What’s All The Buzz About Cloud Computing? “How Cloud Computing Can Cut Your IT Costs by HALF, Provide Automatic Disaster Recovery and Free You To Work from Anywhere On ANY Device”Wednesday, December 5th @ 1:00 p.m. ET
Presented by Fernando Sosa – HaonTech.com Jennifer Glass – Credit Cards NJ
Warning!: There will be no ‘geek speak’ in this webinar. This is not a webinar for technical folks. We will explain in plain english and answer your questions without using technical jargon.
Here’s What This Free LIVE Webinar Will Teach You:
· What is “cloud computing” and why thousands of companies are abandoning their current in-house computer network for this new, lower cost, more flexible alternative.
· How cloud computing can drastically lower your IT costs and free you from frequent (and expensive) hardware and software upgrades.
· How to gain automatic backup and disaster recovery through cloud computing.
· Answers to important questions about security, where your data is stored and Internet connectivity.
· Critical facts every business must know before switching to a cloud based network.
Cops to Congress: We need logs of Americans’ text messages
State and local law enforcement groups want wireless providers to store detailed information about your SMS messages for at least two years — in case they’re needed for future criminal investigations.
by Declan McCullagh December 3, 2012 9:00 AM PS
AT&T, Verizon Wireless, Sprint, and other wireless providers would be required to record and store information about Americans’ private text messages for at least two years, according to a proposal that police have submitted to the U.S. Congress.
CNET has learned a constellation of law enforcement groups has asked the U.S. Senate to require that wireless companies retain that information, warning that the lack of a current federal requirement “can hinder law enforcement investigations.”
They want an SMS retention requirement to be “considered” during congressional discussions over updating a 1986 privacy law for the cloud computing era — a move that could complicate debate over the measure and erode support for it among civil libertarians.
As the popularity of text messages has exploded in recent years, so has their use in criminal investigations and civil lawsuits. They have been introduced as evidence in armed robbery, cocaine distribution, and wire fraud prosecutions. In one 2009 case in Michigan, wireless provider SkyTel turned over the contents of 626,638 SMS messages, a figure described by a federal judge as “staggering.”
IRS: Retirement Plans Can Make Loans, Hardship Distributions to Sandy Victims
IR-2012-93, Nov. 16, 2012
WASHINGTON — As part of the administration’s efforts to bring all available resources to bear to support state and local partners impacted by Hurricane Sandy, the Internal Revenue Service today announced that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Sandy and members of their families.
401(k) plan participants, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.
Retirement plans can provide this relief to employees and certain members of their families who live or work in the disaster area. To qualify for this relief, hardship withdrawals must be made by Feb. 1, 2013.
The IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions. As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape. In addition, the six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply.
This broad-based relief means that a retirement plan can allow a Sandy victim to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area.
Plans will be allowed to make loans or hardship distributions before the plan is formally amended to provide for such features. In addition, the plan can ignore the limits that normally apply to hardship distributions, thus allowing them, for example, to be used for food and shelter. If a plan requires certain documentation before a distribution is made, the plan can relax this requirement as described in the announcement.
Ordinarily, retirement plan loan proceeds are tax-free if they are repaid over a period of five years or less. Under current law, hardship distributions are generally taxable. Also, a 10 percent early-withdrawal tax usually applies.
Ridgewood High School moves one step closer to a Modern Learning Commons
December 4,2012
the staff of the Ridgewood blog
Ridgewood NJ , The campaign to transform the Ridgewood High School Library into a new library/media center with flexible spaces for today’s students has raised over $ 597,000 and is closing in on its goal of $850,000.
According to the Learning Commons website the current library is the most utilized room in the school, visited by more than 1,700 students each day. It is more than 48 years old and is no longer compatible with the way today’s students interact and learn. With your support, the vision of a new Learning Commons — with attractive and efficient research and study space — can become a reality for the students at Ridgewood High School.
The Learning Commons will feature:
A state-of-the-art research center
Multi-purpose space for teaching and group study
Comfortable and inviting areas for individual and quiet study
Many opportunities for creativity and collaboration
We ask the support of the entire Ridgewood community to achieve our vision. The RHS Learning Commons Committee will hold a parent meeting on Tuesday, December 11 at 7:30 p.m. to solicit feedback and share ideas about the design of the new facility. All parents and guardians in the school district are invited to attend. For more information, please e-mailLori Weil at weils5@me.com.
