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Public employee benefits - beyond reasonable

Original post made by Joe, Another Pleasanton neighborhood, on Nov 27, 2012

"As America's recession spooled out, Chicago responded to the ensuing budget crunch the way many cities have: by cutting jobs. Between 2003 and 2012, the city eliminated more than 8,000 full-time positions, almost 20 percent of its work force. Yet as the work force shrank, personnel costs increased.

According to an August report by the Illinois Policy Institute, a free market think tank, health care costs jumped by 29 percent in fiscal year 2012. Between 2003 and 2011, the city's average annual cost per employee rose from $58,299 to $96,082. The upshot: Chicago is paying around $700 million more annually for 20 percent fewer employees.

The city has blamed the uncontrollable growth on wage and benefit increases required by collective bargaining agreements with labor unions, which represent 89 percent of city employees. The city's budget gap now stands at $369 million, and according to the report. Chicago must find a way to increase its pension contributions from $476 million to $1.2 billion a year by 2015.

From Reason magazine, December, 2012.

Comments (46)

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Posted by But...
a resident of Birdland
on Nov 27, 2012 at 11:49 pm

Those comments understate everything that is wrong the state of Illinois. They just recently enacted a massive tax hike on both business and the middle class to help fund a failing public employee union pension system that has been abused to no end. The states lergest employer is leaving to a more fertile business friendly state which will only exacorbate their problems. The implosion of illinois is on the horizon not only because of their out-of-control pension system, but because their goverment is corrupt. The only thing the CA government has over Illinois is the corruption of state government started much later, we have better weather and the Pacific Ocean, and we have Silicon Valley & Hollywood.

Other than that we share the same fiscal calamitity and disjointed political mess.


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Posted by 2012 world
a resident of Another Pleasanton neighborhood
on Nov 28, 2012 at 12:07 am

Yes, our union benefit costs in CA almost match the salaries.....and, no surprise, much of the medical costs are due to nurses 'unions', who regularly do walk-off days.
There is no escaping the assults from the unions.


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Posted by 2012 World = 2016 CA Mess
a resident of Birdland
on Nov 28, 2012 at 2:08 am

That is about the time a portion of the prop 30 revenue will begin to expire while at the same time we will see significant increases in both current/retiree medical costs which are, for the most part, NOT pre-funded; therefore deferred. On top of those additional costs, while the prop 30 funds wind down, we have state employee contracts that have been back-loaded (going back several years because the Governor and company thought we'd be out of the recession by now and nobody would care), and of course rapidly rising pension costs because CalPERS is guaranteeing a 7.5% investment return on the assets they do have (actually taxpayers are doing that) while also charging taxpayers 7.5% interest on the assets (unfunded Liability) they don't have (that would be 7.5% interest on the 40% unfunded liability which increases the debt burden at a very rapid rate (although city staff & council seem to ignore it)).

To make matters worse the teachers union is asking the state legislature to approve a doubling of the taxpayer burden by 2016. The problem with the teachers union & CalSTRS (their retirement plan administrator) is that this doubling of the taxpayer burden is only designed to bring the funding level to about 80% (the lowest threshold of what is considered acceptable) over a period of FIFTY YEARS! IN OTHER WORDS THEY WILL ATTEMPT TO DEFER EVEN MORE DEBT FOR AS LONG AS THEY POSSIBLY CAN GET AWAY WITH IT!

Some people might say, well, if they spread the payments over 50 years it probably won't affect me but for 30 years. That would be missing the point completely. The point is they will be spreading-out payments "for past service" because they have structured compensation & benefits they can't afford in the first place. This new scheme being devised by the CTA & CalSTRS will only ensure that the CA educational system will ALWAYS be playing catch-up; looking for new sources of revenue.

While taxpayers are guaranteeing these unachievable rates of returns that the teachers unions own consultants are saying aren't realistic their retirement system (CalSTRS) ROI is about ZERO percent over the past 17 months. That adds 10's of billions to taxpayer debt that will manifest itself in the form of a declining educational system in CA or increased taxes well beyond the expiration of prop 30.

