Friday, October 28, 2011

Social Security Cost of Living Increase,Rise in Medicare Premiums – Not Enough to Keep our Seniors Solvent - the Program that drive our seniors into P

The Boston Globeheadlines: Medicare Premium’s up but not as much as expected” continues to attempt to placate Seniors that may fear cuts to Medicare, by quoting the HHS Secretary, Sibelius, as saying “There is nothing to fear from the Health Care Law”, (Globe) – The major question is: did she read it? Cuts in Medicare payments to doctors is an ongoing problem with the program, in addition to an increase in regulations that make it difficult for the private practice to take on more patients, and or to cover the costs of operations, when one includes ever rising malpractice insurance premiums. One physician, who closed their practice in Massachusetts just prior to the passage of the bill, noted that Veterinarians make more than Physicians at this point – speaking to the now almost extinct family physician. This in addition to President Obama’s proposed $320 Billion dollars in Medicare cuts (Kaiser Health News), there may be a reason why seniors are a bit concerned. Moreover, due to the economy, seniors are not spending as much on health care services (Globe).

However, this year, with the rising costs of Medicare and Inflation, the first Cost of Living (COLA) increase since 2009 has been approved by the Social Security Administration – at 3.6% of monthly benefits. The increase in Medicare premium cuts will amount to approximately $3.50 in additional deductions (or 10% of the COLA increase) (Globe) – How much does politics factor into this - again, the Globe notes that

“It could be good, too, for President Barack Obama and Democrats struggling for older Americans' votes in a close election.”

Senior Citizens currently receiving benefits, are already concerned with the rising costs of food and fuel (which is not factored into the rate of inflation released by the Depart of Labor Statistics, which figure is used by the Social Security Administration as the basis for the percentage of COLA increase, an increase in Medicare Premiums, food and fuel, basically negates the 3.6% increase. For example, a widow earning Social Security Benefits of $600 per month will see an increase of $21.60, as Social Security Benefits are not immune to Federal Taxes, (see article here on” Although Social Security retirement benefits are generally not taxable, people with substantial income in addition to their Social Security payments may pay taxes on their benefits. If you file a federal tax return as an individual and your "combined income," -- calculated by adding one-half of your Social Security benefit to other income, including nontaxable interest income -- is between $25,000 and $34,000, 50 percent of your benefits will be considered taxable. If your combined income is above $34,000, 85 percent of your benefits are subject to income tax. If you file a joint return and you and your spouse have a combined income between $32,000 and $44,000, 50 percent of your benefits will be subject to tax. If your combined income is more than $44,000, 85 percent of your benefits are subject to income tax.”)

Therefore, a couple who has retired or has been forced to retire, with an income of $44,000 per year (before taxes) that consists of social security, are subject to a 50% tax on benefits, which, is a real eye opener – the highest payment to social security recipients is capped at $2366 (2011), therefore, assuming that an individual receives $28,392 in SSI Benefits, (and is the sole provider of income for a couple) retirement benefits (and is the sole provider of income for a couple (not unusual for those over 65 at present) should they have an additional annuity or pension that equals roughly $15000 annually, the net result is a $14,196 tax, leaving that couple with $24,000 annually – Out of those “wages”, there are state and local income and real estate taxes, should they own a home – cutting further into available funds for luxury items such as food, heating oil and co-pays to medical groups, as well as insurance premiums should the couple own a car, have life or long term care insurance.

The current system does nothing to help SS recipients (specifically retirees) – it does give them additional income, but constrains them in that income received, and if they go over due to an additional retirement plan and or part time job, they are taxed back to the Stone Age.

Who is eligible for Social Security Benefits? Retirees and those who are considered “Disabled” by the SSI administration are eligible for a range of benefits. Disabilities maybe something serious, granted, but others who are eligible for benefits include groups such as: children and young adults with ADHD. In addition, Medicaid, which is a sister program, is available to immigrants, especially if they lack English Language skills.