Our fundraising goal is $850,000! Please donate today! https://rhslearningcommons.com/
Aronsohn and Company pushes vote on ADA compliant cement ramp at Graydon Pool
December 4,2012
the staff of the Ridgewood blog
Ridgewood NJ, After almost two years, the Village Council will ignore the obvious benefits of the mobi-chair and pick a final design for an ADA-compliant cement ramp for Graydon Pool. The vote is scheduled for December 5th .
There are two noncompeting concepts for Council members to choose between that were presented by the Ridgewood engineering department. The designs have been the topics at several council sessions and special meetings, and the most recently an informal assembly hosted by Deputy Mayor Albert Pucciarelli earlier this week.
The Ridgewood News is reporting that the “Dream Team” seems to be in favor of the first Option because it is the least expensive, least obtrusive and uses the smallest amount of cement.
Councilwoman Bernadette Walsh remained concerned over this option because it leads into one of the pool’s spillways ,causing concern because the spillway area is where debris, such as tree branches and sticks, collects before it is eventually flushed from the pool.
Councilman Tom Riche told the Ridgewood News that he agreed with Walsh about the spillway, and pressed the point that the ramp would be “a slippery hazard,” Richie remained not in favor of the ramp at all and added that the proposed out-of-pocket cost to the village, which excludes Bergen County grant money, is estimated to exceed $40,000.
Critics remain concerned that the ramp like the ‘elevators to nowhere ” at the train station will be an added obstruction and safety hazard as well as not be user friendly to those who need access . Others wonder if the cement ramp will damage the historic nature and land mark status of the pool an issue that seems to have been all but ignored by the council. Others see the ramp as dangerous and wonder what will be the Villages liability if an accident happens on an ADA complaint ramp?
Graydon Pool – ADA Compliant Ramp
At this point a ramp allowing direct access into the pool is in the design phase. Below are two plans that the Council plans to review at its November 28th Meeting.
Click Here for Plans for Option 1. https://mods.ridgewoodnj.net/pdf/manager/2012OpNo11026.pdf
Following the selection of a design the Village Engineer will develop detailed plans to enable bidding the work and construction will begin in late Spring 2013.
Senator: ‘Increasingly Clear [Obama’s] Comfortable Going Off the Cliff’
4:44 PM, DEC 3, 2012 • BY DANIEL HALPER
Senator John Barrasso of Wyoming believes President Barack Obama is “comfortable going off the [fiscal] cliff.”
“I think the president is increasingly showing his hand that he is comfortable going off the cliff,” Barrasso tells THE WEEKLY STANDARD, in response to a question about President Obama’s negotiation strategy. “He’s not involving Republicans in the process. He was playing golf this weekend with Bill Clinton, Ron Kirk, and ex-DNC chair Terry McAuliffe. He’s not seeming to be one to work together. He seems to be lecturing more than listening. And I just think that it’s increasingly clear he’s comfortable going off the cliff.”
The Republican senator believes Obama’s posture is being reinforced by bad advice he’s getting from some of his fellow Democrats. “[T]hat’s what he’s being advised to do by a number of his Democratic colleagues—Howard Dean, former chairman of the DNC said they should go off the cliff, Patty Murray, who ran the senatorial committee, said they should go off the cliff,” says Barrasso in a phone interview, referring multiple times to Obama’s weekend golf outing with Democratic stalwarts.
Barrasso thinks Obama should be working on getting a deal with the Republicans in Congress instead of spending his weekend on the golf course with such partisans.
Additionally, Barrasso believes Obama’s willingness to go off the cliff relates to his view of achieving fairness through the tax code.
House GOP makes a $2.2 trillion debt counteroffer to Obama on cliff
By Russell Berman – 12/03/12 03:00 PM ET
House Republican leaders have made a counteroffer to President Obama in the fiscal cliff negotiations, proposing to cut $2.2 trillion with a combination of spending cuts, entitlement reforms and $800 billion in new tax revenue.