What is assured is that those TENS OF BILLIONS OF DOLLARS won't find their way into the classroom. Expect the claims of the PUSD, CalSTRS, and the CTA to be to the contrary. While I would consider their objection to my statements a blatant lie they can claim technical correctness based on those Tens of Billions going toward pension payments for teachers that work in the classroom. That doesn't change the fact that the Tens of Billions of additional dollars do NOT provide more hours of instruction, more teacher training, more teachers, or anything other than the current programs and shortened school year due to furlough days.


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Posted by Birdbrain
a resident of Birdland
on Nov 28, 2012 at 7:50 am

Unions beware! I will fight you from land, water and in the air. I'll fight you while I take out the garbage. I'll fight you in my fantasies. I'll fight you with endless repetition of stereotype until your eyes explode in wonder at my inability to say anything without translating it into hatred of unions. I ride a hobby horse of antiunionism day and night. My existence is impoverished, but I have faith in my hatred. Sqwuak sqwuak.

p.s. A tsunami is coming.


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Posted by hoops
a resident of Mohr Park
on Nov 28, 2012 at 1:58 pm

As I have stated more than once.....The old I got mine screw everybody else attitude that plagues our society.The real entitlement problems are the unions and public employees who seem to think they are entitled to medical benefits and pensions that they barely contribute anything to to pay for.
I am tired of hearing about SS and MEDICARE as entitlements.I believe the govt has taken money out of every one of my paychecks for 40 years to fund what they will be paying me.My "pension" is my sep IRA which I 100% funded.
It is time to tell people that their little game is over and they have to come back to earth with the rest of us.Do not tell me you cannot cut their benefits that they did not pay for.
I am also tired of the almost reverant attitude toward firefighters.You work in Pleasanton or San Ramon and your job is about as dangerous as an accountant.It is so tough that they all have second jobs because they have so much free time.It is crazy.This is not NYC or SF.I respect firefighters but not so much that they retire at 50 with lifetime benefits that are ridiculous when they worked what was actually a cushy job in the burbs.
I get a kick out of the public employees who think they deserve their benefits because they say they are underpaid.That of course is totally false.I have a relative who worked 20 hours a week at Cal State and had full medical and the absolute best plan you can.
It is tooo bad that politics prevents doing what should be done to cut these existing and future plans.


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Posted by Rod
a resident of Country Fair
on Nov 28, 2012 at 3:44 pm

Hoops is right. I think we should pay all our public servants a fair day's wage, on a par with what I have paid my lawncare crew of undocumented workers over the years. Heck, my stoop laborers never expected any pensions. And if they got sick, they either went to ER or I gave them 10% toward a ticket back to Mexico.

And Professional Basketball players. Just because they're born tall and can play on the hardcourt doesn't give them the right to make more money than I do. And they get a lifelong pension? How unfair!

I mean, c'mon. How about these overpriced professors who slum around in grad school getting their fancy doctoral degrees, and then work at Cal State for a whopping $80 thousand a year? So they're smart? Big deal! So am I! I never paid my stoop laborers that much, so why should some professor expect such? Yes, I realize professors make upwards of $200 thousand a year at Stanford and Harvard and places like that. But why should Cal State professors think they're worth more than me or my 'stoopers'?

C'mon people. Let's do away with the me-me-me attitude and start thinking about the world from another viewpoint, like my own.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 28, 2012 at 4:17 pm

Kathleen Ruegsegger is a registered user.

"Hoops is right." That is the only thing you said that is correct.


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Posted by Rod
a resident of Country Fair
on Nov 28, 2012 at 4:32 pm

Well argued, as usual. You must spend more time writing in your registered user name than actually thinking about topics. Go plop somewhere else, please.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 28, 2012 at 4:42 pm

Kathleen Ruegsegger is a registered user.

Rod/Ted/Whatever, Your sarcasm gains you neither respect nor does it make any credible points. Equating public employees to lawn care workers--is that actually happening? Basketball players are paid by private entities willing to pay those salaries. If you play well, you draw crowds, you bring in revenue, you get your cut. And if you don't like their bigger than big salaries, don't patronize them with your dollars.

Professors (well, you can certainly try to be the Chancellor of UC Berkeley at $400,000+), teachers, police, fire--I would gladly pay them more. And let them pay/collect from social security or invest in their own 401k/403b plans. And retire under the same circumstances as the rest of taxpayers.


