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President and Congress Paying Lip-Service to Saving Social Security & Medicare

President Obama and the Republicans in Congress have been and will continue to be engaged in a wrestling match over our national debt.  Our national leaders have been wrongly tying entitlement reform to the national debt issue.  The Republicans, in particular, seem to have conveniently forgotten what their patron saint, Ronald Reagan, said in a 1984 presidential debate in Louisville, Kentucky:

“Social Security has nothing to do with the budget…” ~ Ronald Reagan

Reagan was absolutely right.  Social Security and Medicare are funded through a payroll tax.  They are not a line item in the federal budget.  In fact, for years presidential administrations of both parties have raided the Social Security fund and used the money to mask  the actual size of the federal budget deficit, replacing the funds with IOU’s in the form of Treasury bonds.

As Obama and the Democrats and the Congressional Republicans have proposed entitlement reform, I’ve been struck by their apparent lack of understanding of the financial difficulties the average American faces.  Here are a few examples:

*The financial advisory firm Hello-Wallet recently found that 1 in 4 households will withdraw some or all of their retirement funds to meet their current daily living expenses.

*AARP reports that for the first time in history people over 50 now have accumulated more credit card debt than those under 50.

*A 2010 report from the Center For Economic Policy and Research found that “Employment in physically demanding jobs or jobs with difficult working conditions is a major cause of early labor market exit among older workers…”  This is an important factor to consider because physically demanding labor can result in the worker in their mid to late 50′s finding that they are no longer physically able to handle the demands of their job.  Those workers may find themselves out of a job, physically unable to do many of the jobs that are out there, and too young to retire with full Social Security benefits.  The earliest a person can retire is 62.  If they retire at that age they receive a reduced benefit level for the rest of their life.  Their benefit level does not increase when they reach the normal retirement age.

The common thread running through most of the ideas that both parties have put forth to save Social Security and Medicare is that they involve cutting benefits to beneficiaries.  Raising the retirement age has widespread support on Capitol Hill, and that action certainly results in less benefits for retirees over the course of their lifetime.  I’ll give some credit to President Obama.  His Affordable Care Act, for instance, ended the whopping over-payments to Medicare Advantage plans, and specifically bars the board that has been given the duty of coming up with says to cut fraud and waste from Medicare from including in their recommendations to Congress any measures that would reduce benefits to beneficiaries.  But Obama has endorsed using the Chained CPI formula for determining Cost Of Living Allowances for Social Security beneficiaries.  The Chief Actuary of the Social Security Administration has determined that use of that formula would result in an annual cut of 0.3-percentage points for the average recipient.  That works out to about $130 less per year for that average recipient.  While that may not seem like much, that money could be very important to the retiree living on a fixed income and seeing more and more of their money eaten up by ever-increasing food, utility, fuel, and medication costs.

For their part, the Republicans have long had a goal of dismantling the social safety net, including Social Security and Medicare.  They oppose any reform that involves bringing in more revenue.  They have a laser-like focus on the meme that reducing spending in Social Security and Medicare as the only way to save those programs.  And sadly, there are many Democrats who share that point of view.  What Obama and Congress don’t want you to know is that legislation was introduced in the last session of Congress which the Congressional Budget Office found that, if enacted it would save Social Security for the next 75 years—the furthest into the future that the actuarial tables are able to project.  It’s possible that Social Security and Medicare would be saved for years beyond that 75 year projection.  That legislation, introduced by Senator Bernie Sanders (I) of Vermont, never advanced to the floor of the Senate for a vote.  Obama did not press for Sanders’ bill to be passed.  Democratic leaders in the House and Senate did nothing to advance the passage of the legislation, and the Republicans were adamantly opposed to it.  With their actions President Obama and Congress proved that they are interested in paying lip-service to saving Social Security and Medicare; they are not really interested in doing what needs to be done to actually save them without hurting millions of Americans.

What that legislation introduced by Sen. Sanders would have done was eliminate the cap on Social Security taxes.  That cap on Social Security taxes is set at $113,700 for 2013; meaning that the Social Security (FICA) taxes are taken out on the first $113,700  of a person’s salary or wages.  Any wages or salary above that would not be taxed for Social Security.   No matter how much your wages are, you only pay the FICA on the first $113,700 of your wages.

If Sanders’ legislation had been passed and signed into law both Social Security and Medicare would be saved, with no benefit cuts to beneficiaries.  The Social Security tax is set at 7.65%.  Of that, 1.45% of that rate provides the funding for Medicare.   Here’s how the current system works for the person with $1-million in salary or wages.  They pay the FICA tax on their first $113,700 or a total of $8698.   Under Sanders’ proposal they would pay the FICA rate on their entire $1-million salary and would pay $76,500.  That means the current system is saving that average millionaire $67,802 in FICA taxes each year.  Their savings is more than 7-times the amount they pay.

