Responsibility #59

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=110 BGCOLOR="#666699" TEXT="#080000" bgproperties="fixed" background="04900840erlcjm.png"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Arial" ><B>NATIONAL SECURITY--Structural,Moral,Economic,Domestic,International</B></FONT><B>     |     </B><A HREF="index.htm" TARGET="_top" TITLE="NATIONAL SECURITYStructural,Moral,Econom"><U><B>home</B></U></A></div> <div> <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A>   |   <A HREF="id34.htm" TARGET="_top" TITLE="Responsibility 1"><U>Responsibility #1</U></A>   |   <A HREF="id35.htm" TARGET="_top" TITLE="Responsibility 2"><U>Responsibility #2</U></A>   |   <A HREF="id36.htm" TARGET="_top" TITLE="Responsibility 3"><U>Responsibility #3</U></A>   |   <A HREF="id37.htm" TARGET="_top" TITLE="Responsibility 4"><U>Responsibility #4</U></A>   |   <A HREF="id38.htm" 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#57</U></A>   |   <A HREF="id91.htm" TARGET="_top" TITLE="Responsibility 58"><U>Responsibility #58</U></A>   |   <B>Responsibility #59</B>   |   <A HREF="id93.htm" TARGET="_top" TITLE="Responsibility 60"><U>Responsibility #60</U></A>   |   <A HREF="id94.htm" TARGET="_top" TITLE="Responsibility 61"><U>Responsibility #61</U></A>   |   <A HREF="id95.htm" TARGET="_top" TITLE="Responsibility 62"><U>Responsibility #62</U></A>   |   <A HREF="id96.htm" TARGET="_top" TITLE="Responsibility 63"><U>Responsibility #63</U></A>   |   <A HREF="id97.htm" TARGET="_top" TITLE="Responsibility 64"><U>Responsibility #64</U></A>   |   <A HREF="id98.htm" TARGET="_top" TITLE="Responsibility 65"><U>Responsibility #65</U></A>   |   <A HREF="id99.htm" TARGET="_top" TITLE="Responsibility 66"><U>Responsibility #66</U></A>   |   <A HREF="id100.htm" TARGET="_top" TITLE="Responsibility 67"><U>Responsibility #67</U></A>   |   <A HREF="id101.htm" TARGET="_top" TITLE="Responsibility 68"><U>Responsibility #68</U></A>   | 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TITLE="Responsibility 79"><U>Responsibility #79</U></A>   |   <A HREF="id113.htm" TARGET="_top" TITLE="Responsibility 80"><U>Responsibility #80</U></A>   |   <A HREF="id114.htm" TARGET="_top" TITLE="Responsibility 81"><U>Responsibility #81</U></A>   |   <A HREF="id115.htm" TARGET="_top" TITLE="Responsibility 82"><U>Responsibility #82</U></A>   |   <A HREF="id116.htm" TARGET="_top" TITLE="Responsibility 83"><U>Responsibility #83</U></A>   |   <A HREF="id117.htm" TARGET="_top" TITLE="Responsibility 84"><U>Responsibility #84</U></A>   |   <A HREF="id118.htm" TARGET="_top" TITLE="Responsibility 85"><U>Responsibility #85</U></A>   |   <A HREF="id119.htm" TARGET="_top" TITLE="Responsibility 86"><U>Responsibility #86</U></A>   |   <A HREF="id120.htm" TARGET="_top" TITLE="Responsibility 87"><U>Responsibility #87</U></A>   |   <A HREF="id121.htm" TARGET="_top" TITLE="Responsibility 88"><U>Responsibility #88</U></A>   |   <A HREF="id122.htm" TARGET="_top" TITLE="Health Care Letters to President, et al,"><U>Health Care Letters to President, et al, 8/24/94</U></A>   |   <A HREF="id123.htm" TARGET="_top" TITLE="Arguments for Delay in Enactment of a He"><U>Arguments for Delay in Enactment of a Health Care Bill</U></A>   |   <A HREF="id124.htm" TARGET="_top" TITLE="Post WORLD WAR IIPost COLD WAR Deja Vu"><U>Post WORLD WAR II--Post COLD WAR Deja Vu</U></A>   |   <A HREF="id125.htm" TARGET="_top" TITLE="Responsibility 89"><U>Responsibility #89</U></A>   |   <A HREF="id126.htm" TARGET="_top" TITLE="Responsibility 90"><U>Responsibility #90</U></A>   |   <A HREF="id127.htm" TARGET="_top" TITLE="Responsibility 91"><U>Responsibility #91</U></A>   |   <A HREF="id128.htm" TARGET="_top" TITLE="Responsibility 92"><U>Responsibility #92</U></A>   |   <A HREF="id129.htm" TARGET="_top" TITLE="Responsibility 93"><U>Responsibility #93</U></A>   |   <A HREF="id130.htm" TARGET="_top" TITLE="Responsibility 94"><U>Responsibility #94</U></A>   |   <A HREF="id131.htm" TARGET="_top" TITLE="Responsibility 95"><U>Responsibility #95</U></A>   |   <A