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Posted by hoops
a resident of Mohr Park
on Nov 28, 2012 at 4:52 pm

Rod,,,Nobody is saying that public employees should not be paid a fair and decent wage.The problem is when you add the pensions and benefits their wages are not fair and decent but often out of line.I would have no problem with the pensions either if they contributed the appropriate amount to fund them.If you are working for the city of whatever and making a good salary you should not be able to retire in your mid fifties and have society pay for your outlandish pension.It is a joke how the system has been abused and manipulated.I have no problem paying more taxes to help support people in the military who risked their lives for me and you.I do have a problem seeing my community bankrupt because white collar workers and firefighters are overcompensated.The police are a different story.They are in danger everyday just doing their basic jobs.


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Posted by Rod
a resident of Country Fair
on Nov 28, 2012 at 5:02 pm

Staceleen,
Equating public employees to lawn care workers? Yes, there is no recognized, agreed upon standard for what counts as a fair salary-cum-pension (i.e., salary) beyond what you right wingers pull out of your lily white behinds. "Let's do like in the private sector." "I never got such a pension in MY days in the private sector." "I funded my OWN IRA." "Let's follow the business model (but not the one that laid me off)."

As per usual, you've offered no argument but only a litany of beliefs/prejudices. A good public employee helps lift the standing of the community in many different respects. Most more than earn their salaries (and perhaps even more so than do most professional hoopsters). If you don't like the salaries cum pensions they get, go away. Go far away to the gossip-mongering, witchhunting land that most turns you on. I would think Alabama would fit you well. Lots of entitlement seekers, and lots of uneducated bumpkins who'd likely swallow your witch's brew along with the cornstill liquor they chug while picking their toes up in the hay loft.


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Posted by Rod
a resident of Country Fair
on Nov 28, 2012 at 5:06 pm

Hoops,

You really must come to grips with how ridiculous you sound. Please try to refrain from placing your arbitrary standards and measures on the rest of us.

I think it is unfair and outlandish and indecent that lawn care employers don't get prison terms for failing to carefully inspect the papers of the people who work for them.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 28, 2012 at 6:28 pm

Kathleen Ruegsegger is a registered user.

"A good public employee helps lift the standing of the community in many different respects. Most more than earn their salaries" Agreed--I've said the best teachers should be able to earn more than a principal, for example.

"If you don't like the salaries cum pensions they get, go away." This is the start of where your comments are unproductive. If all those who disagreed with pensions departed California (I would hardly pick Alabama), then you'd only have each other (public employees) to tax. Pretty sure that would be unsuccessful.


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Posted by Cholo
a resident of Livermore
on Nov 28, 2012 at 6:31 pm

I totally enjoy receiving benefits so that I can have a civilized life!

I don't have to wake up early! I don't have much breakfast and lunch is my favorite meal. I totally enjoy taking walks and visiting my ole buds. What can I say...HOORAY!!!

One of my favorite meals is leg of lamb even though I eat more fish and vegetables that meat of any kind.

I'll never completely understand why some folks think that it's not cool to receive retirement benefits? My main concern is that I'm retired and I love it. Keep working your butts off so that I can continue to enjoy the life to which I am accustomed! tee hee...
I think it's waaaaaaay cool to have time off and naps in the afternoon when I sleepy!!!


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Posted by Birdbrain
a resident of Birdland
on Nov 28, 2012 at 9:32 pm

I sleepy too, Cholo. I am a daytime chickadee, not a nighty owl. But I must comment on one of our birdie brained birds of a feather. To wit, or not. Kathleen.

Kathleen assumes that anyone who is not a public employee is against public employee pensions AND that all these anti-public types are as anti as Kathleen is. Talk about living in a bubble! This is the kind of thinking that had Romney winning in a landslide because, hecky-heck, there aren't enough school teachers and trial attorneys and black people in this country to put Obama past that magical 47% number that Romney now must forevermore own as his own. Obama put him to beddy-bye. But the folks who elected him also showed, by a margin of over 4 million votes, and approaching 4% (51 v. 47) as the votes continue to be counted, that the birdbrain righties like Kathleen and her little dwarfie-dwarf followers, are living in a bubble.

