owed" to seniors in the same way that the public debt is owed to the people and institutions who purchased U.S. government debt.

"Congress can and almost certainly will reduce the future benefits promised to people who will receive Medicare and Social Security in the future," Burtless said via email. "Moreover, even if Congress does NOT act before the Trust Funds are depleted, under current law Social Security and Medicare beneficiaries would receive less than the amount of benefits provided to current beneficiaries. "Why? Because the Secretary of the Treasury can only pay for those benefits out of the Trust Funds, and if the Trust Funds are depleted of cash, the rate of spending out of it will be limited to rate at which the Trust Funds are replenished with tax revenues flowing in under the current tax schedule."

Michael Linden, of the liberal Center for American Progress, said it’s silly to divide our current debt by the number of households because no one suggests that we equally apportion the debt and pay it all off tomorrow.

"How does it make sense to apply potential debt borrowed in 2085 to families today?" he asked.

Linden also said that while it’s true that revenues for Social Security and Medicare are projected to fall short of meeting needs over the next several decades, the U.S. will also face the obligation to pay for trillions of dollars on defense over the next 75 years.

"That’s because the real worry is not the gap between spending and revenue in any given program (even those that are supposed to have dedicated revenue streams), but the gap between overall spending and overall revenues," Linden said via email. "So my bottom line is that, while Mitt Romney’s math may be right, his implication is wrong, and his number is devoid of any actual meaning."

Still, Romney’s underlying point that there is a fiscal imbalance is sound.

Alan Auerbach, an economist at Berkeley and research associate at the National Bureau of Economic Research, said that by the numbers, Romney’s calculation is pretty much on target based on the government’s own projections. Auerbach said he has done similar
calculations.

"I would and do call these unfunded liabilities," he wrote in an email. "They differ from our explicit national debt liabilities in that we can reduce them by undertaking policy reforms, but under current policy they are indeed unfunded commitments. That is, they are obligations in excess of their dedicated funding sources (payroll taxes, premiums paid by Medicare enrollees, etc.)."
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THIS IS AN ACTION FROM EARLIER THIS YEAR.  WE SEE ALL OUR DEMOCRATIC LEADERS LINING UP FOR CUTS IN BOTH SOCIAL SECURITY AND MEDICARE.  WE MUST SHOUT LOUDLY AGAINST THIS AND

VOTE OUT OUR INCUMBENTS!!!
WE CAN REVERSE THIS IF THEY DO MAKE THE CUTS, BUT WE WILL NEED REAL PROGRESSIVES IN OFFICE.

CREDO ACTION

Tell Nancy Pelosi: Draw a line in the sand on cuts to Social Security, Medicare and Medicaid benefits We need to speak out now to stop House Democratic Leader Nancy Pelosi from agreeing to cut Social Security, Medicare and Medicaid benefits.

Recently, Leader Pelosi expressed support for the Bowles-Simpson plan that would have slashed Social Security benefits -
a plan that when it came out she rightly deemed "simply unacceptable." 1

And the Washington Post reported that last year she agreed to a "grand bargain" President Obama negotiated with John Boehner that would have slashed benefits not just for Social Security, but for Medicare and Medicaid too. 2

We've learned from past battles that preemptive concessions by Democrats can lead to disastrous outcomes.

That is why we're joining with former Senator Russ Feingold and Progressives United, the group he started, to help get Nancy Pelosi back on track.

Tell Nancy Pelosi: Draw a line in the sand on cuts to Social Security, Medicare and Medicaid benefits.

For years, Republicans in Congress have waged a crusade to end these programs, either by privatizing them or simply defunding them. And sadly, far too many Democrats have bought into the rightwing propaganda.

The fact of the matter is that Social Security, Medicare and Medicaid are three of America's most successful social programs, and are especially critical to poor and working families, seniors and the disabled. These vital programs also enjoy strong support virtually everywhere except Washington, D.C.

With President Obama and House Minority Whip Steny Hoyer on the record in favor of benefit cuts, it's crucial that Nancy Pelosi, the most progressive member of the Democratic Leadership, stand strong and draw a line in the sand on cuts to Social Security, Medicare and Medicaid benefits.

Furthermore, there's no reason for Democrats to be playing defense on these issues.