A 2012 report by the Boston Consulting Group found that there are 5.1-million  households reporting income over $1-million.  That income may not be totally wages; there may be other sources of income such as property, stocks and bonds etc. which would be taxed at different rates and not subject to FICA.  But for illustrative purposes, let’s say that of that group there are 1.5-million households with salary or wages of $1-million.  How much money would they bring to Social Security and Medicare under Sanders’ legislation.  Crunching the numbers shows that those 1.5-million millionaires would bring over $1.14-trillion annually to Social Security and Medicare.

This year Social Security will pay out $820-billion and Medicare is projected to pay out $523-billion with a grand total of $1.343-trillion.  That money from those millionaires would nearly pay the total expenditure.  In 2011 some 142,823,000 individual tax returns were filed with the IRS.  That leaves about 141,323,000 to add their FICA payments.  Clearly, eliminating the earnings cap would save Social Security and Medicare for many generations to come.

Think of the kind of country we could have if Sanders’ approach was adopted by President Obama and Congress.  In his book, “Rebooting The American Dream” Thom Hartmann advocated that instead of raising the retirement age, we drop it to 55 and increase the benefits between 10 and 20-percent.   That would allow people to retire and enjoy full benefits before their bodies break down instead of working until the day they die.   Those retirees would be able to live modestly on Social Security instead of struggling to make ends meet.  By dropping the retirement age we would create more job openings for younger workers;  workers who would be able to pay off their student loans and spur the economy by buying houses, cars, and whatever grownup toys they desire.

Instead, we have an America where our president and Congress are united in their belief that the only way to save Social Security and Medicare is to enact measures that would reduce benefits to the people who have earned their benefits from those programs.  They may differ in some approaches and share the same vision in others, but they’ve both turned a blind eye to the one approach the CBO has said would save both programs for far into the future without cutting benefits in any way.

Day 150 (T 11/06/12) Conversations on Election Day 2012

Tuesday November 6, 2012

Summary:
Conversations on Election Day 2012; How Do You Decide? Courts & Money; ‘True the Vote’ Falsifies the Vote; Who Needs a President? Israel’s Apartheid on Palestine

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Hour 1
Jeremiah discusses Election Day decisions with our listeners today. Motivations for voting expressed: ‘lesser of two evils’, torture, jobs, and more. We have a diverse audience, listeners indicate their support for Rocky Anderson (J), Gary Johnson (L), Obama (D), Romney (R), Jill Stein (G), as well as writing in themselves for President. If you experience problems at the polls, you can call 1-866-OUR-VOTE.

Hour 2
How do you decide on who to vote for? And how do candidates who might not even have a chance of winning, decide to run anyway?

Courts & Money. Michigan has the reputation for the most expensive and most partisan. Plus the most intense political ads for judges.

Elections are the worst way to select judges. The process leaves judges beholden to party bosses, wealthy donors, and the whims of the very, very few people who actually bother to vote. ~ ANDREW ROSENTHAL, NY Times

Andrew Rosenthal reveals that Michigan law has a loophole that does not ensure that all money spent on political ads does not have to be disclosed, if those ads are “issue” ads. This is problematic for judicial races, where conflict of interests may come into play.

A group called ‘True the Vote’ dedicated to eradicating election fraud falsifies the forms used to gain access as observers at polling locations. Irony?

Hour 3
Bill Kauffman writes:

To invest in one man quasi-kingly powers over the 13 states then, 300 million people and half a continent today, is madness. And it didn’t have to be this way. ~ Bill Kauffman The American Conservative

. Did the Founding Fathers make a mistake in creating the president.

The food crisis in Palestine only seems to be getting worse. Israel controls the access to resources, Jews are in the minority, but Palestinians are forced to rely on Israel for resources at inflated prices. Isn’t it time we recognize that what is going on there can be called Apartheid?

A Better Way than the ‘Lesser of Two Evils’

When  people go the polls in November’s general election many of them will be faced with a dilemma at the top of the ballot. People have serious concerns about both Barack Obama and Mitt Romney.  They may decide who to vote for on the basis of which man would be the lesser of two evils.  Their options will be to vote for the man they believe will do the least harm to this country; vote for a third party candidate reflects their views but has no chance of winning; or simply not voting at all.

I’m not going to sit here and tell you which option you should exercise when you step up to cast your ballot and find yourself facing that dilemma.  I simply want you to know that there is a better way.

Here in America our most popular system of voting is the “Winner Takes All” system where the ballots are counted (hopefully) once and the person with the most votes is declared the winner.  I believe “Winner Takes All” is great for poker and bad for elections.  In other countries,  and indeed in some cities in this country, voting systems are used which give the voter more choices and third party candidates a genuine chance of being elected.