The leaders delivered the offer to the White House on Monday with a three-page letter signed by Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.), and four other senior Republicans, including Rep. Paul Ryan (R-Wis.), the party’s just-defeated vice presidential nominee.
Republican officials said the offer was based on a proposal outlined by Erskine Bowles, the former chief of staff to President Clinton, in testimony last year before the congressional “supercommittee” on deficit reduction. That offer is distinct from the widely-cited Simpson-Bowles deficit plan released two years ago.
The GOP offer is a response to Obama’s opening bid, which called for $1.6 trillion in tax increases and reducing the power of Congress to block an increase in the debt ceiling.
Is Censorship the Future of the Internet
December 3,2012
the staff of the Ridgewood blog
Ridgewood NJ, A closed-door meeting of the world’s governments is starting today. The future of the internet is on the agenda. Some governments want to use this meeting of the International Telecommunication Union to increase censorship and regulate the Internet.
Over 1,000 organizations from 163 countries have raised concerns about this upcoming closed-door meeting in Dubai. They are joined by hundreds of thousands of Internet users who are standing up for a free and open Internet. These people are in just about every country around the world — take a look.
Cleanup clears way for winter fun at Twinney Pond in Ridgewood
MONDAY DECEMBER 3, 2012, 11:30 AM
BY DARIUS AMOS
STAFF WRITER
THE RIDGEWOOD NEWS
There is more to Ridgewood’s community cleanups than scooping up improperly discarded waste and neatly raking fallen leaves. For volunteers Ellie Gruber and George Becker, a little ingenuity is also required.
The two residents constructed a makeshift bridge leading out to the center of Twinney Pond Park in an effort to reach their treasures, which, in the case two Saturdays ago, were fallen tree limbs that had become fixed in the middle of the muck. The bridge was crafted out of previously trashed wooden planks found on site earlier in the day.
The lengths in which they traveled, literally and figuratively, to clear the mud-filled pond typified the spirit of the dozen or so volunteers and Girl Scouts who assembled for the annual cleanup of one of the village’s hidden gems.
Twinney Park, which is tucked away at the end of the Red Birch Court cul-de-sac, is highlighted by the expansive kettle pond – a natural pool that fills only after rain and when snow melts. A woodchip-laden trail with benches circles the shallow pond.
Though considered a municipal park, residents often handle Twinney’s maintenance. The cleanup two weeks ago was the yearly preparation for the cold-weather months, when the pond freezes and is used by area residents for ice skating.
“We have the Girls Scouts and so many members of Ridgewood Wildscape Association helping out. They help clean the park every year because so many kids come here and skate when it’s frozen,” said Bernadette Walsh, a Ridgewood council member, Girl Scout leader and Red Birch Court resident.
School Choice: Securing a Better Future for Our Country
by Andrew Campanella
It’s time to take the fight for school choice in America to a new level. To ensure that millions of additional children have access to the best schools possible, we must — must — reach tens of millions of additional Americans and galvanize their support for educational equality.
With one American child dropping out of school every 26 seconds, we cannot wait. Our country faces an education crisis, and it’s up to us to let our friends and neighbors know — en masse — that school choice CAN provide an essential and beneficial solution for families across the country.
To help make this vision a reality, National School Choice Week will host the first-ever nationwide, whistle-stop train tour in support of school choice.
The goal of this tour — along with the record-breaking 3,000 events being independently planned for National School Choice Week 2013 — is to demonstrate overwhelming support, and demand, for school choice…while shining a positive spotlight on the hundreds of organizations, thousands of schools, and millions of Americans working every day to increase access to great schools in our country.
The National School Choice Week Special — a historic railcar — will depart Los Angeles Union Station on January 25, 2013 and arrive in New York on February 2, 2013. Parents, students, community leaders, education organizations and elected officials of both parties will host 14 very special events along the tour’s route.
The Special will link the modern-day fight for educational equality to important movements that have shaped the American way of life — from suffrage to civil rights — all of which used similar whistle-stop tours to generate overwhelming support for causes that changed our history for the better.
With bold strokes, our generation can — and will — make its mark on the tapestry of our national experience. Social change isn’t just something we read about in history books. It’s something we can make a reality, and in the process, secure for ourselves not only a place in history books yet unwritten, but secure for our country a brighter and more prosperous futurewhere no child is denied the opportunity to attend the best schools possible.
