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A workable compromise on unemployment compensation?

Do you favor Darrell Issa's proposal for means testing for unemployment and SS?


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danarhea

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If you have read my postings in this forum, you have known that, while I am a Conservative, my wife is an unabashed Liberal. Yes, she and I argue politics almost every day but, sometimes, Conservatives and Liberals can find common ground, even in the political climate that exists today.

My wife and I watched Real Time with Bill Maher, and out of that, found something that we both agree on. Republican Darrell Issa, who was on the show, made a statement that my wife and I both agreed with. This had to do with unemployment.

On the show Real Time, with Bill Maher, Darrell Issa, a Republican winner in California, who will now be the new Chairman of the Oversight and Reform Committee, brought up a point about unemployment insurance, and Social Security. He is not in favor of abolishing either one, but believes that means testing can save the taxpayers quite a lot of money, and help reduce the deficit. And let's be frank about this issue - The deficit is completely out of control. Like it or not, steps to reign in Government spending MUST be taken or else. In the opinion of both my wife and myself, means testing, as suggested by Issa, is an excellent idea. If someone makes more than 100k per year, unemployment insurance should not be an option.

Yes, yes - I will agree that this might not be fair. People have paid into Social Security and Unemployment Compensation for many years, who would now not have access to them, should something like this pass. But we need to be realistic. The Government is not living within its means, and the result is economic hardship for each and every one of us. If we are going to attack the deficit responsibly, then everything should be on the table. Deep cuts in the budget need to be made, especially if a compromise that allows the Bush tax cuts to continue for a period of time is reached.

Both Conservatives and Liberals talk a good game of patriotism, but here is an acid test of walking the walk. Is either side willing to embrace Issa's proposal, which I believe will be put before Congress soon, or is finger pointing going to rule the day? It is one thing to attack the other side, and it is another thing to do what is right. I stronglly believe that Issa's proposal is a good one. It may not save that much money, but it is a start. Will Liberals and Conservatives embrace this kind of a compromise, and take a small first step towards balancing the budget, or will they continue the BS finger pointing at each other? If my wife, and unabashed Liberal, and myself, and unabashed Conservative, can both agree with a Republican on an issue, then this must be a good issue, right? And this is the very first Republican my wife has ever said that she would vote for, if she lived in his district. What this means is that we have a Republican who is reaching out and attempting to do what is in the best interest of the nation, instead of putting party first. Kudos to him, and I will also give kudos to any Republican or Democrat who looks for solutions first, instead of attempting to make a political football out of any issue that can restore America to common sense.

So, on this issue, brought up by a Republican, are Democrats willing to jump on board? You had better. This kind of common sense is what voters are demanding. If you don't believe that, then you don't believe what is right in front of your own eyes, which was demonstrated in spades at the ballot box last Tuesday, and you will quickly become irrelevant as a political party. If this proposal by Issa was good enough for my wife, who is an ardent Liberal, but can see the truth in the obvious, then yes, this is a proposal that can bridge the gap between Liberals and Conservatives, and begin to restore American to a sane footing.

Like it or not, and no matter which party you belong to, the idea of fiscal responsibility, and finding ways to balance the budget, while appealing to Conservatives and Liberals alike, is going to be the main issue in 2012. Those who don't see that, and I am talking about Conservatives as well as Liberals, are doomed to lose.

Now answer the poll.
 
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Hoplite

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I'm a little uncomfortable with applying a stock formula to everyone who needs help. People's situations are different and a simple formula might end up booting people who genuinely need help but whose circumstances dont precisely fit.

That said, I'm only passingly familiar with means testing so I freely admit I may have missed a big part of it.
 

Paschendale

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Fixing the deficit is easy. 1. Stop fighting wars. 2. Stop building so many tools of war. 3. Only buy enough expensive medical procedures to make the dying process half as long for old people. Let them go with some damn dignity instead of wasting away, in horrible pain, while their minds turn to mush.
 

RestoreReason

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Great topic! I do agree that this is an idea that needs to be given some serious consideration. We are just in too big of a deficit hole and we need to look at all the options to dig our way out. Social Security and Medicare are both important programs that help a lot of people, but given our financial situation, can we afford to help those who do not need help? Lets look at means testing for both of these programs. The fairness argument is absolutely valid, but as the OP stated, we must be realistic and begin saving everywhere we can.
 

d0gbreath

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Dan, you said that both you and your wife were in favor of no unemployment insurance benefits for individuals that make more than 100k/yr, but I didn't read any consensus that ya'll may have had for SS. How about the sacred cow?
 