Therefore, the program should be specifically for those who have paid in, for retirement programs and separated from other “giveaway” programs. In addition, seniors should not be penalized for earning a wage that is at middle class, by forcing them to the poverty level.
Is it no wonder the system is broke – and it is a sham on the nation that politician’s use this most important lifeline (what there is of it), to sway a vote on those, who for the most part, are living day to day on what’s left of their Social Security Check, while delivering nothing, changing nothing, and using those monies to fund programs outside the scope of “retirement”.

Thursday, October 27, 2011

Massachusetts Redistricting Update – Olver (D, MA1) to Retire – Carving Up the Commonwealth - Analysis

the Massachusetts Current 10, down to 9, the main players in the West: bottom row left to right: McGovern(MA3), Neal (MA2), (Keating)and Olver (MA1) photo Boston Herald

Massachusetts Redistricting is underway, with the new proposed “district maps” drawn up for the Commonwealths Legislature, Senate and Governors Council – the Federal Congressional Districts are still up for debate. Considering that the 10 House Seats, held by either High Profile Democrat power brokers, or plain old reliable party line votes in the House, must be condensed into nine districts, the options of which of the Democrats would be cut has been the subject of much speculation. This speculation is ongoing as no final plans or even proposed maps are, as of yet, available. In Massachusetts however, the power center is in the East, with the Western part of the Commonwealth left on its own, for the most part, all but ignored unless an election year is on hand, or one of the more vocal Representatives, such as Richard Neal (D-2) is touting the latest Federal Grant to the area.

One in Boston might look at the Western Mass in terms of Virginia and West Virginia, while those in the Western End, often offer up consideration for just such a scenario – basically tired of paying taxes to Boston for underrepresentation, and use of resources to aid the East. That said, when it comes time to redistrict, which is based on an ever declining population (U.S. Census 2010), the natural course of conversation went, not to Congressional District Heavy Eastern Massachusetts, but to the three districts that make up the Central and Western ends of the State.

There have been proposals that have been spoken of in the halls of the State’s Legislature and Committee meetings on the subject, but to date, nothing has been finalized.
One thing is certain, one of the Districts must go, and that choice may not be so difficult now with the announced retirement of one John Olver, Democrat from the MA First District. The announcement came yesterday, (Reuters), a statement was released by Olver’s spokesman – Olver has held office since 1991, over the largest district in the Commonwealth in land mass - not population. This offers a clean solution to the conundrum of the redistricting conundrum, and would put to rest the rumored proposal of a combination of the first and third district, with Olver and fellow Democrat McGovern, vying for the same seat. Richard Neal, (D-MA2) would be, for all intents and purposes, left alone, given his standing in the House, where he sits on the powerful, taxing, House Ways and Means Committee. Prior to the landslide Republican Victory in 2010, Neal sought the Chair of the Committee, however, that Chair was given to Sanders of Michigan – the decision made by Nancy Pelosi, then Speaker of the House. With the plan in place to take back the House (at some point in the next decade), Democrats would be loath to lose Neal, who is one of the most reliable, if not the most reliable Democrat in the building, and who works the Ways and Means Committee to the best taxing advantage possible.

Looking at the current map and the manner in which the distinct is currently drawn, The MA1st, takes up the majority of the land mass west of Springfield, which the large population areas of Springfield up to Northampton carved into the 2nd District (in a boot shape), and the Central Mass District, (MA3), surrounded by both the MA 2 and the Eastern Districts. Understanding that these Districts are drawn based on population and politics, Massachusetts defines Gerrymandering, taking pieces of the 1st and merging them within the MA 2 and MA 3 districts makes sense. Just how the Democrats on Beacon Hill plan to carve up this turkey is anyone’s guess, however, in looking at the current map (shown below), one would think that a natural course would be to merge parts of the 1st into both the 2nd and 3rd districts, and possible moving smaller population zones, or those cities that may vote on non Democrat line into the 3rd, replacing those with equal population areas that are more heavily concentrated in population. Outside of Pittsfield in the West and Greenfield to the North in the MA 1, there is more land mass than potential voters, therefore, literally cutting the district in two, and merging the upper half with the MA 3 and the lower or parts thereof, with the 2nd, would solidify both Neal and McGovern’s positions. It is difficult to imagine that Neal will not come away with any additional population from the 1st, all things being allegedly equal in the redistricting game – What one can be sure of, is that the final map will appear as ridiculously misshapen as the map shown below, with districts, cutting into one another, surrounding one another, and or jutting in and out of one another, with the ups and downs of the population.