SUNDAY DECEMBER 2, 2012, 11:44 PM
BY LESLIE BRODY
STAFF WRITER
THE RECORD
Spend a while at Pascack Hills High School in Montvale, one of the first in New Jersey to hand every student a laptop, and you’ll likely hear a teacher tell students to “forty-five it.”
That means closing laptops halfway during a lesson — to a 45-degree angle — so they aren’t tempted to surf the Internet, check email or shop for shoes. It’s one of many techniques savvy teachers are adopting to keep the attention of a generation easily sidetracked by an unprecedented bounty of technology.
As a growing number of schools let iPads, laptops and cellphones enter the classroom, some teachers say they’re shouldering a new role as electronics police. Teachers warn constantly that abused devices will be confiscated. Some continually roam behind the back row to see who is watching what. And in a step that smacks of Big Brother, some have programs that monitor all their students’ screens at the same time, and shut off the computer of anyone goofing off.
Ridgewood Art Institute sharing sale proceeds with neighbors in need
SUNDAY DECEMBER 2, 2012, 7:31 PM
BY LINDA MOSS
STAFF WRITER
THE RECORD
RIDGEWOOD — Deborah Hammond usually patronizes the Ridgewood Art Institute’s Annual Holiday Art Show and Sale. And by purchasing two small paintings Sunday, the village resident was doing good for two non-profits this year, the institute as well as the local Community Meals Inc. program.
For the first time ever, part of the proceeds of the art sale, which began Nov. 18 and ends Dec. 19, are going to Community Meals, a non-profit that supplies food to clients in Ridgewood, Allendale, Glen Rock, Ho-Ho-Kus, Midland Park, Waldwick and Saddle River. The institute gets a 20 percent commission on the sale of any painting, which it is splitting with Community Meals, Art Institute President Robert Lampert said.
Few Places to Hide as Taxes Trend Higher Worldwide
By CONRAD DE AENLLE
Published: December 2, 2012
Death and taxes are the only certainties in life, if you believe Benjamin Franklin. Had he been around today, he might have observed that taxes also have become a great uncertainty in life.
Taxes on earnings, investment income, sales and a few other things have gone up already in many countries, and further increases are possible, including a huge one in the United States.
Another source of unease and doubt for taxpayers is a trend toward increases of other sorts: in scrutiny by revenue authorities, reporting requirements for individuals and businesses, and legislation to close tax code loopholes.
International taxpayers — expatriates and others whose personal or professional lives extend across borders — may find conditions particularly challenging. Dealing with a changing tax regime is tough; dealing with more than one even more so. Not only that, but some authorities are focusing more keenly on foreigners or on their own citizens living elsewhere. On the bright side, certain countries still treat foreigners better than their own citizens.
It’s probably better to talk: How checking our phones 60 times a day is driving away friends
Mobile phones are eroding our personal relationships, according to a new study
Scientists have compared constantly texting and checking phones to addictions like compulsive spending
By KERRY MCDERMOTT
PUBLISHED: 05:33 EST, 1 December 2012 | UPDATED: 05:33 EST, 1 December 2012
Compulsive: Constant texting is an addiction, experts say
Young people’s attachment to their mobile phones is eroding their personal relationships, according to a new study.
The claims come after research revealed that young adults – in addition to sending over 100 texts – check their mobile up to 60 times a day.
Experts behind a new study have now said compulsively checking a mobile phone is an addiction similar to compulsive spending or credit card misuse.
They said their research showed mobile and instant messaging addictions are driven by materialism and impulsiveness – which also plays a role in behavioural and substance addictions.
Dr James Roberts, of the Baylor’s Hankamer School of Business, said it was important for students – who spend up to seven hours a day interacting with communication technology – to recognise when their behaviour is becoming a problem.
