Guest commentary: Lettter to 112th Congress:

Time is running out, part II

To the 112th Congress: proposed remedies to reduce the national debt

Social Security

Women currently make up 51 percent of our work force. When social security was instated, this was not the case. As a former teacher I realize the importance of a stay-at-home parent. However, keep in mind that a worker currently only needs to accumulate 40 quarters to qualify for social security, which gives a stay-at-home spouse time to return to work when the children enter the work force.

Due to our budget crises, all future taxpayer pensions need to be privately funded. And, it’s a matter of fairness. (Why should a spouse who has worked more than 40 years potentially receive only 50 percent more than a non-working spouse?)

Proposal:

1) Stay-at-home spouses will have three options to qualify for future Social Security benefits.

A) Non-contributory selection: Receive 75 percent of their working spouse’s benefit upon the death of said spouse instead of 50 percent.

B) Contributory selection for the non-working spouse: Receive 50 percent of the retired spouse’s benefit during the retired spouse’s lifetime if the working spouse contributes an addition 25 percent to FICA.) These changes will affect only those who are currently 40 years of age or younger, since they will have the time to accumulate the required quarters.

C) Non-contributory spouse returns to work to accumulate enough quarters to retire.

2) Contributory selection working spouse: Increase quarter accumulation to 60 quarters. (15 years)

3) The current retirement age will be changed. Those 50 and older will see no change. Those born after 1965 will see their retirement postponed one month for each year resulting in those born after 2015 reaching retirement age at 70. Minimum quarter accumulation for those born after 1970 will increase one quarter per year until increasing from 40 quarters to 60 for those born after 1990.

Medicare

Premise:

Younger working Americans are generally healthier than their aging counterparts and would be less of a burden on Medicare. If enrollment was expanded, additional funds would help stabilize the outflow of funds. Also, many middle age Americans would chose to retire if health care was adequate, affordable and contained no pre-existing conditions. Their early retirement would help reduce the high unemployment rate.

Proposal:

1) Medicare will allow open enrollment for any American over 55 for an additional premium of 10 percent above the anticipated break-even cost point, providing the contributor’s individual retirement income does not exceed $50,0000 per year for an individual. ($100,000 per couple.)

2) Premiums for individuals with incomes between $50,000 and $100,000 ($200,000 per couple) will see their premiums incrementally increase to a 20 percent premium while individuals making more than $100,000 and couples over $200,000 will not be eligible for Medicare until reaching their bracketed retirement age.

Government Pensions

Premise:

No future city, state, or federal tax-funded pension including those of our elected officials, should receive benefits that exceed the average of their tax paying peers and constituents. All future public pensions should be employee co-funded at 5 percent.

Proposal:

1) All future state and federal employees including military personnel entering the workforce will co-fund their plan by contributing 5 percent of their pay to the plan. To offset this initial entrance level pay will be increased 5 percent.

2) Federal employees including members of Congress and military personnel will remain eligible to retire after 20 years, but will not be eligible to collect benefits until age 59.5. (The same age most Americans become eligible to withdraw their own IRA savings without present restrictions).

3) There will be no duplicity of any non-contributory government pension payments to those employees who currently receive non-contributory government pension monies and earn over $100,000 per year in retirement income. This will apply to all elected and appointed officials including all members of the Administration and Congress.

Immigration

Premise:

To deal with our shadow work force and the 20 to 30 million illegal immigrants, we must find a way to integrate them into our society as vested Americans who contribute to income tax, social security, and health care thus increasing our tax base and the number of working Americans that support social security and Medicare, for it is this area of the population that is the fastest growing segment of our population.

Proposal:

1) All illegal immigrants without a criminal record, must, within three months, partition, and will be granted, a Pending Naturalization Certificate. Failure to do so will result in their removal from our academic systems, cancellation of licenses, social security cards, participation in any state and federal assistance programs, and immediate deportation.

2) Any immigrant (non-felon) who participates in this program will be allowed to remain in these programs and will be eligible for accelerated citizenship, a one time exception to naturalize those living in America and desire to make our country their home.

3) Employers will be granted three months to check and verify documentation of workers, but will be permitted to hire and keep illegal immigrants who show they have partitioned and been accepted for accelerated naturalization.

4) Employers will receive a one time tax credit based on their number of employees to offset administrative costs incurred during this period of verification.

5) Any employer who can not show valid documentation after three months will be fined $25,000 for each invalid worker for their first fine, and $50,000 per worker thereafter.

6) Any immigrant failing to gain citizenship through this accelerated program will be deported and will not be issued another Pending Naturalization Certificate.

7) Individuals who immigrate from this date forward will not be eligible for a Pending Certificate or the temporary accelerated program.

8) Students who travel from abroad to study will either pay a 50 percent room and board/tuition premium or remain to work in America in an area that has a shortage of qualified talent for a term equivalent to that spent in the classroom.

Pay-down of the National Debt

Premise:

If the national debt is not substantially reduced, when interest rates rise to their modern day historical average of 6.9 percent, we as a nation will not be able to service our debt, and will risk default which will make a good part, if not all of our accumulated retirement assets, worthless.

Proposal:

1) All Americans who have private pension assets to include IRA’s, 401ks, and 403Bs will have the option to have these funds deposited in their current form in the government’s general fund. (If the economy is on the verge of collapse, it may become necessary to make this compulsory.)

2) Americans holding assets that have been donated (or seized) will receive an interest-only pension proportionate to the amount seized for a period of 30 years based on the historical average rounded interest rate of 7 percent. (Although all pensioners will lose their principal, each will receive a larger monthly payout for a far longer period of time than the income that would be generated by an average fixed-rate annuity which would still absorb the principal.

3) Roth distribution will remain tax free.

4) All other pension distributions will be taxed as capital gains at a rate of 15 percent.

5) This money will be used to pay off the nation’s debt.

6) Congress will pass an amendment requiring the president to submit a balanced budget.

7) The government will hold on to these assets and sell up to 3percent to the private sector each year for 33 years which will help stabilize long-term markets.

7) Expatriated corporate profits will be taxed the same as corporate income earned at home.

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