With the time it has taken to carve up the state, little time is left between the final plan and the filing date for those who wish to run against any of the Incumbents - August 28th 2012 is the last date to file as a Congressional Candidate, the primary to be held on September 18th 2012, and the Election on November 6, 2012 (Secretary of State’s office). Therefore, a candidate who intends to run for Congress, against one of the remaining nine incumbents, will have approximately one month to campaign, ensuring that Massachusetts voters will not enjoy a ballot that offers choices in the Federal Congressional Race. 2010 was a rare occurrence, where nine of the ten incumbents faced challengers and had to actively campaign for their seats. It remains to be seen how many challengers will rise to the occasion in this shortened and almost impossible scenario. It appears that, once again, Massachusetts voters will have to opt for Disney and Warner Brothers characters as write-in should they disagree with the only choice on the ballot. Thus is the nature of the “People’s Republic of Massachusetts”.

See the current Massachusetts District Map Below:

Current Map of the MA Congressional Districts, via

Wednesday, October 26, 2011

Rick Perry’s Tax Plan – Brilliant in Budget Reform – and “Optional” – A short tutorial on Government and Taxes – Congress will be the Key

Rick Perry, Tax and Budget Plan Worth Second Look - photo: borowitz report dot com

With all the hoopla and horror surrounding the various tax plans that GOP Presidential Candidates have proposed, the single biggest misconception is that any “plan” proposed will be written immediately into law. Taxes are essentially subject to the will of the Congress and its Ways and Means Committee. Simply put, the Ways and Means Committee oversees Social Security, and Revenue, two of the largest targets of both political parties. The Subcommittee of Select Revenue Measures is especially important and who is on that Committee, makes the calls regarding our current tax structure. Currently, Congressman Richard Neal (D-MA) is the ranking member. Neal’s approach to taxes has earned him the moniker of ”Nancy Pelosi’s and Ireland’s Tax Man”. Neal, a staunch, straight party line voting, Progressive Democrat, is able, regardless of which party in currently “power” to influence taxes across the board – from individual to corporate.

It is true that when Congress is “flipped”, and either the Republicans or Democrats are in control, that influence is either enhanced or capped, however, the fact is that the individual sitting in the Oval Office has less input than a strong Speaker of the House when it comes to one’s income. It is a strong leader in the Oval Office in concert and more media savvy than a Speaker that will get the job of tax reform accomplished, if, and only if, that speaker has control of the Ways and Means Committee.
If Perry or any other GOP candidate can exert that kind of influence, then and only then, will change occur.

Perry’s plan is simple, in so far as it eliminates a load of paperwork and places a flat tax into place, with standard individual deductions, deductions for state and local taxes, capital gains, mortgage interest and charitable contributions. The key words are ”choice” (see Business Week article here, and “optional”. From the Rick Perry campaign website:

By implementing a simple and optional flat tax that will allow Americans to file their taxes on a postcard, up to $483 billion a year could be saved by American families and businesses in reduced compliance costs alone.13 A simpler, flatter tax code – free from the dozens of individual carve-outs that make the code so incomprehensible – will remove the disincentives to work, entrepreneurial risk-taking, and investment that form the foundation of a strong and vibrant economy.

Lower- and middle-income families will be able to take advantage of an optional 20% flat tax rate that includes generous standard exemptions of $12,500 for individuals and their dependents, as well as deductions for mortgage interest, charitable contributions, and state and local taxes.

Not, unlike Cain’s 9-9-9 plan, Perry’s approach is Reaganesque, putting tax cuts in place that would encourage corporate growth and job creation, however, the option to revert to the current code is included in Perry’s.