These programs continue to exist because Democrats have vocally defended them. And that strategy has worked, time and again.

Nancy Pelosi has previously played a critical role in stopping benefit cuts. We hope she will do so again.

Tell Nancy Pelosi: Draw a line in the sand on cuts to Social Security, Medicare and Medicaid benefits.

1. "
Nancy Pelosi Says She'd Back Simpson-Bowles Plan ," The Huffington Post, 04-27-12.
2. "
Obama's Evolution: Behind the Failed 'Grand Bargain' on the Debt," Washington Post, 03-17-12.


___________________________________
Here is a great solution to what we all know is a great problem.....as the middle/lower class has less access to healthcare our overall longevity will fall as the rich live longer.  RETIREMENT AGE SHOULD REFLECT LONGEVITY....THE HIGHER THE INCOME THE LONGER THE LIFE.
 
May 20, 2012, 9:51 pm
Entitlement Reform For the Entitled
By
EZEKIEL J. EMANUELPhiladelphia  New York Times

IF nothing is done about entitlement spending, and if our current tax breaks continue, then by 2025, tax revenue will be able to pay for Medicare, Medicaid, Social Security, interest on the debt and nothing else. The rest — defense, medical research, highways, education, energy — will have to be financed by deficits. Social Security’s funding is predicted to run short in 2033, Medicare’s trust fund in 2024.

Like much else in Washington, there is little bipartisan agreement on what to do about it. When it comes to Social Security and Medicare, Republicans emphasize cuts and privatization, while Democrats strongly oppose both approaches. Neither side was able to embrace the 2010 bipartisan Simpson-Bowles plan, which proposed lowering Social Security’s cost-of-living adjustments, increasing the taxable maximum income and raising the eligibility age to 69 by 2075.

But here is a better bipartisan reform: Graduated eligibility. Instead of having a fixed age at which people can get Social Security and Medicare, we should link the age of eligibility to lifetime wealth. The richer you are, the older you would have to be to be eligible for Social Security and Medicare.

Here’s how it would work. People in the bottom half of the lifetime earnings distribution would become eligible for normal retirement benefits at age 65 for Medicare and 66 for Social Security, just as they are today. But people in the next quarter of the lifetime earnings distribution would become eligible for the respective programs at 67 and 68, and those in the top quarter would become eligible at 70 and 71. All eligibility ages would increase over time, as they are scheduled to now.

In all income brackets, those choosing to retire later than the standard age would still receive higher Social Security benefits, called delayed-retirement credits. For those choosing to retire earlier and accept reduced benefits, on the other hand, nothing would change in the lower bracket, while the minimum age would increase in the two higher income brackets. And wealthier older people would have the choice of buying into Medicare at age 65, though they would have to pay for it before the age of 70.

Demographic changes since Social Security was first enacted are a good argument for raising the retirement age. In 1935, a man who reached the age of 65 was likely to live almost 13 more years (and a woman, almost 15). But today, Americans who reach 65 are likely to live nearly 19 more years.

But graduated eligibility also accounts for the fact that the rich live longer than the poor, and that the longevity gap is increasing. In 2007, the Social Security Administration did a study of mortality and income. Among 65-year-old men born in 1922, those with income in the top half lived an average of 2.2 years longer than those in the bottom half. But among 65-year-old men born in 1941, those with income in the top half were projected to live an average of 5.3 years longer. Thus, requiring wealthier Americans to wait five more years to claim Social Security and Medicare has the effect of giving an average rich and an average poor person nearly the same number of years of benefits.

This reform also combines several important values. The main reason Social Security and Medicare have such strong public support is that they are universal benefits; they are not just for the poor. With graduated eligibility, all Americans will still get benefits, regardless of income; the only thing that changes is when. And because the rich, on average, would live longer and get the same number of years of benefits as those in lower income brackets, the plan should appeal to those who still feel strongly that everyone should pay their fair share.

It also makes practical sense. Americans in the bottom half of the income distribution are more likely to have jobs in manual labor, which is more physically difficult for older people to perform. White-collar workers in the upper bracket don’t face the same physical demands. And their greater earnings mean they should be able to save more to support themselves longer.

