The Republican Senate have suddenly become deficit hawks. This is a surprise to those of us who watched the Bush Administration turn the Clinton budget surplus into the biggest deficit in our nation's history leaving President Obama, with not only a huge deficit, but also with an economy on the brink of collapse.
What isn't surprising is their idea of a solution. They have put "everything" on the table, including Social Security and Medicare. They insist on spending seven hundred billion over ten years by keeping the Bush tax cut for millionaires, yet they have no pang of conscience cutting cost of living increases for the elderly, raising the retirement age or greatly reducing Medicare benefits.
There is a solution to the entitlement problem without resorting to breaking the promise the government made to their senior citizens.
I spoke to Dr. Donna Tillman, Professor Emeritus, International Business and Marketing of California State University, Pomona. She told me, "The way to make Social Security solvent for the future is to raise the upper limit upon which people have to pay into the system. Currently the limit is about $106,800. Therefore, if you make more than that, no social security tax is taken out. Both left and right think tanks agree that this one solution would make the system solvent into the far distant future. If you make five billion dollars a year you still only pay (Social Security Taxes) on the first $106,800. That is the problem.
The way to make Medicare solvent is to allow everyone participate voluntarily. (Thereby enlarging the pool of beneficiaries with healthy payees and reducing the cost per person).
Raising the retirement age is exactly the wrong thing to do. Lowering the retirement age makes far more sense in a country with nearly ten percent unemployment. This one act would open hundreds of thousands of jobs to the jobless."
Naturally, none of this information was released prior to the November 4th election. Social Security is a promissory note issued by the United States government to every American worker when they first become employed. It tells them that by paying the FICA tax, they are paying into a retirement fund that is guaranteed to be there when they need it at sixty-five. Yes, there are some very healthy senior citizens who can and want to work beyond retirement age. If they continue to work, they continue to pay into the system. If, however, they are not able to work, or choose not to work, the promise that the government made to them when they signed up for social security should be honored. If it is not, the government is perpetrating fraud.
You can find out more about my views on my website at www.ackatt.com.