The key however, in Perry’s plan is a moratorium on regulations that affect the tax code, a review of all regulations that are obsolete, and a mandatory review of each government agency’s annual budget. The agency budget review and mandatory approval by Congress for additional funds measure, would be a vast improvement over the current system, and one for which Perry and his Economic Team should get high praise.

Overall, there are elements of both Perry and Cain’s plan that are commendable, and either would be an improvement on the current system, however, Perry’s addition of specific tax cuts and Departmental Budgetary regulations is superb. Under the current systems, each Department is awarded an annual budget, a budget that if not spent in its entirety results in a cut in budget funds for the following year. Departments are literally forced to overspend, by millions of dollars, in order to receive future funding – a change in this ridiculous system, would eliminate waste, and go a long way towards balancing the budget.
Finally, Social Security would be treated to an overview, a repeal of the current tax on Social Security benefits, and a charge to Congress to stop “raiding” Social Security Funds. It does not change the way benefits are delivered to those who are now receiving or near receiving Social Security.

Therefore, Perry’s plan should receive an A+ from the public, and although the Governor noted that the plan would reduce government income, when queried by news agencies, apparently no-one took into account the provisions for departmental budgetary controls. That is especially true of two strange bedfellows: Fox and CBS, who alternately called the plan a “disaster for America” (Fox), and a “substantial revenue loss for the U.S. government”(CBS).

The one individual, who ends up taking on the task of the President of the United States, will have to be a strong enough leader to work with and encourage tax code changes through the Congress and specifically its Ways and Means Committee. Ronald Reagan was the last President to achieve that goal, and the economy, under Reagan’s plan, improved vastly within the span of a few short years. Rick Perry, to his credit, notes that this is not an overnight solution, and any one candidate, who offers a solution suggesting change would be immediate, is simply playing with fire. Consider Obama’s plan for Health Care Reform, a plan that was crafted in the House, by Senior Democrats, and Nancy Pelosi at the helm, in haste – and pushed through Congress (one must give that woman credit, she ruled with a whip – whether on agrees with her politically or no.) It is now one of the least popular plans to come out of a White House, and it is doubtful that the Act will stand as waivers are granted, and challenges to the Constitutionality are brought by States are won in the Supreme Court. It was the promise of immediate Hope and Change, lack of experience and a Congress packed with Progressive (Socialist) Democrats in complete power, which led to this horrific mess we now face. (Include in that equation the Republican controlled Congress spending spree going back through he Bush administration.)

Tax reform is essential, but more essential is the reform of the budget regulations for each Department of the U.S. Government.

Tuesday, October 25, 2011

Obama Signs Student Loan Forgiveness! Repayment Capped at 10%, Forgiveness of Debt, Ends Subsidies Given to Banks Who Handle Student Loans

Obama Signs Student Loan Forgiveness - March 2010 - Image via

On Wednesday, the President will announce new measures to change the Student Loan Program – again. In March of 2010, President Obama signed an “Overhaul of Student Loan Program” according to the New York Times. The article notes that the Student Loan “Initiative” was signed into Law by the President the same week as the Health Care Reform Act – and went somewhat unnoticed – most likely by those who are now “occupying” Wall Street.

The Gist:

1. The law takes fees paid to private banks to administer loans and transfers those monies into the Pell Grant program – increasing grants to a maximum of $5,975 over the current $4440 by the year 2017.
2. Invests in Community Colleges
3. Caps Interest repayment at 10% of income in 2014
Forgiveness of Debt after 20 years with consistent payments and/or forgiveness after 10 years for public service (includes teachers, nurses and military service).

The president touted this reform in his weekly address on March 27th, 2010:

“WASHINGTON – In this week’s address, President Barack Obama praised the bold reforms to the higher education system passed by Congress this week. These reforms save the taxpayers $68 billion over the next decade by ending the subsidies given to banks and middlemen who handle student loans. The money saved will help expand and strengthen the federal Pell Grant program. The reforms will also cap college graduates’ annual student loan repayments at 10% of their income, revitalize community colleges, and increase support for Minority Serving Institutions. “ (Read More:)

(Address to Nation on Student Loan Act Below)

The entire text of the “Jobs Act” signed into Law along with Health Care Reform in March of 2010 is available here:

Therefore, if one is Occupying Wall Street and complaining that President Obama needs to do something about Student Loan Forgiveness, one should be aware that the man already did. If you have a problem with the debt you have or are accumulating, consider public service, volunteer for the military, teach or become a nurse to fast track your forgiveness. If public service does not appeal, then a twenty year plan is one the table. If you are furious with the Banks for jacking up the Price of your student loans – You’re furious with the wrong institution – the banks no longer receive those fees.