Graduated eligibility should be based on lifetime earnings instead of any particular year’s income, which can be quite volatile. It would be administratively simple to determine each citizen’s lifetime earnings, because the Social Security Administration already has all this data. And this measure would have the benefit of encouraging personal responsibility; people making more than the median income would have an incentive to save. Anyone who earned a lot at one time but frittered it away would have to continue working longer.

Either in the lame duck Congressional session after the election or in 2013, there will surely be debate about a deal to address taxes and the deficit. Graduated eligibility should be on the table. It would not completely close the shortfall of the trust funds, but it would put Social Security and Medicare on a stronger financial footing, while reaffirming their universal nature and reflecting the fortunate fact that Americans are living longer.

______________________________________________________
THE YOUNGER GENERATIONS ARE GETTING BOMBARDED WITH PROPAGANDA MAKING THEM THINK THAT THEIR RETIREMENT MONEY IN THE STOCK MARKET IS A BETTER BET THAN SOCIAL SECURITY.  WE ALL KNOW THE CRIMINALITY OF THE MARKET AND THE FACT THAT ANY OF THESE INVESTMENTS WOULDN'T LAST.   WE HAVE A HARD ENOUGH TIME KEEPING SOCIAL SECURITY SAFE FROM POLITICAL RAIDS.  IT IS VERY IMPORTANT TO EDUCATE THE YOUNGER ADULTS ABOUT THE FAILURES BEING NOT IN THE PROGRAMS BUT IN THE POLITICIANS KEEPING THEM SAFE.......THE JUSTICE SYSTEM.


Released: November 3, 2011  Pew Research Center

The Generation Gap and the 2012 Election
 
Section 6: Generations and Entitlements
 
The policy debates over Social Security and Medicare are potentially cross-cutting issues for older generations. Silents, as well as many Boomers, place a high priority on these issues politically and are generally more resistant to major changes or reforms than are younger Americans. As a result, while Silents favor the GOP by wide margins on jobs and the budget deficit, they are as likely to prefer the Democrats when it comes to Social Security. Silent and Baby Boom generation voters who are the most dependent on Social Security, and those who say it is an important issue to their vote, back Obama over Romney by significant margins.

While there are sharp generational differences over entitlement policies and the importance of the issue, there is little evidence of generational resentment or friction over what government provides for seniors. Millennial voters are just as likely as Xers, Boomers and Seniors to say the government does too little, not too much, to support seniors, and young and old alike are more concerned that the programs will run out of money for benefits than about the burden maintaining current benefit levels puts on younger people.

Impressions of Social Security and Medicare When it comes to the two core entitlement programs serving seniors in America – Social Security and Medicare – there is broad consensus regarding their value to the nation as well as the precariousness of their finances.

Nearly nine-in-ten Americans say each of these programs has been good for the country over the years, and this includes at least eight-in-ten across all generations young and old. Similarly, roughly three quarters say these programs are in only fair or poor shape financially, and this view crosses generational lines as well.

Where the generations differ is in their evaluations of the current effectiveness of these programs. Only members of the Silent generation – the vast majority of whom receive Social Security and Medicare – say these programs do a good job of serving the people they cover. Majorities of Millennials, Generation Xers, and Boomers say the programs do only a fair or poor job.

The younger generations are more supportive of seeing the programs overhauled. Most Millennials (56%) and Gen Xers (66%) say Social Security needs major changes or a complete overhaul. By contrast, most in the Silent generation (62%) say the system works pretty well and needs only minor changes. Boomers, many of whom are on the cusp of receiving Social Security themselves, are more divided – 45% say they think only minor changes are in order, while 50% say major changes need to be made.

Entitlement Policy Proposals In keeping with their support for major changes, the vast majority of Millennials back proposals that involve some degree of privatization of Social Security and Medicare.

Fully 86% of Millennials support changing the system so younger workers can invest their Social Security taxes in private retirement accounts. And 74% of Millennials favor changing Medicare so future participants can use the benefit toward purchasing private health insurance. Support for both of these ideas drops off among older generations and they garner a decidedly mixed reaction from those in the Silent generation.

When it comes to proposals to gradually raise the eligibility age for these programs, there is substantially more support from those who are mostly retired than from those who are not. About half in the Silent generation favor gradually raising the Social Security retirement age and the Medicare eligibility age. Majorities across all younger generations oppose these ideas.