Six Bipartisan Entitlement Reforms to Solve the Real Fiscal Crisis: Only Presidential Leadership Is Needed
By J.D. Foster, Ph.D. and Alison Acosta Fraser
November 30, 2012
Abstract: The United States faces a real fiscal crisis, and the impending fiscal cliff of massive tax hikes and spending cuts in January is only the first act. In early 2013, the federal government will exhaust its ability to issue debt legally. Yet as large and as major a concern as federal budget deficits are today, they are of secondary consequence compared with the fiscal quagmire of unaffordable entitlement spending in the next decade. Fortunately, the entitlement problem can be resolved by six simple reforms to improve the fiscal future for Social Security and Medicare. But to implement these reforms, President Barack Obama must lead.
A high-stakes fiscal policy debate of unique size and import has just begun. Absent congressional action to the contrary, a massive slate of tax hikes and spending cuts will take effect on January 1, and that is only the first act. The second act will occur early in 2013 when the federal government will exhaust its ability to issue debt legally. Both acts need prompt solutions.
Speaker of the House John Boehner (R–OH) made the first move. After congratulating President Barack Obama upon his reelection, Boehner promised a willingness to work with him, giving Obama the additional revenues he desired through pro-growth tax reform accompanied by reforms in entitlement programs.[1] President Obama’s counter, while unsurprising, was unhelpful because he focused exclusively on fiscally meaningless and economically harmful tax hikes on upper-income taxpayers. The President repeatedly has argued for a balanced approach, but he has yet to offer a single meaningful proposal on spending reductions.
While the President prepares to start his second term, he should set about negotiating in good faith with Republicans, especially in the House where Republicans were returned to office in the majority with expectations of cutting spending without increasing taxes. The voters, we are told, expect it. This means the President cannot sit back and just harp on revenues. He needs to address spending and in particular entitlements.
Fortunately, the President has occasion and opportunity to lead by proposing some simple yet transformational reforms in two of the prime sources of the nation’s fiscal problems: Social Security and Medicare. Better yet, many such reforms have already been thoroughly considered and enjoy broad bipartisan support, lacking only the moment and the leadership to become a reality. These proposals will not resolve either program’s key structural flaws—they constitute a start of the reform journey, not the conclusion—but they would be a powerful start that would markedly alter the nation’s fiscal trajectory.
At the start of a President’s second term, the political stars are in the best possible alignment for solving big problems. All the President needs to do is seize the moment. This is the moment; President Obama must lead.
Fiscal Cliff: By Design, Not by Chance
Many events arrive by chance, but the present fiscal spectacle is not one of them. The fiscal cliff results from explicit actions by Congress and the President to push difficult fiscal policy issues past the recent election. In this, they succeeded, although it took a series of legislative acts to accomplish it. With regard to taxes:
The payroll tax cut, extended in the spring of 2012, will expire on December 31, 2012.
The extension of the Bush tax cuts, signed into law in December 2010, will expire at the end of the year.
This same law also established a new structure for the death tax with a 35 percent rate and a $5 million exemption per spouse, which will expire at the end of the year.
Various Obamacare tax hikes begin at the start of 2013.[2]
The same pattern holds for the spending cuts. For example, the sequester slated to gouge defense spending while making modest cuts—such as a 2 percent across-the-board cut to Medicare providers—reflects the final leavings of the earlier Budget Control Act, which created the failed “supercommittee.” Early in 2012, Congress also prevented deep and disastrous reductions in Medicare provider payments, but this “doc fix” remedy expires at the end of the year.
In May 2011, the federal government exhausted its legal authority to finance deficit spending by issuing debt. The U.S. Department of the Treasury exercised its typical but limited authorities for temporarily creating more room under the “debt limit,” allowing policymakers to postpone action until early August. A brutal and economically risky political battle ensued, eventually resulting in legislation that raised the debt limit by $2.1 trillion, sufficient to fund the federal government past the November election.
Projections now suggest that the government will reach the debt limit late in 2012, after which the Treasury will again deploy its limited authorities. This will trigger what could be another difficult negotiation for Congress and President Obama—a negotiation that will be heavily influenced by what happens with the fiscal cliff.
No Time for Distractions
President Obama clearly believes in raising taxes on upper-income taxpayers, and he is willing to weaken the economy, slow job growth, and constrain wage growth to do so. It is difficult to fathom his acceptance of this trade-off of economic security for an ideological doctrine of social justice, especially considering that this long-standing debate likely will rage indefinitely. However, these tax hikes are a distant sideshow in the present context, a political distraction that diverts attention from the central fiscal issue of runaway spending, which gives rise to persistent and economically dangerous deficits.