Graffight

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Very interesting, I was talking to my wife about this. She was having a conversation about this with some other people. While I can understand the logic here, I think it’s taking a step in the wrong direction by further forcing the rich to pay for the poor.

The only way I would go for something like this, is if one had the ability to opt out of the system entirely. So if I’m making “x” amount of dollars and feel like I don’t want to utilize social security then I should be able to do so. Maybe there could be some contingency plan so that if you opt out, you’re out for good. (I’d like it if your money could be returned to you, but that’s unlikely.) So the gov’t keeps the funds you’ve already contributed, but you don’t have to contribute any more if you don’t want to.

The way I see it, anything that allows the gov’t to remove money from the rich without compensation and by force is unjust. It’s bad enough that social security exists, but to force people to pay for it and not benefit from it just creates another welfare system.
 

ricksfolly

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Fixing the deficit is easy. 1. Stop fighting wars. 2. Stop building so many tools of war. 3. Only buy enough expensive medical procedures to make the dying process half as long for old people. Let them go with some damn dignity instead of wasting away, in horrible pain, while their minds turn to mush.
You failed to mention outright cash donations, in the billions, to so-called political allies and the huge cost of maintaining the thousand military posts in countries all over the world.

We could also start a Gov Department to check-out every product on TV to find out if they work as advertised, including all the new expensive drugs. That would save over $100 billion a year.

ricksfolly
 

cpwill

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means-testing isn't just a good idea; it's going to happen one way or ther other. the math is irrefutable.

as for Social Security; here is my idea; allow workers to opt into a partially privatized system, where of their 7.65% FICA expenditures, 5% goes into a private TSP-style account; and the Employers match follow the same. the remaining 2.65% (or, when you count the match, 5.3%) will go straight into SS, but it will be revenue for which SS will never see a liability. the cost for opting out is that part of your pay continues to go to pay for others, but the upside is that you get a combined total of 10% of your annual income going into a retirement account that belongs to you, and grows tax-free. Social Securities' revenues will instantly drop, but nowhere near as severely as their liabilities. To ensure solvency in the adjustment period (and to make it politically palatable); lift the cap. Higher paid workers will see more of their money leave in the form of taxes, but they will get back even more in the form of ownership of personalized accounts, and so they will be willing to make the trade. Poorer workers can either spend their lifetime building far more wealth than they ever would have seen under Social Security if they are younger, or keep the guaranteed program benefits if they are older.


ta-da! the American people and the Government are left better off.
 
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cpwill

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as for unemployment, yes, means test it. also limit it's time. make its' recipients do government work; clean the roads 4 hours a day, whatever. do whatever you can to shrink that beast and put people back to work.
 

cpwill

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means-testing isn't just a good idea; it's going to happen one way or ther other. the math is irrefutable.

as for Social Security; here is my idea; allow workers to opt into a partially privatized system, where of their 7.65% FICA expenditures, 5% goes into a private TSP-style account; and the Employers match follow the same. the remaining 2.65% (or, when you count the match, 5.3%) will go straight into SS, but it will be revenue for which SS will never see a liability. the cost for opting out is that part of your pay continues to go to pay for others, but the upside is that you get a combined total of 10% of your annual income going into a retirement account that belongs to you, and grows tax-free. Social Securities' revenues will instantly drop, but nowhere near as severely as their liabilities. To ensure solvency in the adjustment period (and to make it politically palatable); lift the cap. Higher paid workers will see more of their money leave in the form of taxes, but they will get back even more in the form of ownership of personalized accounts, and so they will be willing to make the trade. Poorer workers can either spend their lifetime building far more wealth than they ever would have seen under Social Security if they are younger, or keep the guaranteed program benefits if they are older.


ta-da! the American people and the Government are left better off.
Because I am a nerd, and I like doing this sort of thing, I ran the numbers.

