Believe it or not, I got asked to attend a coffee this morning hosted by Weiland at the SF Downtown Library by a Republican who hasn’t been pleased with Mr. Rounds.
She was impressed, as was I.
Trust me, I am always skeptical of ANY politician, don’t care what party they are from, but I do like a couple of messages Rick has put out there;
1) Medicare Choice for all (Single-Payer option through our payroll taxes)
2) Increasing the FICA on the wealthy
3) Getting ‘Big Money’ out of politics
I learned a lot today from Rick’s visit, including his sense of ‘civility’. When asked about EB-5, he said he would prefer to let it play out before he comments on the situation (the Federal investigation is still impending).
I have never understood why FICA ends after $125,000 (or whatever it is). Doesn’t that go against the entire half-truth that the rich pay more in taxes? And wouldn’t the entire mess be fixed by simply raising it?
Scott, you would think that would be the answer, wouldn’t you? I have always thought that too. But then the question becomes do you proportionately increase the potential monthly benefits for the wealthy as well, probably not, because at least with Social Security you would negate any potential gain, but on the Medicare side you probably could get ahead for the sake of the Medicare trust fund, however.
However, the one big problem with increasing the FICA taxes on the wealthy without increasing their benefit potential on the Social Security side is that you effectively turn Social Security into a “welfare program.” Now, many may say so what, but the late Senator Patrick Moynihan, often seen as the gatekeeper of Social Security interests in his day, was known to say that the day you turn Social Security into a “welfare program” is the day you begin to erode the majority support and common interest in Social Security and, thus, you promulgate its eventual political demise.
I believe if you are going to raise taxes on the wealthy to prop-up Social Security, it should be done through surtaxes and lump sump contributions back into the Social Security trust fund from the general Federal revenue so as to stay away from the divide which Moynihan feared from a “welfare” stigma because of a direct increase in FICA contributions by the wealthy without benefit increases. Some may say I am splitting hairs here, but politically I believe Moynihan was right and this would be the better way to handle the Social Security trust fund solvency issue.
But let us not forget, the real reason the Social Security trust fund is in trouble in the early part of the next decade (with Medicare being in trouble in the latter part of this decade) is because Reagan and some enabling Democrats thought it would be a good idea to borrow from the Social Security trust fund to lessen the short term borrowing costs and needs for Reagan’s supply-side/Cold War deficits. Had they not started that back in the 1980s, the Social Security trust fund would actually be solvent until about 2041 without any tweaking.
It is true that Reagan and the Democrats are often credited with having saved Social Security in their day through the raising of the retirement age to 67 for those born after 1956 and in raising the FICA tax, but although those facts are true, it is mere smoke and mirrors for the real problem they created by beginning to borrow from the Social Security trust fund for their own parochial budget needs in time and place and since then.
However, the one page which should be taken from the Reagan finagling of the Social Security system is that in the long term I think the retirement age should be raised. Especially, if you consider the fact that they claim most new borns born today will live to at least 125 years of age and apparently “sixty is the new forty.” Now, that is a longer term solvency answer, however, but in the short run I think our only choice is to refund the Social Security trust fund. This is easier said then done, but it would have been a lot easier to have done over the past ten plus years if we as a nation would have applied Gore’s “lockbox” strategy as well as used Federal surpluses to refund the FICA trust funds, rather then spending them on “Dubya’s” tax cuts in the past decade, but I guess that’s water under the bridge.
As far as the other issue, Medicare Choice for all, the one time I heard Weiland talk about this he said it should be a choice and not mandatory, thus the name Medicare Choice, but the problem with that strategy is that the day you open Medicare to all, but do not make it mandatory is the day you begin to create a political divide analogous to the fear that Moynihan had with Social Security and the raising of FICA rates without raising the benefit potential for all. Because if you make Medicare a choice, then over time you encourage politically the same long term choice for someone who will be beyond age 64 some day, which opens a can of worms that could itself further place the Medicare trust fund into peril once again in the future and turn it into a politically stigmatized “welfare program.”
I am somewhat shocked, that Weiland as a former director of the SD AARP would take this position on Medicare. I understand it politically, but from a AARP standpoint, I would think that that organization to the degree they even support the potential expansion of Medicare to all (assuming possibly that they may have genuine parochial interests to keep it as a program for those 65 and older) would want to make such a expansion mandatory for all in order to maintain its long term political viability and solvency.
That said, this is what I really think of the whole FICA trust fund mess:
http://www.youtube.com/watch?v=7GSXbgfKFWg
While the rest of us humps have to pay the FULL Fica on our payroll taxes, the rich are exempt. Boloney.
But the rich make a vast percentage of their income from “non-earned income” which FICA cannot currently touch regardless of your income status. This is all the more reason for why the FICA trust funds should be replenished with surtaxes on the rich through increases in capital gain tax rates and higher tax brackets for the upper income across the board. Plus, this strategy helps to stay clear of the “welfare” stigma for Social Security, which increased FICA rates without increased social security benefits for the rich would promote.
Interesting, Winston. Thanks.
The 3 points mentioned are a good focus. Hard to believe, a Republican with the population at large in mind.
Gene Abdallah was on John Michel’s radio program this morning. He talked about how Mike Rounds took $2m from public safety in order to buy his $2m airplane. Then he turned right around and had an additional dollar added to all auto license tags to make up for the loss of the $2m that was spent on the state airplane!!
I don’t particularly care for this guy (Abdallah), but he was an “insider” at that time so his info is probably accurate.
I was glad he refreshed my memory about all of Round’s “airplane shenanigans”!!
Gene Abdallah was on John Michel’s radio program this morning. He talked about how Mike Rounds took $2m from public safety in order to buy his $2m airplane. Then he turned right around and had an additional dollar added to all auto license tags to make up for the loss of the $2m that was spent on the state airplane!!
