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
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:
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.
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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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:
- There’s not much of a case that Detroit is systemically connected in those ways, and;
- 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.
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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