[Update: November 12, 2012–President Barack Obama has won a second term over challenger Mitt Romney.]
In Willard Mitt Romney’s speech to the NAACP, essentially presented a summary of his Presidential objectives, called his “free enterprise” approach. The plan sounds like a neutral listing of long-held GOP positions. It seemingly worked in part as some in the NAACP audience actually applauded for some of it.
|Willard Mitt Romney “Free Enterprise”* Proposal
|1. Approve Keystone Pipeline
|| One million jobs?
|2. Open new markets for American goods => “clamp down on China”
|3. Reform Social Security and Medicare (in part by means testing the benefits)
||This idea is an attempt to avoid the easiet solution–raise the cap on the FICA tax. See this post. Would not be surprised if the full program took ideas from the “Third Way” think tank.
|4. Nurturing skilled workers
|| Is this a call for more H1-B visas?
|“5. Restore “”economic freedom””*(a) High taxation(b) unnecessary regulation(c) High health-care costs(d) Destructive labor policies”
||I think these charges terms means—more tax cuts, eliminating agencies or regulatory authority, high-deductible health plans, and elimination of the remainder of labor unions (that is, union busting).
* Term not defined by Mr. Romney.
Because of the way that the Civil Service Retirement and Disability Fund (CSRDF) is set up, when federal employees contribute more (without an increase of the pension benefit), they actually are paying that money to the Treasury. In the case of the recent new law (P. L. 112-96, title V), this money is going to pay for an extension of unemployment benefits (and not an increase in pension benefits). So, basically, federal employee pay was effectively cut back.
The group, Third Way, still has influence. It asked for a 5.2% increase of employee’s contributions; the Congress delivered 3.1% not only for the civil service but all participants of the Federal Employees’ Retirement System.
[The crocodile tears of Minority Whip Steny Hoyer and Representative Chris Van Hollen (member of the so -called supercommittee) did not affect me at all, except to make me marvel at their skills of “gaslighting.”]
As I suspected, in part, President Barack Obama delivered his deficit reduction plan to the Joint Committee on Deficit Reduction.
I have yet to read all of the contents, but one thing I did notice is that the proposal for federal employees to “contribute” more to their pensions is really a giveback of salary (because of the operation of the Civil Service Retirement and Disability Fund). I guess “Third Way” got its way in part (1.2% rather than 5.8%). But knowing how this town works another time that the media whips up the public about federal employees, watch for the so-called contribution to increase. [With all of the givebacks and pay freezes, federal salaries may never keep up with the cost of living in this expensive country.]
Will the plan get a majority vote and get a expedited vote in Congress? I do not know. Maybe some of the very bitter provisions can be tolerated if (very big “if”) every income class participates in addressing the lack of revenue problem.
Having completed posting on the Third Way benefit-change proposals, I will now begin to evaluate the revenue-increase proposals.
First on the list is the idea to impose benefit taxes on higher-income seniors. Third Way proposes to reduce benefits on this group and then turns around and taxes the all benefits above $50,000. I don’t see anything wrong with the current system.
Social Security is not a welfare program should not be adjusted to become one. The same response is true for the “idea” of means testing benefits—no. This move would be a sure way to diminish confidence in the program and turn it into a welfare program, which it is not. If a person pays into the Social Security program, they should receive proceeds from the program. If outside income exceeds $34,000 (or $44,000 for couples), that amount would be taxable under the current system.
As I wrote in the previous post, Third Way advocates working up to 70. I stated previously that people should enjoy life activities before the hardships of aging set in.
In the Washington Post today, yet another reason why additional years of work should not be so forcefully advocated.
Many industries find themselves in a quandary. They often need older workers for their expertise, yet they also may need to accommodate their physical disabilities and their desire for more flexible schedules. And as workers stay on the job longer, they may need training in new technologies or work procedures.
In addition, the whole idea is to transfer the knowledge of the present working generation to the generations behind them. This article indicates that that effort is not happening, and only bad results can occur because of it.
Continuing with the evaluation of the Third Way proposal for Social Security (with the awareness that the Joint Commission on Deficit Reduction is set to begin work soon), this post evaluates the Work Rewards for Seniors plan. Third Way proposes that senior citizens who work beyond a certain age should stop paying Federal Insurance Contributions Act (FICA) taxes. Third Way acknowledges a reduction of FICA revenue but assert that the proposal would produce savings sufficient to make up for the revenue loss.
- I think that there should not be a cutoff for FICA. As long as you earn income, you pay into the Social Security system. That expectation began at the person’s first wage-earning job and continues that way until a person stops working for wages.
- In addition, Third Way’s proposal causes problems when Social Security beneficiaries are not contributing to the Social Security system (from which the beneficiary is receiving funds).
Continuing on with the evaluation of the Third Way document “Saving Social Security”, I think that Third Way’s proposal about increasing the retirement age fails to recognize that mortality is reality; no amount of work will avoid this fact. The retirement age was already increased to 67; that age should be the maximum age.
After a lifetime of work, who would want to continue working full time until 70 (or older)? Some judges and members of congress do, but they have lots of staff assistance to complete their jobs.
I think it is reasonable for people to take advantage of their remaining good health to enjoy activities they could not get to do at a younger age.