Obviously, the President, for all his good intent, failed to get the message that he had already passed this “Bold” to the unwashed masses that are “Occupy Wall street” (or any particular city, town or hamlet in the event it is not convenient for the group to travel to New York City.)

Therefore, since the President has already done his best, and you complained, loudly, with the help of the unions – the President is once again, going to announce a new initiative in Denver on Wednesday, October 26th to help you out of your Student Loan crisis. Of course, details are forthcoming, however, one can well imagine that should you stick it out – sometime within the next three to four decades – your demands will be met – and the taxpayer will be on the hook for all of it.

The only forgiveness of student loan debt that should be on the table would be the right to add student loan debt into a bankruptcy filing. In the case of debt restructuring, under the current bankruptcy laws, student loans are exempt, meaning they cannot be included in those debts that are dismissed. This should be changed, specifically in cases of extreme hardship, where one can document having achieved a degree, found gainful employment in his/her chosen field, has lost that gainful employment and is sitting on unemployment trying to find a job that even comes close to paying ones debts.

Of course, this could be solved by increasing the number of private sector jobs available in the nation, and that would begin by cutting the corporate tax rate and inviting corporations back into the U.S. In addition, a national Right to Work law, which allows employees to opt out of unions, would put a) more money in the employee’s pockets to pay the student loan debt in the first place, and b) invite even more corporations into the country bringing in additional jobs to fill.

Therefore, don’t blame Obama for not meeting your demands, he already has, in 2010, however, you may be able to blame him for not taking the Bold Steps necessary to stimulate the private sector mentioned in the preceding paragraph.

Remember: The government does not create wealth, or have any products or services that it sells to make money – the only way the government gets money is through – taxes. The fewer individual workers the government has to tax, the less income that the government has to spend (or it must borrow more), when the Federal Government “creates” Federal, or State or Local Government jobs, those jobs are funded by the Taxpayer, who is the only source of Income the Federal Government has. This does not stimulate the economy, only private sector jobs will stimulate the economy.

The Video of President Obama: The Student Loan Reform Movie Released - March 2010

Monday, October 24, 2011

Obama to By-Pass Congress on Student Loans and Mortgage Reduction – Work directly with Fannie and Freddie – Plays Occupy Arm of Campaign

Obama on Occupy Campaign - from the blog "Think Progress"

From The Chicago Tribune: “Obama to announce actions on housing, student loans” – the headline touts the President’s upcoming plan (details forthcoming) regarding restructuring home loans that have no equity (i.e. “under water” or loans that are much higher than the actual worth of the home – a situation that has worsened under the Administrations’ watch – as housing prices decline, a homeowner, who may wish to move to another part of the country, and or lower their mortgage rates, now finds themselves without the ability to either effectively sell the home and/or find financing in this credit crunch – lenders are not likely to extend or review a line of credit for an individual whose home is worth far less than the mortgage, and there is little to no equity in the home). This is one of the complaints of the “Occupy Wall Street” protestors, many of whom are on the payroll of Organizations that worked with Obama’s 2008 campaign.

Obama is, apparently, working with the FHA to bring this gem to Fannie and Freddie, the largest lending arm of the Government, and the one which is known to be less than financially solvent. Going directly to the FHA gives Obama the option to bypass Congress, charging that the Republican’s would block such a move – however, to be clear, the problem with underwater mortgagees has pre-2010 origins, and prior to that the President enjoyed a Democrat Controlled House and Senate – now, he faces a Republican controlled House, yet the Senate is still in Democrat Control – therefore, he a) might have thought about doing something sooner than later, and b) he most likely cannot get the votes necessary from Democrats to push through his latest initiative.