She presents no rational argument, but just a slough of erroneous assumptions, and then proceeds as if they are facts. Public employee pensions are too high (DON'T CHA KNOW EVERYONE KNOWS THAT!). Any one who isn't a public employee thinks public employee pensions are too high. Facts? Who needs them when you can simply pick out an arbitrary claim - unions are bad, public pensions are too high, people didn't vote for supplemental tax for schools because everyone is like her and disagreed with the language - and all the other nonsense she routinely gives us. Who needs anything resembling a rational argument when one assumes they are right and that all the other birdbrains agree with them? Despite her self-pontificating claims to the contrary, Kathleen is PW's exemplar case of FOX News 'reasoning'. Just assert negative stuff about teachers, cops, unionists, repeat and repeat again, and in no time at all the assertion becomes accepted by the speaker/writer as fact. You see a great example of such in her birdbrain comments above. Thankie so much, Kathleen. Never change! Cuckoo!


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Posted by john
a resident of Another Pleasanton neighborhood
on Nov 28, 2012 at 9:40 pm

hoops said,

"I am tired of hearing about SS and MEDICARE as entitlements.I believe the govt has taken money out of every one of my paychecks for 40 years to fund what they will be paying me.My "pension" is my sep IRA which I 100% funded."

They are entitlements, and the biggest contributors to the federal deficit. The money the government took out of your paychecks was taxes. It went to pay for all sorts of things, from roads and bridges to national defense. It was not set aside somewhere for you like an investment account. These programs were never set up to work that way.

Web Link


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 28, 2012 at 10:16 pm

Kathleen Ruegsegger is a registered user.

Yes, Birdbrain, because this kind of comment from Rod/Ted/you? is so helpful: "I think we should pay all our public servants a fair day's wage, on a par with what I have paid my lawncare crew of undocumented workers over the years. Heck, my stoop laborers never expected any pensions. And if they got sick, they either went to ER or I gave them 10% toward a ticket back to Mexico."

Just a hypothetical comment on my part about who might be left to pay for everything, but the backlash against pensions is growing. "A weak recovery from the longest recession since the 1930s, reducing job prospects and retirement benefits for most nongovernment workers, has churned up a backlash against the pay and benefits of public employees nationwide." Web Link As someone else pointed out, even local liberal newspapers (such as Daniel Borenstein) are leading the charge to inform the public. Web Link

I did not believe Romney would win. Those who voted for or against the various taxes had their own reasons, including me. I don't watch Fox; I prefer PBS' Newshour and radio. And I don't speak against teachers, the police, firefighters, etc. I do, and will continue to, express my opinion about union leaders though. And it's clear when it's opinion rather than fact.

Your postings are precious though, Birdbrain.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 28, 2012 at 10:27 pm

Kathleen Ruegsegger is a registered user.

John, deductions for social security and Medicare go to social security and Medicare, not roads, etc. (unless you mean the government's borrowing from social security).

"Payroll taxes must be withheld from an employee's paycheck. This is required by law. Employers must hand these withholdings over to various tax agencies. Payroll tax deductions include the following:
Federal income tax withholding (based on withholding tables in Publication 15)
Social Security tax withholding (6.2% up to the annual maximum)
Medicare tax withholding (1.45%)
Various local tax withholdings (such as city, county, or school district taxes, state disability or unemployment insurance)." Web Link


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Nov 28, 2012 at 11:14 pm

Stacey is a registered user.

Birdbrain/Rod,

How many years now have you been attacking Kathleen here in the hopes that she will "go away"? How fruitless your endeavor!


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Posted by Birdbrain
a resident of Bordeaux Estates
on Nov 29, 2012 at 8:38 am

Hypotheticals, hmmm? Posits opinionated assertions as fact; then calls them hypotheticals. Doesn't know argument; doesn't know science. Cites a bit of rhetorical flourish from a conservative newspaper's piece and uses as fact to support her assertions. Anyone surprised? A truly precious piece for collectors of tea party/libertarian mush.

Thanks for your prescient remarks Staceleen. We all treasure them all, whether you post as Stacey, Kathleen, or Staceleen.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 29, 2012 at 11:24 am

Kathleen Ruegsegger is a registered user.

Generally, if I state something as fact I post the source. A name says a lot: Kathleen is actually Kathleen; Stacey is Stacey; and Birdbrain . . . well you see the pattern.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Nov 29, 2012 at 11:24 am

Stacey is a registered user.

