Saturday, December 24, 2011

Retirees, Not Millionaires, Will Pay For Extension Of Unemployment Benefits

I read the bill recently passed by Congress which extends the payroll tax cut and unemployment benefits. The Republicans demanded terms that were unrelated and unacceptable to the Democrats and a few moderate Republicans. First the Senate then the House Republicans finally agree to extend the benefits and cuts for two months so that they had more time for debate. The Democrats accepted some of the Republican terms in order to get the temporary extension.

The Republicans wanted to require that all unemployment recipients take a drug test every month as is already required of some welfare recipients. I can't imagine my Mom having to submit a urine sample every time she picked up free food when we were on welfare. Congress compromised, the extension allows (instead of requiring) each state to determine if it will test all recipients for drugs and whether to deny benefits if drugs are detected. Florida required its welfare recipients to pass a periodic drug test. Only 4% tested positive but they spent more money than they saved by testing everybody. I’ll bet the incidence of drug use among temporary unemployed persons is lower than 4%. This is, in my opinion, a way of vilifying the unemployed. A favorite pastime of the self-righteous.

In order to pay for the extended benefits the Democrats wanted to tax people who earn more than one million dollars per year. Republicans disagreed with taxing the Rich - the Republicans demanded that retired persons who earn more than $88,000 a year pay more for Medicare in order to pay for the extension of unemployment compensation and tax cuts. Therefore, I will be paying more for Medicare so that millionaires don't have to pay more income tax. The bill doesn’t state how much more I will pay for Medicare but I am already paying twice the base amount so my guess is that they will probably triple the base amount.

Raising the cost of Medicare for fixed income retired persons instead of raising taxes on those that work and especially those that can afford it is immoral. I don’t really mind that I now pay $1,200 more each year for Medicare because I spent (not earned) more than $88,000 of my IRA savings. And, I don't mind paying $2,400 more for Medicare if everyone is paying a share based on their ability, but the cost is not being shared by all. Only retirees who make more than $88,000 will pay more -multi-millionaires will contribute nothing. I hate any politician who would rather charge the elderly more for their healthcare insurance than increase the tax rate of people who earn more than $1,000,000 per year.

Based on a past proposed rate hike, a person making $1,000,000 per year would not pay an additional tax. The additional tax would apply only to the earnings over $1 million. A person making $2,000,000 per year would pay an additional $5,000 or (0.25% of their total income). Instead, retirees who spend $88,000 of their savings will probably pay an additional $1,200 (1.4% of their income). That doesn’t seem fair to me but it sure makes sense to our congressional Republicans

146 million Americans live in poverty -less than $22,000 for a family of 4; less than $10,000 for a single person. The majority of these are employed or are members of a family with one or more employed people. Most of the people in poverty are working but earn less than $10 per hour. While the working class is making less this year than the year before, the average CEO earns 36.6% more this year than last year. The 10 highest paid CEOs earned a total of $770 million this year. Next year they are expected to earn more than $1 billion but they will not share in paying for the extension of unemployment benefits. I will.

Remember this when you vote in the next election.

Monday, December 19, 2011

Hypocrite Rick Perry Draws Huge Pension And Salary While Firing Teachers And Cutting Education

Rick Perry is being attacked for drawing a $92,000 annual retirement pension on top of his annual salary of $133,000.  Seems hypocritical when the state is trying to cut expenses by reducing salaries and benefits, reducing retirement pensions and increasing state employee payroll contributions toward their health care insurance and retirement.  Rick Perry says that he has earned his retirement benefit through payroll contributions during his 25 years of public service.  He says he is withdrawing what he contributed.

Sounds good doesn’t it.  But it’s not true.  I calculated how much he has probably contributed to his retirement and he doesn’t even get close to what he is and will receive.

Assume that his starting salary was $42,000 30 years before he started drawing his pension.

Assume that he got a 4% raise each year to reach his current salary of $133,000 per year when he started drawing his pension.

Assume that his retirement savings earned 6% annually.

Assume that he will draw a pension $92,000 per year, which he does.

If he only contributed 6.5% of his annual salary to his retirement, his retirement savings will be exhausted in less than 4 years.

Perry would have had to contribute 37% of his annual salary to his retirement fund in order to save enough to receive a pension of $92,000 per year for 30 years.  If he only contributes 6.5% his retirement savings at the time he starts drawing a pension will be SHORT $1,450,000.