The second financial struggle (also on the “Occupy” protests agenda) is the overwhelming student loans that many of the protestors face. Apparently, unable to pay the huge sums that make up a college education and or fearing having to pay off large student loans, this issue is in the forefront of the movement primarily made up of students. The Student Loan Industry, a wholly owned subsidiary of the U.S. Government (passed into law by the President, through an Omnibus Spending Bill), has held the same model as previously when both private lenders and the main lender, Fannie and Freddie, were at the helm. Again, the same options of taking this through a Conges and Senate in Concert was on the table from 2008 forwarded, and from 2010 forward, the President still has the Senate in his corner, if he choose to push and or bock legislation. Although plans for the mortgage options are being announced earlier than the “Student Loan Initiative”, details on the mortgage plan will not be available until mid-November, (which may or may not be the date for details on the student loan initiative.).

With interest rates higher now, on Student Loans, and the cost of education through the proverbial roof, (unless one attends a community or state college and/or takes courses on line to reduce costs), students suddenly imagined they would be liable to pay off loans that would require six figure incomes, something that in this economy is a long-shot at best. The Occupy Group is asking for forgiveness of student loans, something that this administration has already done for those who work for the Federal government and or have risen to the challenge of volunteering for specific organizations approved by the Administration for a period of two years, (which this blogger feels is one of the better aspects of that particular plan by the administration – public service and reward for the same. That said, the only aspect of the program that could undergo some retooling – is the fact that one cannot get out from under a student loan, in the same manner as one might get out from under a home loan or any other type of secured or unsecured debt – through bankruptcy. In fact the student loan is the only loan or debt that one is not able to include in a bankruptcy filing and it is this opinion that is one option that should be on the “table”. Understanding that some might cringe at the idea of a federally funded student loan going under the bankruptcy heading, one must also understand that if a loan holder has lost his/her house, car, is un or underemployed, and cannot see any light at the end of the tunnel, that individual is still liable for the entire loan, and incurred interest and fees assessed while unable to pay and or obtain a forbearance (an option that allows the loan holder to delay payments for extended periods of time. Although the forbearance option can be viewed as a “safety net” – how much more so if those loans were included in a bankruptcy filing? It would take the will of the individual to go through the filing in the first place, and the fees to file, in order for the loan to be discharged under personal bankruptcy laws – which beats “forgiveness” of loans straight up – an out, but an out that has other consequences and is a course of last resort.

As both these issues are brought to the forefront now, three years into the administration, it appears to be more “campaign rhetoric”, touting programs that won’t get the support of both houses (one which is controlled by the Democrats), and yet, the Administration is harping that it is the Republicans who will block his bill – It was not the Republican’s who blocked the Administrations “Job’s Bill” – which supported long term stimulus and unemployment insurance for those already working in a government position, be it a teacher or firefighter or police. The jobs bill did nothing to crate private industry jobs, which, those jobs, in plain speak, are the source of the Federal Governments funds and allow the m the ability to fund those multi-billion dollar teacher’s aide Bills. At the moment, with high unemployment I the private sector, even House and Senate Democrat are unwilling to sign another stimulus. The idea that Obama would bypass the Congress translates into a lack of trust not only in the Republicans (who might surprise him on this issue) but also his fellow Democrats, who might be the ones who pull the rug out from underneath yet another plan which will cost the Taxpayers one red cent.

One must applaud the President for taking a look at these two issues, which are an extreme burden on millions, however, one would like to see a general consensus, especially in an election year, from both Houses of Congress, in order to lend legitimacy to the overall projects. By taking this issue to the “people” and bypassing his Senate, the move “smacks” of campaign rhetoric – it is just a question as to whether this time, the Rhetoric will appease Obama’s Occupy groups, and appeal to the independents and other critical groups for needed for reelection. It is the power of the Executive Branch to pull and “end run” around Congress, which makes one understand why Abraham Lincoln, was noted as Obama’s favorite president – the only President that shut down the press, and suspended the Constitution in order to achieve his personal goals.

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