Yea, yea. We've heard it all before ad nauseum. You chased everyone away from giving you facts and rational arguments so that's why you get none.

You started posting here in what, 2008 or 2009? It's almost 2013 and you've stuck with the same vitriolic act to no effect. And so you'll go on like this for another how many years? I feel sorry for you.


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Posted by Rod
a resident of Country Fair
on Nov 29, 2012 at 1:06 pm

Kathleen/Stacey,

Why the assault on a fellow birdbrain (who seems merely to have pointed out your numerous logical contradictions and bloated opinions that disguise themselves as facts)? On my reading, he or she merely pointed out that you have no idea what an hypothesis is, which makes your truth claims, already suspect, pretty thin. And what do you do in response? In your embarrassment, you kick up a lot of dirt. Oh, and BTW, your attempts to pose as two separate people make me want to puke. Take yourself out on a date or something. Prop up a chair at your table for two, put a doll on the facing chair with either your Stacey or Kathleen name tag pinned to it, and knock yourself out. I pity you.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 29, 2012 at 1:17 pm

Kathleen Ruegsegger is a registered user.

Rod, cute. Two people, no matter your claims to the contrary. How exactly do "bloated opinions" "disguise themselves as facts"?


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Posted by Rod
a resident of Country Fair
on Nov 29, 2012 at 1:27 pm

Example of bloated opinion disguised as fact: "If all those who disagreed with pensions departed California (I would hardly pick Alabama), then you'd only have each other (public employees) to tax."

Kathleen/Stacey, You really need to do a little reading. Less from right-wing blogs and more from high school science and basic critical reasoning textbooks. You seem unable to differentiate between truth claims, opinions, and hypotheticals. I continue to pity you.



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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 29, 2012 at 2:48 pm

Kathleen Ruegsegger is a registered user.

Save the pity for someone who might benefit. What I said no more looks like fact than your insistence that I"m Stacey, nor did I state it as fact. I'll add IMO more often if it will help.


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Posted by Rod
a resident of Country Fair
on Nov 29, 2012 at 3:44 pm

I'll try to spare the pity, though only if you try to crank things up a notch (e.g., looking at some helpful high school texts that might help you learn how to construct a coherent argument). You and your alterego, Stacey, tend to hold to ideas and ways of expressing them that cannot help but open themselves to ridicule.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Nov 29, 2012 at 4:29 pm

Stacey is a registered user.

Spare the child; spoil the Rod.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Nov 29, 2012 at 4:44 pm

Stacey is a registered user.

Rod/Birdbrain, crank *this* up a notch. You're not worth my time to have an intelligent discussion with; not because I can't but because I won't. You get the kind of response from me that you ask for. I suspect that you're quite an intelligent person whom others could learn a lot from yet over all these years it is obvious that you have no desire for an intelligent discussion either. Your calls for coherent arguments are just a rhetorical tool, not a sincere search for intelligent discussion.

So excuse me if I'd much rather fart in your general direction.


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Posted by clifford
a resident of Charter Oaks
on Nov 29, 2012 at 4:50 pm


Sounds like someone has a lot of gas in them.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Nov 29, 2012 at 4:51 pm

Stacey is a registered user.

Sorry, indigestion.


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Posted by clifford
a resident of Charter Oaks
on Nov 29, 2012 at 5:07 pm

Hey, I'm new here. Not my style, but if that's the best you have to offer who am I to judge?


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Posted by Hoops
a resident of Mohr Park
on Nov 29, 2012 at 7:19 pm

John....I am sorry to tell you that SS and Medicare taken from your check goes to ."Surprise....SS and Medicare.You should stop listening to Rush or whover you get your info from.It is true that there have been times when,I believe, our beloved pols have raided the fund,but rarely.
Rod,I apologize for responding to you.It is obvious what your purpose is here.You should get a life.Your comments are truly beneath your intellect.


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Posted by Woman issues
a resident of Another Pleasanton neighborhood
on Nov 29, 2012 at 7:46 pm

Sounds like rod and his/her alter ego, the aptly named birdbrain, have some serious issues with women. Maybe they were spanked hard by mom for talking back when they were little(r) or more likely hate themselves for lusting after mom...either way, women threaten them, hence the vitriol and personal attacks. Mommie issues are cited in many cases of serial killers and wife beaters lashing out out women that remind them of mommie dearest. So sad, so pathetic. I hope you find the help you need, rod(less).