Instant Runoff Voting

The first such system is instant runoff voting.  In instant runoff voting each voter has one vote, but with that vote they can rank the candidates in order of choice:  1, 2, 3, and so on.  When the ballots are counted initially the first choices are counted.  If one of the candidates has a majority of first choices they’re elected.  But in instant runoff voting if no candidate has a majority of the votes another round of vote counting is done in which the ballots that had the last-place eliminated candidate as their top choice have that voter’s second choice counted.  If that round of vote counting does not produce a winner the process of eliminating the last-place candidate and recounting the ballots continues until one candidate receives a majority of the votes.

If we had instant runoff in place for the upcoming general election here’s how it would work in the presidential race.

A progressive might have Rocky Anderson at the top of the ballot with Dr. Jill Stein second and President Obama third.  If the initial count had no candidate with a majority of the votes and Rocky Anderson in last place, a second round of counting would be held in which that voter’s ballot would be counted for their second choice, Dr. Jill Stein.  If no candidate had a majority of the votes in that round, and Dr. Jill Stein was in last place, a third round of counting would be done with that ballot counted for Barack Obama.

Instant runoff voting (IRV) does not give extra votes to defeated candidates.  IRV is a one-person, one-vote system because in any given round of vote counting every person’s ballot can only be counted for one candidate.  Instant runoff voting can be compared to the two-round runoff system.  You vote for your favorite candidate in the first round.  If your top candidate survives that first round you keep supporting that candidate.  If they don’t you choose from among the remaining candidates.  Instant runoff voting’s constitutionality as a one-person, one-vote system has been upheld by both state and federal courts.

There are some advantages that come with instant runoff voting which must be noted.  First, instant runoff voting avoids third party candidates spoiling the election when splitting the majority vote.  For instance, in the 2000 presidential election some people believe that Ralph Nader cost Al Gore the election because he took away votes from people, especially in Florida, who may have gone for Gore.  Such spoiling of election results do not happen in IRV elections.

IRV can increase voter turnout because it gives every voter an incentive to participate. Their vote would still count even if their top choice candidate is defeated and eliminated.  Instant runoff voting can also elevate the debate because all of the candidates have an incentive to focus on issues, to attract voters to their positions, and to form coalitions.  Negative campaigning and personal attacks are much less effective in IRV elections.

Instant runoff voting gives voters more power because they can exercise a range of choices.  This system of voting does not inherently advantage or disadvantage any political group, ideology, or interest groups.  All of the parties are on equal ground.

If you believe that instant runoff voting sounds hard for the voters, consider this; all the voter has to do is rank one or more candidates.  It’s like going out for an ice cream cone.  The store has sold out of your first choice, fudge ripple.  So, you go with your second choice, blue moon.  If they don’t have that you go with your third choice, butter pecan.  That’s all there is to it.

And, if you think this voting system sounds very foreign, consider this:  Instant runoff is used to elect candidates to city offices in cities such as San Francisco, Oakland, Minneapolis and St. Paul, and Portland Maine.  Many major universities are using it for their student govenment elections, and the Academy of Motion Pictures uses it for awarding their awards such as Best Picture.

Instant runoff voting is great for electing one person to one office, but not so good for multi-seat elections such as congressional elections.  For those elections another system is much more beneficial.

Proportional Representation

The basic principle underlying proportional representation is that everyone should have the right to fair representation; all voters deserve representation and all political groups in society deserve to be represented in our legislatures in proportion to their strength in the electorate,  There are a number of proportional representation models in use.  In order to achieve the basic principles of fairrepresentation , all PR models in use have certain basic characteristics.

First, they use multi-member districts.  Instead of electing one person to one district as we do in the U.S., several people are elected.  These multi-member districts may be relatively small, with three or four members, or they may be larger with ten or more members.  The second characteristic of all PR systems is that they divide the seats in these multi-member districts according to the proportion of votes received by the various parties running candidates.  So, if the candidates of a party win 40% of the votes in a ten member district, they receive four of the ten seats–or 40% of the seats.  And if another party wins 20% of the vote, they get two seats, and so on.

That’s the basics of proportional representation voting.  As I mentioned, there are different models for achieving fair representation.

In Party List Voting each party puts up a list of candidates equal to the number of seats in that district.  Independent candidates may also run, and are listed separately on the ballot; as if they were their own party.  On election day the voters indicate their preference for a particular party, and the parties are then allocated seats in proportion to their share of the vote. The order of the candidates on the party’s slate is set by the party.  The voters have no say in which of the party’s candidates receive the seats allocated to them.  Thus, if the Democrats are allocated two seats, the top two candidates on the Democrats’ list would get those seats.  That’s the Closed Party List system.