A third area of proposed entitlement changes – means-testing benefits to reduce what high income seniors receive – divide the country, but not along generational lines. About half (53%) of Americans favor reducing Social Security benefits for seniors with higher incomes as a way to address financial problems with the system, and there is no difference in levels of support across generational lines. Similarly, 55% of the public, including nearly identical percentages across generations, favor reducing Medicare benefits for higher-income seniors.

The Tradeoffs: Priority on Maintaining Entitlement Benefits Generally, the public is resistant to any cuts in entitlement benefits in order to reduce the budget deficit or reduce the tax burden. By 58% to 35%, most say keeping entitlement benefits as they are is more important than reducing the budget deficit. And by an almost identical 59% to 32% margin, more say that higher priority should be placed on avoiding future Social Security benefit cuts than on avoiding any Social Security tax increases for workers and employers.

Resistance to benefit cuts increases across generations, with both Boomers and Silents siding with preserving entitlement benefits by at least two-to-one. By contrast, Millennials are more divided on both of these questions.

Dependence on Social Security One factor strongly related to attitudes about entitlements is people’s reliance – or expected reliance – on these programs. A majority of retired adults (56%) say that Social Security is their main source of income. But among those who are not yet retired, two-thirds (65%) say Social Security will not be their main source of income in retirement, while only a 32% minority say that it will. When probed further, nearly a third (31%) of non-retired adults think they will end up getting no money from Social Security in their retirement.

Not surprisingly, experiences with and expectations about Social Security vary significantly across generations. Among those in the Silent generation – 84% of whom are retired – 58% cite Social Security as their main source of retirement income. Among these, 28% say it is (or will be) their only source of income in retirement, while 30% have other sources to supplement Social Security.

Millennials, currently ages 18 to 30, have starkly different expectations. More than seven-in-ten (72%) Millennials do not expect Social Security to be their main source of retirement income. In fact, 42% of Millennials think they will get no retirement income from Social Security at all, as do 35% of Generation Xers (currently ages 31 to 46).

While around one-in-five Baby Boomers (22%) say they are already retired, most are not, and their expectations about Social Security are mixed. Fewer than half (42%) of Boomers say that Social Security is or will be their main source of income in retirement, with about a quarter (24%) saying it is or will be their only source of income. A majority (56%) says they will have other sources of income that are more important during retirement, though most of these (35% of all Boomers) say they expect to get at least some income from Social Security to supplement their other sources.

People’s dependence, or expected dependence, on Social Security has a significant effect on their attitudes about Social Security policy. In particular, those who say Social Security is or will be their main source of income in retirement overwhelmingly favor maintaining entitlement benefits over deficit reduction as the bigger policy priority. This is particularly true among those in the Silent generation, who have mostly retired already, but also true among Boomers and younger people as well.

Similarly, those who are counting on Social Security as their own primary income source are far more opposed to raising the retirement age for Social Security eligibility. The link between personal need and views on this issue is notably strong among Baby Boomers. Boomers who say Social Security is or will be their main source of income oppose raising the retirement age by more than two-to-one (69% oppose, 29% favor) while Boomers who say other sources of income will be more important are divided (52% oppose, 47% favor).

Social Security Matters More to Older Voters Social Security trails well behind the job situation, the budget deficit, and health care as key voting issues in 2012. But it is clearly among the top issues for older voters – 45% of Silent generation voters cite Social Security as the most important (25%) or second most important (20%) issue to their vote – rivaling the 52% who say jobs, and slightly more than the percentages citing the budget deficit (39%) or health care (38%) as a top voting issue.

Among Baby Boomers, the job situation outranks Social Security as a top voting issue by two-to-one (66% to 33%), and the gap is even wider among Millennials and Generation Xers.

Financial reliance on Social Security is strongly linked to the importance of the issue to voters. Within the Silent generation, 59% of those who get most of their income from Social Security say it is a top voting issue, compared with just 29% of those who say it is not a main source.

The difference is nearly as large among Boomers – 48% of those who receive or expect to receive most of their retirement income from Social Security rate it as a top voting issue, compared with 23% of Boomers who get most of their income elsewhere.