In his own budget, the President proposed to extend the Bush tax cuts except for those making $250,000 or more, raising $836 billion over the next 10 years. His companion proposal to limit the value of deductions for upper-income taxpayers would raise another $574 billion, for a total of $1.4 trillion. In absolute terms, that is a lot of revenue. However, even allowing for all the other budget gimmicks and tax hikes in Obama’s budget, the federal debt would rise by $7.7 trillion over the next 10 years including these tax hikes and by $9.1 trillion without them.
Obama’s tax hikes would reduce the rise in federal debt over the next 10 years by about 15 percent. The President is silent about the remaining 85 percent. The numbers confirm that President Obama’s tax hike demands are at best tangential to attaining a balanced budget.
Fiscal Cliff Today, Entitlement Crisis Tomorrow
As large and as major a concern as federal budget deficits are today, they are nevertheless secondary in consequence to the fiscal quagmire of unaffordable entitlements. Social Security and Medicare in particular share certain vital characteristics. Both programs are extraordinarily complicated, having been built up in complexity over the years one Congress at a time. Similarly, each program badly needs programmatic reforms. For example, the minimum benefit in Social Security is woefully inadequate to protect low-income seniors from poverty, and Medicare still lacks a catastrophic benefit. These are only some of the many shortcomings that must be addressed in fundamental overhauls of each program.
Of most immediate concern, however, is that Social Security and Medicare are unaffordable in their current forms. When this year’s kindergarteners enter college, just 13 years away, spending on these two programs plus Medicaid and interest on the debt will devour all tax revenue. (See Chart 1.)
Social Security will lack the funds to pay full benefits beginning as early as 2033.[3] Medicare’s unfunded promises in current dollars reach into the many tens of trillions of dollars. These facts are not in dispute. Solutions to our fiscal challenges are needed, urgent, and inevitable.
Carpe Diem, Mr. President
The fiscal cliff and the debt limit have set the stage, but there is also the reality of the rhythms in the American political system. There are certain windows in every four-year or eight-year cycle when bold leaders can achieve bold things. The first few months of a reelected President’s second term is one such window, but it closes fast, and lame-duck status arrives quickly.
Thus, the President must adopt the mantle of leadership, rather than brinksmanship, to steer the nation away from the fiscal cliff and all that is set to follow, and he must start with spending. However, the critical silver lining is that simple, commonsense, and thoroughly vetted solutions such as the four listed below constitute a strong start on the journey to more complete programmatic reforms remedying acknowledged flaws in these programs, and they already enjoy broad support across the political spectrum.
Raise the Social Security eligibility age to match increases in longevity. Originally set at 65, the normal eligibility age is rising two months every year until 2022, when it will reach 67. According to the Social Security actuaries, continuing to increase the eligibility age to 69 by the year 2034 and allowing it to rise more slowly thereafter to reflect gains in longevity could go a long way toward reducing Social Security’s funding shortfall.[4] While this would not reduce today’s budget deficit, it would strengthen Social Security’s finances and dissipate far more important long-term budget pressures.
Correct the cost-of-living adjustment (COLA). The annual COLA benefit adjustment is determined today by the Bureau of Labor Statistics’ Consumer Price Index (CPI). However, the CPI, an antiquated measure, generally overstates inflation, meaning that benefits are increased a bit too much each year to offset inflation. The effect on benefits in a given year of switching to a more accurate inflation measure is minute, but Social Security spans generations.[5] Again, according to the Social Security actuaries, using a more modern inflation measure would substantially reduce Social Security’s shortfall over time.
Raise the Medicare eligibility age to agree with Social Security. Medicare has an eligibility age problem, but unlike Social Security, the Medicare eligibility age remains stuck at 65. An obvious solution is to wait five years and then slowly raise the eligibility age to align eventually with the Social Security eligibility age. While the short-term budgetary savings would be negligible, the long-term savings in Medicare would be profound.