HREF="id132.htm" TARGET="_top" TITLE="Responsibility 96"><U>Responsibility #96</U></A>   |   <A HREF="id133.htm" TARGET="_top" TITLE="Responsibility 97"><U>Responsibility #97</U></A>   |   <A HREF="id134.htm" TARGET="_top" TITLE="Responsibility 98"><U>Responsibility #98</U></A>   |   <A HREF="id135.htm" TARGET="_top" TITLE="The Structure of Our Nation is Unsound"><U>The Structure of Our Nation is Unsound</U></A>   |   <A HREF="id136.htm" TARGET="_top" TITLE="Ltr. to Editor, 3/19/96, Property Taxes "><U>Ltr. to Editor, 3/19/96, Property Taxes and Education Funding</U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=190 BGCOLOR="#CCCCFF" TEXT="#080000" background="04311c00egdysm.png"> <bR> </td> <td valign="top" height=370 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> Responsibility #59</div> <div> (written prior to July 1992)</div> <bR> <div> To the People of the United States of America:</div> <bR> <div>      There are two final items to be discussed concerning Social Security.  With the implementation of the new <U>Individual Base </U><U>Retirement Fund</U> arrangement in place of the SSS, provision must be made for the transition, for those too close to retirement to build sufficient IBRFs.  It is proposed that Congress analyze and then select an age (say 50 or 55) beyond which wage earners would stay with the present SSS benefits, an employee FICA tax rate of 10%, and present taxable salary limit.  The changes in income taxability, freedom to earn income after retirement, and COLAS, as proposed for those already retired, would apply (see Responsibility #58).  Note that employers would not continue to contribute matching FICA taxes for this group.</div> <bR> <div>      The Social Security Administration would have to analyze and determine, to what extent the present surplus (stated to be $336 billion in early 1992) would suffice to cover the future benefits of the two groups that remain participants, considering the proposed changes.  Congress should determine where taxes should be imposed, if a bailout were to occur in the future.  If the projections should conservatively indicate that the surplus is excessive to future demands, Congress could set forth directions for enhancing the IBRFs, of wage earners who worked for a number of years under the old SSS rules.</div> <div>      Now let us get on with government retirement plans for their employees and military personnel.  Consistent with Social Security, there would be no further automatic cost of living adjustments (COLAS).  Consistent with non-government retirement plans, the tax deferred status, where applicable, would be removed (see Responsibility #56).</div> <div>      We discussed the needs for reform, of benefits for the Congress and the Executive branch, in Responsibility #6 and #11. It is proposed that a retirement plan with similarities to that of the Armed Services be instituted effective in the first Congress, and the first Presidential administration, after enactment.  </div> <div>      Retirement benefits would accrue at the rate of two and one-half percent per year of service, to a maximum of 75%.  The base for multiplication would be the average of annual salaries while in (non-civil-service and non-military) federal government service.  This takes into account mixed, non-career-intended, paths (e.g., a person may serve as a Representative, as a Senator, in a cabinet post, as Vice President, and as President). Unlike the Armed Services, these elected and appointed officials would be fully vested after one year of service.  Eligibility to begin receiving retirement benefits would be the earlier of 30 years of service, or 60 years of age.</div> <bR> <div>      Let us turn now to a discussion of employee benefits offered by businesses.  The case was made at the end of Responsibility #51, that the government interferes unjustly in the work place. It does this when it goes beyond certain necessary health and safety considerations of the work place, and dictates, or offers tax incentives to impel, the provision by businesses of various employee benefits.  </div> <bR> <div>      The Congress is faced frequently with pressure from various groups to dump on businesses, to bear more of the tax load, or to provide new employee benefits.  In both cases someone pays.  If it can, in a competitive market place, the company will raise its prices to absorb the costs of the added taxes or the new benefits.  If the new benefits are subsidized through tax exemption or deferment for the employees, then other taxpayers pick up the subsidy tab.  The purchasing public pays for the price increase; other taxpayers pay higher taxes.  The former is undesirable and may lead to inflation, but it is a fair game in a free market.  The later is improper (and indeed unconstitutional in the purest sense).</div> <bR> <div>      If the market place resists the price increase, the business may lose market share, if it persists in the price increase. Some mix of employee layoffs, reduced profits, and reduced tax payments would result.  Alternatively, the company could choose to maintain its prices, and absorb the higher costs internally. Then wages and salaries would be reduced, or their growth would be held down, until the added costs were absorbed, modernization or growth of the company would be restricted, or owner's profits would suffer.  All appear to be no win situations.   </div> <div>      Speaking of no win situations, the 1980s and 1990s have proven to be just that.  The Reagan-Bush administration began their 12 year reign, with lower taxes coupled with complacent acceptance of uncontrolled spending, a fetish for deregulation, the Laugher (pardon, Laffer) curve, and the "trickle down" theory.  The President and the Congress set the example for IRRESPONSIBILITY, for greed and self-gratification.  Forget using your talents and working hard for the general welfare!  Make it now!  Play the ever more numerous lotteries in lieu of paying more taxes!  Gamble on Wall Street!  Speculate in real estate!  Who proved to be the biggest dice rollers?  Banks, S&Ls, and leveraged buy-out artists and their intended or actual corporate victims.</div> <bR> <div>      The "trickle down" proved to be a cloud burst of stinging horizontal rain, hail, and sleet.  The general public, taxpayers, workers, and investors have been unable to find relief or shelter from the fallout: persistent huge annual deficits, horrendous and burgeoning national debt, anemic and unpromising economic growths, devastating banks and S&Ls bailouts, scary federal government guarantees and obligations, failed businesses, layoffs, flight of higher paying jobs out of the country, lower paying and zero benefits new jobs, and compromised or canceled employee benefit plans in many companies.</div> <div>      Indicative of the last is a statement in a newspaper article of March 15, 1992: "Companies nationwide are switching their retirement plans to defined contributions from defined benefits." In another article it is pointed out that firms are using another stratagem for limiting their liabilities under previously adopted retirement plans.  They are replacing permanent employees with contract personnel, temporary hires, and part-time workers who are exempted from their plans.</div> <div>      It is quite evident that Uncle Sam must step away, from dictating or impelling businesses to undertake employee benefit plans, that may prove hazardous to the company's health or survival.  It is also high time that changes be made in how companies are directed, so as to provide internal checks and balances, that will assure major decisions reflect the health and welfare of employees and lenders, as well as top level managers and shareholders.  These will be subject matters in the next essay.</div> <div>                     Publius IV</div> <bR> <div> <A HREF="id93.htm" TARGET="_top" TITLE="Responsibility 60"><U>Responsibility #60</U></A></div> <div> Back to: <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A></div> </td> </tr></table></body>