Social Security and Voting Preferences Not only is Social Security a higher priority for Silent voters, it is a significantly bigger factor shaping voting preferences among Silents than among younger generations. Among all Silents, Mitt Romney holds a 13-point lead (54% to 41%) over Barack Obama. But among the half of Silent voters who rate Social Security as their first or second most important issue, Obama leads by 10 points (51% vs. 41%). Silent generation voters who do not prioritize Social Security favor Romney by two-to-one (64% to 32%).

The gap is somewhat narrower among Boomers: Those who say Social Security is important to their vote favor Obama by 10 points, while Boomers who do not favor Romney by 13 points. Because just a third of Boomers cite Social Security as a top voting issue, Romney holds a modest six-point lead (51% to 45%) among all voters in this cohort.

These gaps reflect the fact that those who prioritize Social Security tend to favor keeping the program unchanged, and tend to be more reliant on the programs, meaning they are typically from lower income households.

Future Concerns about Entitlements Across generations, there is broad agreement that the entitlement programs are not on sound financial footing. And there is considerable concern – again, among young and old alike – that in the future there may not be enough money to provide Social Security and Medicare benefits at their current levels.

By contrast, the possibility that keeping these benefits at their current levels may put too much of a financial burden on younger generations is less of a concern – even among young generations themselves.

Majorities of Gen Xers (70%) and Millennials (57%) say they are very concerned that financial shortfalls in Social Security and Medicare may lead to reduced benefits. Fewer Gen Xers (45%) and Millennials (41%) are very concerned that maintaining current benefits may excessively burden young people.

In this regard, Gen Xers and Millennials are in synch with Boomers and Silents; among both groups, more are very concerned about possible benefit reductions than by the possibility than keeping benefits at current levels may place too much burden on younger generations.

Few Think Government Does Too Much for Seniors Majorities of the public say the federal government does not do enough for older people (60%), the middle class (58%), poor people (57%) and children (57%). On the other hand, nearly two thirds (64%) say the government does too much for wealthy people.

More than half of each generation agrees that the government does not do enough for older people, including 64% among Baby Boomers and those in Generation X. The numbers saying this are slightly lower among the youngest and the oldest generations: 55% of Millennials and 52% of Silents say the government does not do enough for the elderly.

Notably, majorities of Democrats (69%), Republicans (52%) and independents (56%) say the federal government does not do enough for older people.

In addition to their agreement that the government does too little for the elderly, the youngest and the oldest generations both say the government does too much for the wealthy (62% and 63%, respectively). Similar majorities of Gen Xers (66%) and Baby Boomers (68%) say this as well. Substantial majorities of Democrats (76%) and independents (66%) say the government does too much for the wealthy; only about half of Republicans (49%) agree.

The Silent generation is least likely to say the government does not do enough for children. Just more than four-in-ten (44%) say this, compared with 64% of Gen Xers, 59% of Baby Boomers and 57% of Millennials.

On the other hand, the youngest generation is most likely to say that the government does not do enough for the poor: 62% of Millennials express this view, compared with 53% of the Silent generation. Nearly six-in-ten Boomers agree (57%), as well as 54% of those in Gen X.

Looking Out for Older People The public is divided over whether the government or individuals and their families should be mainly responsible for making sure that retired older adults have at least a minimum standard of living. The differences among generations on this question are relatively small.

Looking at the public as a whole, about four-in-ten (43%) say the government is mainly responsible for ensuring at least a minimal standard of living for older people, while 40% say individuals and their families are mostly responsible. More than one-in-ten (14%) volunteer that both are equally responsible.

Millennials and Boomers are nearly evenly divided. The balance among Gen Xers tilts toward the government (47% vs. 34%), while the Silents tilt slightly more toward individual responsibility (44% vs. 36%).

On this question, the divides are greater across income levels than the generations. Among those with household incomes of $75,000 or more, 51% say individuals should be mainly responsible for making sure older adults getting a basic level of care, while 33% say the government should be. The numbers are reversed among those with household incomes of less than $30,000 (53% say the government should be mainly responsible, 29% say individuals and their families.) Those with incomes between $30,000 and $74,999 are evenly divided (42% each).

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    Cindy Walsh is a lifelong political activist and academic living in Baltimore, Maryland.

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