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Posted by john
a resident of Another Pleasanton neighborhood
on Nov 29, 2012 at 9:53 pm

Kathleen said,

"John, deductions for social security ..."

Kathleen, I wish it were so, but it is not and it never has been.

"unless you mean the government's borrowing from social security"

Of course I mean the "government's borrowing from social security".

It is all IOUs. As I'm sure you know, there is no lock-box, other than a file of IOUs. Taxes collected for Security Security have all been spent by the government on everything from courts, to scientific research, to even paying Social Security benefits. The really sad thing is that some people believe, or want to believe, that Social Security money is being kept, or saved, or invested like a 401k or IRA. It does not work that way, and it never has.

The really sad thing is that Social Security, Medicare, Medicaid, and defense are the biggest drivers of federal deficit spending by far, and people, mainly seniors, live in a state of denial of this fact. It is these programs that drive our deficits, not food stamps, or space exploration, or welfare, or public broadcasting. If spending cuts are to have any meaningful effect, then those programs will need to see the most significant cuts. Even if we cut everything else to zero and leave these programs untouched, we will still have a huge deficit that will only grow over time. There is really no sense in deny these facts if we are to have any hope of solving our fiscal mess. I'd be happy to provide links, but this information is readily available.


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Posted by john
a resident of Another Pleasanton neighborhood
on Nov 29, 2012 at 10:01 pm

To "Hoops",

I don't generally get my information from Rush Limbaugh, and am kind of a left leaning independent, so I'm not to inclined to listen to right wing infotainment. I hope you really don't think "our beloved pols have raided the fund,but rarely." There is no "rarely" to it. The Social Security "trust fund" is all IOUs. All of it has been spent. It is politicians who go out of their way to mislead the public on this.

Web Link


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 29, 2012 at 10:26 pm

Kathleen Ruegsegger is a registered user.

John, The deductions made from paychecks are on the books. I know the actual money isn't at SSA, just the accounting/IOUs. Plenty to find here: Web Link


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Posted by Rod
a resident of Country Fair
on Nov 29, 2012 at 10:59 pm

I'm happy to report that Staceleen is back to her face-saving ways and that her indigestion problem seems to have cleared up. Very classy girl, though.


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Posted by john
a resident of Another Pleasanton neighborhood
on Nov 30, 2012 at 6:57 am

Kathleen,

That is exactly my point. You said that deduction for Social Security and Medicare go to paying for Social Security and Medicare. They do not. You had that wrong. Those taxes are spent on whatever congress is inclined to spend them on, from foreign aid to education. It is a very important point. That the taxes are accounted separately from normal income taxes is just a marketing gimmick used by politicians.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 30, 2012 at 7:53 am

Kathleen Ruegsegger is a registered user.

John,

From New York Times (great graph): Web Link

"Social Security is a pay-as-you-go program financed by payroll taxes on workers and employers. When its revenues fall short of the benefits it owes in a given year, it covers payments by drawing on a $2.6 trillion fund that is accounted for separately from the federal budget and invested in government bonds. It is estimated that unless changes are made to the system, the fund will be able to pay full benefits until the surplus is exhausted in 2036, and about three quarters of benefits after that." Be sure to click on "related article" to read what goes with the graphic.

I already posted the Social Security Administration where you can read the history.


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Posted by john
a resident of Another Pleasanton neighborhood
on Nov 30, 2012 at 9:02 am

So, it sounds like you are agreeing with me completely (correct me if I'm wrong), that Social Security taxes are used for any number of things, not just paying for Social Security benefits of current recipients, and that there is no lock box or trust fund, only IOUs. We also seem to agree that Social Security continues to add to the deficit (see the USA Today article above), and from your article

"When its revenues fall short of the benefits it owes in a given year, it covers payments by drawing on a $2.6 trillion fund that is accounted for separately from the federal budget and invested in government bonds."

In other words, when funds fall short, we borrow money and increase the deficit. That is borrowing money, plain and simple.