Joe graduates High School and goes to work, making 25,000 a year. Not anyone's idea of incredible pay, but there you are. Joe gets' a 2% raise every year to account for his increasing talent, experience, etc. the 10% of his income goes into a mix of funds that matches the S&P 500 average since 1982: 7.98%, after you account for inflation. If Joe retires nice and early at 62; his retirement fund will be worth $1,030,110, and if placed into an annuity / conservative account that generates a 5% annual return, his monthly benefit will be $4,292. That would be slighly less than his last monthly paycheck of $4,979; but still quite livable. If Joe works until he's 65, his monthly benefit will climb above his monthly income to $5,473; and if he decides (as most of us probably will) to delay retirement to 68, he's looking at a monthly retirement check of $6,966.

And remember, Joe isn't exactly one of society's higher paid workers.

But he also had the advantage of time. Let's say instead Joe went to two years of college, and got an associates before entering the workforce to earn that 25,000; and let's say that instead of 2%, Joe turns out not to learn new skills that well, and his annual raise above inflation is actually 0.5%. We're stacking the deck a little against ole Joe, but he still seems to come out okay; his monthly benfit at age 62 is $3,050; at age 65 it's $3,875; and at age 68 it's $4,915. It's worth noting that under this model, the most Joe ever made was $31,672 in a given year; and that his monthly retirement benefits at age 65 represents a $1,200 monthly pay increase over his monthly income. Even if Joe retires early at 62 he will have more in income off of his account than he would from working; and the longer he chooses to keep working, the greater, obviously, his return is.



AND ALL THIS WITHOUT COSTING OLE JOE A SINGLE RED CENT. since the money was cash he was losing to taxes in the first place, his take-home pay wasn't reduced one iota; but because we partially privatized social security, Low Income Worker Joe can retire a millionare.

OR, if he didn't want the 'risk' of the marketplace, he could have chosen to stay with regular social (in)security. average monthly payout: about $1,100 dollars. or, roughly 1/3rd of what Joe made in our worse case scenario at age 65.


BUT WAIT!!! WHAT IF THE MARKET TANKS!!!

Markets recover. If the market tanks right as Joe was planning on retiring, he can work for an extra year while it rights itself, or simply choose to draw less from the account in order to leave more in there to ride the recovery. OR, if Joe makes the worst decision possible, at the worst time possible and withdraws all of his money while the market is at the low point on the trough (say, a 40% drop, similar to what we just saw), to purchase a 5% annuity, then his monthly income in our worse-case scenario at age 65 will still be more than twice what he could have expected from Social Security.


:thinking: perhaps that's the real problem with privatization of social security; it gives poor people freedom from dependence upon government spending?
 

ricksfolly

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means-testing isn't just a good idea; it's going to happen one way or ther other. the math is irrefutable.

as for Social Security; here is my idea; allow workers to opt into a partially privatized system,
I agree with means testing, and treating capital gains the same as any other profit, but not messing with SS.

With a partially privatized system, too many would opt out along the way for a variety of reasons and end up with nothing, and without their input, there wouldn't be enough money left in the pot for the remaining SS participators to retire with enough money to live on.

ricksfolly
 

cpwill

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which is why you have them opt out 5 of their 7.65% 'contribution, and have their employer match. now SS is getting in revenue for which it has no liability.
 

ricksfolly

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The whole theory of our institutions is based on the liberty and independence of the individual. He is dependent on himself for support and therefore entitled to the rewards of his own industry. He is not to be deprived of what he earns that others may be benefited by what they do not earn. What lie saves through his private effort is not to be wasted by Government extravagance.

-Calvin Coolidge
That might have worked back then, Calvin, but not now when independent farms and manufacturing are dying out. The only reason we aren't in a deep depression right now is SS and pension spending, cash they didn't have back in the thirties.

Face it... Were in the middle a economic situation never seen before, and we have to adapt our thinking to fix it... If the government stops creating new jobs, and stops extending unemployment insurance checks, even SS and pensions won't be near enough to survive it.

Our economy is like a flat tire, needs "free" air pressure to re-inflate it.

ricksfolly
 

liblady

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If you have read my postings in this forum, you have known that, while I am a Conservative, my wife is an unabashed Liberal. Yes, she and I argue politics almost every day but, sometimes, Conservatives and Liberals can find common ground, even in the political climate that exists today.

My wife and I watched Real Time with Bill Maher, and out of that, found something that we both agree on. Republican Darrell Issa, who was on the show, made a statement that my wife and I both agreed with. This had to do with unemployment.