Most European democracies now use the Open List form of party list voting.  In this form a primary election is held in which the voters vote for the individual candidates of their choice.  The orde of the party’s slate is set in that primary, with the candidates with the most votes winning placement at the top of the list.  Candidates at the top of the list have a greater chance of being elected.  In the general election the voters select the candidate of their choice, with their vote counting for both the party and the candidate.  When the seSats are allocated to a given party the candidates within that party with the most votes win those seats.

Here in the United States we would not be able to employ a classical proportional representation model in our Congressional elections.  Article 1  Section 2 of the Constitution sets the number of members in the House of Representatives at one representative for every thirty thousand people in each district.  So, we would not be able to have the multi-member representatives for each district characteristic in our PR system.  But that doesn’t mean that proportional representation couldn’t be used for our Congressional elections; we’d just have to come up with our own model.

For instance, we could drop that first characteristic of multiple representatives for a district and use proportional representation for allocating seats for single representative districts.  Here’s what that might look like.

As a result of the 2010 census, Michigan has 15 seats in theHouse of Representatives.  Suppose general election results had the Democrats with 45% of the vote, the Republicans with 40%, the Green Party with 8% and the Libertarian Party with 7%.  The Democrats would be allocated 45% of the seats or 7 seats.  The Republicans would have 40% of the seats or 6 seats.  The Green Party and the Libertarian Party, with 8% and 7% respectively would each be allocated one seat in our Congressional delegation.  One seat each for the Greens and Libertarians may not sound like much, but if other states also used this model the number of minority party members holding seats in Congress would certainly reach significant levels.  The minority parties would see their ability to advance their agenda increase significantly by forming coalitions with majority party members.

If proportional representation seems to be more complex than you can wrap your brain around consider this:  when you turn on your television you don’t need to know the technological ins and outs of television broadcasting.  All you need to know is how to turn on the TV.  Similarly, with proportional representation it’s not necessary for you to understand how seats will be allocated for Congress based on which party you voted for.  You won’t be counting the votes and allocating the seats in Congress.  And you can be sure that the parties will make sure they get every seat they’re entitled to.

Conclusion

Under our current model of holding elections, the two major parties hold a near monopoly on governing power.  Third parties have very little chance of winning state and federal electoral offices and putting forth the views of their supporters.  Third party voters are left with the choice of tilting at windmills by voting for candidates who share their views but have little to no chance of being elected; or voting for someone who they have significant issues or differences of opinion with—the lesser of two evils.

Instant runoff voting would strengthen the voice of the voters.  Voters would have the power to express more choice; and their vote could play a role in determining a winner much longer than our current plurality based “Winner Takes All” system.  Proportional Representation would give third parties a genuine chance of winning seats in the legislature or congress; and advance an agenda that reflects the views of their supporters.

When you step up to cast your ballot on election day and prepare to hold your nose and vote for the lesser of two evils, remember, it doesn’t have to be that way.   By adopting instant runoff voting and proportional representation we can strengthen the voice and power of the voter and give third parties a legitimate chance of winning elections and expressing the views and will of their supporters.

Ron Paul Visits West Michigan

HUDSONVILLE, MI – About 1500 people packed the Pinnacle Center in Hudsonville to hear Ron Paul speak in a surprise campaign visit Sunday evening, with 400 more standing outside in the cold listening to Paul’s words over a speaker.

The crowd included people who identified themselves as libertarian, liberal, and conservative, however most identified themselves as Greg Dykema of Hudsonville. “I don’t consider myself being bound to other people’s agenda. I believe inthe Constitution and that people should be able to live their own lives as long as it doesn’t harm the person of possession of another.”

Dykema, who wore a brightly lettered t-shirt that read “End the Fed,” said, “The Federal Reserve is a fraudulent system that keeps us in perpetual debt.” Ending the federal reserve and ending wars were Dykema’s top two concerns in this years election.

Ron Paul spoke for nearly an hour. He called the Patriot Act unpatriotic, referred to NDAA as unconstitutional, touched on the war on drugs as a failed policy and he said that the golden rule should be our foreign policy standard.

“We need to mind our own business,” Paul said. “You don’t have to give up liberties to be safe.”

Speaking in one of the most religiously conservative cities in West Michigan, Paul said, “We’ll never agree on how we want to use our freedoms. In a room like this there might be 50 different religious values and some with no religious values at all. But freedom answers the question because we don’t impose ourselves on other people. You do what you want.”

Ron Paul supporter of Berrien County, John Mumaugh, was standing closer to the street, sporting a big sign encouraging people to support medical marijuana legislation. “We are trying to get a Constitutional Amendment on the ballot, mainly because of the erosion of the Michigan Marijuana law that’s going on in the legislature.”

Just ahead of the upcoming primary on Tuesday, Ron Paul started his swing through Michigan on Saturday at Central Michigan University, before stopping in Hudsonville today.

Sally Brooks of Plainfield Twp, said, “I am here because I believe in freedom.”