As I said above, it is sad that our federal government uses these accounting gimmicks to mislead voters into believing that Social Security taxes go to paying Social Security benefits, or that the Social Security program does not add to the deficit. It is similar to what happened in California with proposition 30 (a proposition that I voted for, despite its flaws). The money from prop 30 does not all go to education, but to the general fund, with everyone from fire fighters to prison guards getting a cut.

From your article:

"Mr. Blahous, now one of two public trustees for Social Security, said in his analysis that the payroll tax cut "would take a major step toward transforming Social Security from what it has long been — an earned benefit, funded by separate worker payroll taxes — into an income-tax based system more akin to welfare.""

That step has already been taken -- The tax cut was extended. And it is only through accounting gimmicks and borrowing that the fiction of Social Security as an "earned benefit" is maintained. What Blahous fears, I welcome. Social Security is already (like Medicare) and an "income-tax based system more akin to welfare." If we come to grips with this fact, we can begin to make progress on getting our fiscal house in order.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 30, 2012 at 9:51 am

Kathleen Ruegsegger is a registered user.

John, Here is where we are differing. Social security funds collected were paying social security benefits (somewhere I read that in 2011 it was about 85 cents of each dollar). The remainder was invested in government bonds. Now that social security needs that bond money AND the interest it earned, the federal government will have to borrow from third parties (like China) to pay back what it owes to social security. Add to this what Blahous mentioned, the 2 percent tax cut for workers in 2011 which reduced income by $105 billion, even though the law requires that the fund be reimbursed with general revenues (restated from the NYT chart), and yes, the federal debt increases because of what it owes to social security. We can also agree that social security is now its own pocket with a hole in it as baby boomers retire and there aren't enough working people behind us to cover those collecting. Yes, we agree. It's too bad we can't find a way to move people to private retirement plans (many pits with spikes in the bottom to get there).


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Posted by hoops
a resident of Mohr Park
on Nov 30, 2012 at 10:16 am

John..I apologize for my comment before.I still do not believe whatever the state of the systems are financially,that SS and Medicare are entitlements in the sense that the Republicans talk about them.They are earned benefits that I paid for my entire working life,not a gov't handout.I agree they need to make rational changes to sustain the programs.
The fix seems rather simple to me.Raise the age you can start to get benefits a couple of years and make some changes to the way they stop taking SS after you hit a little over 100k.Maybe say between the limit now up to 250k no additional SS taken out,but from 250-500k add some SS taxation at maybe half the rate of the first 100k.
The other major deal is cutting out the fraud and waste.Go after it like our future depends on it.
The last thing is if you have a net worth of x amount and do not have any need for SS or Medicare,you forfeit it and it goes back into the pot.The rich will cry they are entitled to it because they paid for it,which is true,but it is social security and its purpose is obvious.It is the right thing to do for the country.
Of course getting the bozos in DC to agree to anything is impossible.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Nov 30, 2012 at 10:29 am

Kathleen Ruegsegger is a registered user.

They use actuaries and actually count on some number of us paying in our entire working lives and never collecting (some do get survivor benefits--don't know that it is anywhere near what someone would have paid in). Means testing is a tough sell because it is just another redistribution of wealth. I understand the premise, but I am not sure why success (rich having become a four-letter word) means you owe but can't collect (how about Pete Stark?). So let's say you win a few million from a lottery at 65 and squander it by age 70 . . . can you go back and collect based on what you paid in? Hard to get the bozos to agree when the public can't seem to find a middle ground either.


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Posted by 2012 world
a resident of Another Pleasanton neighborhood
on Nov 30, 2012 at 2:02 pm

I don't know of a catagory that fits creepy old Pete Stark's minor child receiving social security. Technically he's still breathing (barely), so the child is not a 'survivor'....It's these
'NON-retirement' catagories that pull the plan from it's intended purpose.
People with an all too long list of 'disabilities' at very young ages collect SS for much of a lifetime.
My father dropped dead of a heart attack at age 64 1/2, while he was doing his numbers in his plan to 'retire' in 6 months..and he had
been a sole proprietor all his life...those lifetime double $$ fed the system.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Dec 5, 2012 at 1:40 pm

Kathleen Ruegsegger is a registered user.

John, I was sent this information today and thought you might find the slides from 82 on (of 88) of interest (technology). The whole KPCB (Kleiner Perkins) presentation is interesting. Web Link

2012: Sorry about your loss.


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