Reduce the Medicare subsidy for upper-income beneficiaries. In 2012, the average Medicare beneficiary received a subsidy of about $5,000. The subsidy is the per capita amount of Treasury revenue that is used to fill the financial hole arising each year because Medicare’s premiums are inadequate, in conjunction with its other revenue sources, to cover Medicare’s total costs. Subsidizing Medicare benefits for low-income seniors—and perhaps for some middle-income seniors—makes sense, but upper-income seniors do not need and should not receive a $5,000 subsidy to buy Medicare health insurance. The Medicare subsidy was first cut for the wealthiest seniors in legislation signed by President George W. Bush in 2004 by income-relating premiums so that higher-income beneficiaries pay a higher share of their Medicare cost. It was cut further in Obamacare, and President Obama proposed to pare it back still further in his budget proposals of February 2012 with still-higher premiums for upper-income beneficiaries.
Medicare has many programmatic problems that demand attention, and the sooner the better, but the immediate fiscal problem is straightforward: It is the subsidy. The total cost of the Medicare subsidy—about $230 billion in 2012—will soar over time as health care costs rise and the baby boomers retire.[6] Paring back the subsidy for well-to-do retirees is an obvious step toward reducing the budget deficit today and shoring up Medicare for the long run.
Bolder Proposals
The four foregoing proposals for Social Security and Medicare meet the test of simplicity, being relatively easy to communicate to the American people, having been thoroughly vetted, and enjoying widespread support. Together, they would dramatically improve America’s fiscal future for the better. Two additional proposals, one each for Social Security and Medicare, meet the tests of simplicity and effectiveness but have not been considered as intensively. Yet they should also garner bipartisan support and consideration.
Phase out Social Security benefits for upper-income retirees. Everyone who has ever paid into Social Security is entitled to the benefits prescribed by law. However, as a nation, we need to ask whether today’s working families should pay payroll taxes so that upper-income retirees can continue to receive their checks. We need to ask why phasing out the Medicare subsidy to upper-income seniors while continuing to send them their full Social Security check would make sense. In short, Social Security should be social insurance against poverty rather than a government-run pension scheme.
Some might charge that this is redistributionism, but would anyone suggest that millionaires should receive food stamps? Food stamps and other welfare programs are specifically intended to operate as part of the social safety net, yet their existence constitutes a form of redistributionism that most Americans accept. Social Security (and Medicare) should become real insurance against poverty, meaning that only those seniors who need help should receive help. On the other hand, if Social Security remains a universal government-run pension, then it remains a vastly larger program built on an entirely different redistributionist principle: redistribution from workers to retirees, including the wealthy.
Consolidate Medicare’s elements and collect a single higher premium. Medicare is actually three distinct components, referred to generally as Parts A, B, and D, reflecting the fact that Medicare was built up over many years. This antiquated structure is confusing and inefficient. An obvious reform is to consolidate the three distinct parts into a unified Medicare program.
Medicare Parts B and D each require beneficiaries to pay a premium covering 25 percent of the cost of the programs. As the Medicare Parts are consolidated, the premium should be consolidated as well and then raised to 35 percent of the relevant costs.[7]
Conclusion
The nation’s fiscal problems, today and beyond, derive entirely from excess spending, especially entitlement spending, not a dearth of revenue. While current revenues are exceptionally low as a share of the economy, this is due almost entirely to the weak economy. As analysis by the Administration’s budget office and the Congressional Budget Office affirm, revenues will return to a more normal 18.5 percent of the economy as the economy recovers. Given these facts, President Obama’s insistence on an economically harmful tax hike for what is essentially a fiscally meaningless increase in revenues will not help policymakers navigate successfully around the fiscal cliff.
A hopeful sign, however, is that the political timing is propitious, and important policy reforms in Social Security and Medicare are simple, straightforward, and well known. These proposals, while not correcting more fundamental programmatic flaws, would materially correct the spending excesses in these programs. Better yet, these proposals are not partisan in nature, but have been supported on a bipartisan basis in the past.
All that is lacking to avoid the fiscal cliff, profoundly stabilize the nation’s public finances, and shore up these critical entitlement programs is for the President to take the lead. The nation waits.
—J. D. Foster, Ph.D., is Norman B. Ture Senior Fellow in the Economics of Fiscal Policy in and Alison Acosta Fraser is Director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