So, Rick Perry is lying.  He will have spent much more than he has contributed to his retirement before he is old enough to qualify for Medicare and Social Security.  After that Texas taxpayers will be paying for 100% of his retirement for the rest of his life.

The same year that Perry started drawing his generous pension he cut education funding by $4 billion, plans to fire 43,000 teachers, eliminated scholarships for 29,000 low-income college students, reduced or eliminated financial assistance for 43,000 college students, eliminated the state’s medical primary care residency program and reduced funding for the family-practice residency by more than 70 percent.  All this while Texas has the lowest percentage of adults with high school diplomas and the highest percentage of uninsured residents.

Rick Perry puts Rick Perry first. 

Sunday, December 11, 2011

Newt vs. Union Janitors

In the Iowa debate Gingrich again proposed to give poor kids an opportunity to work by replacing half the union janitors in our schools, who, says Newt, make too much. Newt said that the starting salary for union janitors is twice as much as the starting salary for teachers.

Does anyone believe this? Is this part of his jobs plan or his unemployment plan?

The average starting salary for teachers in the US (NY Times) is $39,000. So Newt wants us to believe that the average starting salary for school janitors is at least $78,000! I bet that most of the audience, which expect to vote for one of the GOP's elite candidates, believes this lie.

Where will all the unemployed janitors work after Newt fires them? There are about 120,000 public schools in the US. I can only guess the number of school janitors. I'll guess 500,000 (feel free to disagree). Newt has made two different proposals regarding school janitors. First, he said we only need one master janitor per school. Last night he said we only need half as many as we currently have. In the first case we would fire 380,000 janitors. In the second case we would fire 250,000 janitors. That will raise unemployment by about 0.2%. Nice job plan!

We'll have to hire 4 times as many children, especially in elementary and middle schools, as janitors we fire. The adult janitors will only have time to supervise the children. So, we'll have to hire perhaps 1.5 million students as janitors. How many after-hours school bus routes will we need to transport these students?

Newt's janitor proposal like many of his ideas are no more thought out than the other candidates' ideas, like 9-9-9. After all, its just red meat for the GOP base. These ideas don't have to be real they only need to stimulate an emotional response.

The Iowa debate audience applauded Newt's proposal. Do these people ever consider what they see and hear with an open mind or is all input pre-filtered according to stereotype?

Tuesday, December 06, 2011

Newt Gingrich: "Use poor children as school janitors"

When I was 14 my father abandoned me and my mother, sister and brother. We got free lunches at school. To hide that from the other students I would not go to the cashier until there was no line but I still often got caught and the look on the faces of the other students was painful to me.

The memory of those times came back when Newt Gingrich proposed to eliminate or relax child labor laws, as was done in Maine this year, so that schools can hire poor children, ages 9 and up, as janitors to "mop floors and clean restrooms" in their schools.

It wasn't hard for me to imagine how I would have felt when other students saw me cleaning bathrooms in school. The work would not have bothered me but I would have been ashamed.

I’m more disappointed with the audiences that have applauded each time Newt has made this proposal.

Gingrich also said that poor children don't know what its like to work for money unless its illegal. More than 15 million American children are living in poverty. Does Newt really believe that none of them know what it is like to work?

Gingrich is leading in the polls. He may be leading not in spite of his proposal but because of his proposal.

Saturday, December 03, 2011

Means-Tested Congressional Salaries

The Republicans recently failed to pass a bill that would have reduced federal employees and salaries. I don't support such cuts in our poor economy because it will slow the recovery. But, I have another proposal.

I suggest that the salaries of elected personnel be adjusted according to their financial means. I think citizens should participate out of a sense of duty to their city, state and country. Citizens who chose to serve should be fairly compensated for their service but only to the extent that they need it. Medicare is available to every elder citizen at no cost except for citizens that have the means to pay for a portion of their Medicare coverage. Let's apply the same rule to our representatives.

If the majority of our 535 voting and 6 non-voting members of Congress want to reduce the cost of our federal government then they should start with their own salaries.  Members with significant assets and/or other incomes will have their congressional salaries reduced by an amount proportional to their assets and other incomes.  Members with assets greater than $3 million or other income greater than 150% of the congressional base pay will only receive refunds for reasonable travel, office and staff expenses.

Since 261 members of Congress are millionaires, I estimate that we could save at least $50 million per year by using a means test to determine the salaries of our federal representatives from the president down. If we applied the means test to all local, state and federal elected and appointed office holders, taxpayers could save hundreds of millions, greatly reduce the number of career politicians and eliminate the financial incentive which begets much of the financial corruption in our government.