On the show Real Time, with Bill Maher, Darrell Issa, a Republican winner in California, who will now be the new Chairman of the Oversight and Reform Committee, brought up a point about unemployment insurance, and Social Security. He is not in favor of abolishing either one, but believes that means testing can save the taxpayers quite a lot of money, and help reduce the deficit. And let's be frank about this issue - The deficit is completely out of control. Like it or not, steps to reign in Government spending MUST be taken or else. In the opinion of both my wife and myself, means testing, as suggested by Issa, is an excellent idea. If someone makes more than 100k per year, unemployment insurance should not be an option.

Yes, yes - I will agree that this might not be fair. People have paid into Social Security and Unemployment Compensation for many years, who would now not have access to them, should something like this pass. But we need to be realistic. The Government is not living within its means, and the result is economic hardship for each and every one of us. If we are going to attack the deficit responsibly, then everything should be on the table. Deep cuts in the budget need to be made, especially if a compromise that allows the Bush tax cuts to continue for a period of time is reached.

Both Conservatives and Liberals talk a good game of patriotism, but here is an acid test of walking the walk. Is either side willing to embrace Issa's proposal, which I believe will be put before Congress soon, or is finger pointing going to rule the day? It is one thing to attack the other side, and it is another thing to do what is right. I stronglly believe that Issa's proposal is a good one. It may not save that much money, but it is a start. Will Liberals and Conservatives embrace this kind of a compromise, and take a small first step towards balancing the budget, or will they continue the BS finger pointing at each other? If my wife, and unabashed Liberal, and myself, and unabashed Conservative, can both agree with a Republican on an issue, then this must be a good issue, right? And this is the very first Republican my wife has ever said that she would vote for, if she lived in his district. What this means is that we have a Republican who is reaching out and attempting to do what is in the best interest of the nation, instead of putting party first. Kudos to him, and I will also give kudos to any Republican or Democrat who looks for solutions first, instead of attempting to make a political football out of any issue that can restore America to common sense.

So, on this issue, brought up by a Republican, are Democrats willing to jump on board? You had better. This kind of common sense is what voters are demanding. If you don't believe that, then you don't believe what is right in front of your own eyes, which was demonstrated in spades at the ballot box last Tuesday, and you will quickly become irrelevant as a political party. If this proposal by Issa was good enough for my wife, who is an ardent Liberal, but can see the truth in the obvious, then yes, this is a proposal that can bridge the gap between Liberals and Conservatives, and begin to restore American to a sane footing.

Like it or not, and no matter which party you belong to, the idea of fiscal responsibility, and finding ways to balance the budget, while appealing to Conservatives and Liberals alike, is going to be the main issue in 2012. Those who don't see that, and I am talking about Conservatives as well as Liberals, are doomed to lose.

Now answer the poll.
this should be on the table in some form, agreed.
 

Mach

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Absurd idea.

To think someone could suggest that a system that we voted on with the clear promise to us that what we pay in, will be paid back to us, could be usurped to pay down spending that is NOT the result of 100K+ earners. It's some huge cluster **** of wrongness.

I mean, it's bait and switch, it's discrimination, it is like employeeA keeps making mistakes so we punish personB routinely and expect this somehow helps something. It's terrible, terrible. Trust in government?

I don't even think $100K approaches a reasonable mark. A working couple makes $100K soon out of high school or college. Two $50K jobs or a $60/$40, just not that much.
People that get more than $100K per year after tax from cap gains. That's a means test I can live with, but still not for SS.
SS can be changed for people NOT paying in, sorry. Reduce benefits overall if it sucks that bad, and phase it out.

$100K in some areas of the country is probably near-poverty level. $100 with 5 kids, in a good neighborhood with good access to your workplace(s)...you need that insurance if you counted on getting it. With 2 people pursuing their careers, at just $50K each, they are gonna have to spend a lot more to keep their grass cut, house clean, and to compensate for the work stress, etc. It's gotta be their choice to buy insurance or not.
 
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Chappy

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The minute you means test unemployment insurance and Social Security you convert them into something they are not: welfare programs. No, they are insurance programs and they should stay that way.
 

cpwill

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and are you willing to drive them into the dirt and end up with getting rid of them alltogether in order to keep them as faux insurance programs?
 
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