I don’t particularly care for this guy (Abdallah), but he was an “insider†at that time so his info is probably accurate.
I was glad he refreshed my memory about all of Round’s “airplane shenanigansâ€!!
Winston – SS is meant to provide a “minimum” or “base level” of security in income in old age – or for the disabled. It is insurance against abject poverty – NOYT a pension plan. Never has been. Thus – the benefits are capped at a point where that is what they provide. the notion that a wealthy individual should need anything beyond a basic guarantee of a minimal income in old age – is a twist on the intent of the SS fund – an attempt by rhetoric to turn it into a proportional pay for priviledge pension/investment scheme. That is NOT its intent.
The reason there should be no cap is that there is no prohibition against a disabled, widowed or orphaned person – who may have never contributed – and never will – from benefitting. Removing the cap assures those folks will be covered too. As all insurance schenmes – it is based on those NOT NEEDING the benefits (see – the wealthy) paying for those that DO NEED them.
Rufusx, there are no guarantees in life (except death and FICA taxes), but SS does offer a safety net to all even a wealthy person who could potentially lose all of their wealth during their life time.
As far as your cap analysis, without even debating you on this matter the bottom line is this, if you broaden the FICA taxes on the earned income of the wealthy without proportionately increasing their eventual benefit then you have turned SS into a welfare program… and then divide and conquer commences at the cost of the SS program, which means the rich win again…. Your premise and cap analysis does not protect us from the eventual reality of turning SS into a welfare program, if we raise the FICA for the rich without raising their eventual SS benefits.
The thing with the wealthy do any of them ever refuse to collect Social Security and Medicare when they reach that age? My thought is they don’t even though they don’t need it.
Or how about all of those who have been opposed to Obamacare over the past five years, especially those opposed to it for libertarian reasons. Have any of them disavowed their eventual use of Medicare some day or have any of them told their parents and/or grandparents to get off of Medicare right now?…. probably not….
So we need a revolution. Tea in the harbor. Not sure I’m on board. Rich that I’ve known seem so miserable. They cheated everyone and spend their time protecting their wealth. The best kind of rich are those who live amongst the poor. Those that drop an $1800 gold coin in the salvation army kettle. I met HL Hunt. I was doing a land survey in Dallas. He showed up with water & apples. Sat with us under a shade tree for lunch. Didn’t find out who he was till much later. Warren Buffet resents that he pays less taxes than his secretary. He lives modestly but it costs him a fortune for security. Could it be we’re happy and probably don’t realize it.
Oh, some of the rich think we are picking on them:
http://www.dailymail.co.uk/news/article-2545918/Criticism-super-rich-like-Holocaust-says-Silicon-Valley-billionaire-WSJ-letter-sparked-outrage.html
I envision Mike Huether living his life in a germ free cage on the top floor of a Lloyd hotel. He’ll have 6″ nails and stringy long hair. Already, it’s impossible for him to safely appear in public. For now it’s just a cream pie in the face but later it’ll be more dangerous. We’re so lucky we think with respect for others. We aren’t recognized but our lives are happy because we’re not the mayor with all the power and all the blame.
Rick Weiland supports public schools. Pretty sure he supports INDOOR PUBLIC pools too.
Okay Winston – that’s your spin and you’re stickin’ with it. Got it. Won’t matter what counter POV anyone might provide – you’ve swallowed the “it’ll become welfare” talking point hook line and sinker and it ain’t comin’ out o’ your head – no way – no how.
Rufusx, ones SS benefits are proportionate to what you put into it up to the cap. If you raise the FICA on the rich without raising the cap then you further walk into the world of the welfare stigma for the entire SS program.
The wealthy through their supply-side economic tax cuts have robbed the SS trust fund and they need to repay it, but if you do it with a rise in the FICA tax for the rich instead of other surtaxes or hikes in the tax brackets for the richest Americans you are falling into a political trap which strengthens those who have distain for SS like many of the rich who want to put the SS trust fund into the stock market or strict libertarians who are just opposed to it.
Plus, your analysis of what SS was suppose to be assumes that that political logic will have a political shelf life which endures a “welfare” attack in the future against the SS program if we raise the FICA without raising the cap. I would suggest it would be lost in the dust to those who would use a divide and conquer attitude to dub SS a “welfare program.”
Also, the talk that SS is not a pension or that it is merely an abatement to abject poverty is a slap in the face to the millions of Americans who greatly depend upon their SS check and their ability to live a retirement of dignity thanks to SS. Intentionally or not, those historically claims that SS was not meant to be a pension, but merely a supplement are actually speaking code to those who want to destroy the program.
Here’s the “code talk” that counters yours. Of course it has fallen out of use: “means testing”.
“1) Medicare Choice for all (Single-Payer option through our payroll taxes)”
A somewhat interesting idea that wouldn’t normally appeal to me…but when the principal alternative is the President’s plan to, as I see it, make it unlawful not to purchase private health insurance from a cartel made up of many of his wealthiest campaign donors, I have to say, it doesn’t seem too bad a notion.
“2) Increasing the FICA on the wealthy”
An excellent idea; I support it wholeheartedly.
“3) Getting ‘Big Money’ out of politics”
Neat slogan, but its like saying you want to “clean up the mess in Washington.” Its quasi-meaningless, feel-good drivel. The fact is, money will ALWAYS find a way. The only “solution” to this aspect of the human condition is to simply make campaign donations public (and readily searchable in a well-known database), so we can at least know whom’s taking who’s money. The rich will have their say, as they have since time immemorial. Those who believe an alternative is possible should ask it of Santa Claus, in whom they doubtless also believe.