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Old 10-18-2008, 09:06 AM   #41
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With all due respect (really), I still don't see where you're answering the "immunity" question. ....

Perhaps 'cause we have the guns & internment camps & we take care of our own ?
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Old 10-18-2008, 09:15 AM   #42
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So you are of the bent that it is OK to substitute dog food for steak, because after all that's what people do when meat protein increases in price.

Life is not fair! Your mega corp canceled your pension. As Texarkandy said, therefore every bodies pensions should be canceled, or 'the government should make mine good'

Here is the classic example of wanting the Government to take care of us. Companies offer benefit packages to attract workers. How do workers insure these companies will keep their promises. Well, while I am not particularly in love with Unions, that's one way. The other is workers leave and work for a company they think will.

If I were you I would think long and hard before I ask the Government to delve deeper into my life.
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Old 10-18-2008, 09:17 AM   #43
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I never said it was "OK" for MegaCorp employees to have their promises taken away. Are you suggesting that it's "OK".
The elimination of MegaCorp pensions and health care are a reality, so the question of OK is immaterial now. And I am not even suggesting that SS benefits or Fed Emp pensions and health care we eliminated as they have been in the private sector. What I questioned was COLA increases, especially now, when the private sector has had no such thing for decades.

But we're going in circles as your subsequent post shows, so we'll have to agree to disagree...
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Old 10-18-2008, 09:28 AM   #44
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Perhaps I was off on a rant misconstruing what you are saying.

Are you talking about the annual pay increase for active federal employees & active military that congress & the pres have a big pretend argument every year over how much it should be? Those are not COLA's btw & there is no implicit contact/promise from the govt to the employees as to those - & they have been canceled before in years past. (I'm not voting for it! But I could understand it. That's just my personal pocketbook talking.)

(Actually, there is legislation, passed in the early '80's I think, that specified a formula by which the annual fed & mil pay increase is to be set, however the statute has a loophole allowing the President to waive the formula for emergency economic reasons and every Pres has done so every year since the law was passed!)

I believe SS/Fed Pension COLA calculations are set by statute, however. You'd need legislation & those are a different matter IMHO.

So, what would be the vast economic benefit to the country of cutting COLA's to federal govt & military retirees? Have you any numbers on how much military & fed retiree pension COLA's are dragging our economy down? Or is it more of a "feel-good" suggestion.
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Old 10-18-2008, 09:29 AM   #45
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Here you go
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So you are of the bent that it is OK to substitute dog food for steak, because after all that's what people do when meat protein increases in price. That's a fair criticism re: substitition. But should COLA increase to provide 40" LCD/plasma TV's now instead of 19" CRT TV's? Should COLA increase to provide cell phone contracts instead of (cheaper) landlines? Should COLA increase to provide the far superior technology and safety features of a 2008 Chevrolet Impala vs a 1970 model? Should COLA increase to provide for a PC and internet subscription that no one had in 1970? Should COLA increase to allow the average homeowner to have a 2349 sqft home (2004) vs a 1500 sqft home (1970)? I could go on and on. I think CPI-U should reflect increases due to cost, but not for all leaps in technology. If your TV is going to cost 5 times what you last one cost, you should have to cut expenses somewhere.

Life is not fair! Your mega corp canceled your pension. As Texarkandy said, therefore every bodies pensions should be canceled, or 'the government should make mine good' My point was just the opposite. I never said it wasn't fair that MegaCorp cancelled my pension. I never said Fed Emp should lose their pension or health care which would be the equivalent. What I did say was having their benefits preserved AND receiving COLA adjustments well above the private sector was something that did not see fair.

Here is the classic example of wanting the Government to take care of us. Companies offer benefit packages to attract workers. How do workers insure these companies will keep their promises. Well, while I am not particularly in love with Unions, that's one way. The other is workers leave and work for a company they think will.

If I were you I would think long and hard before I ask the Government to delve deeper into my life.
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Old 10-18-2008, 09:33 AM   #46
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Perhaps I was off on a rant misconstruing what you are saying.

Are you talking about the annual pay increase for active federal employees & active military that congress & the pres have a big pretend argument every year over how much it should be? Those are not COLA's btw & there is no implicit contact/promise from the govt to the employees as to those - & they have been canceled before in years past. (I'm not voting for it! But I could understand it. That's just my personal pocketbook talking.)

I believe SS/Fed Pension COLA calculations are set by statute, however. You'd need legislation & those are a different matter IMHO.

So, what would be the vast economic benefit to the country of cutting COLA's to federal govt & military retirees? Have you any numbers on how much this is dragging our economy down?
In hindsight, I've caught myself on rants before if that makes you feel any better. Instead of repeating myself, see post #1, #2 & #28. And no I don't have numbers, but conceptually why shouldn't we all share the burden (ie, on average the private sector will get nowhere near 5.8% and many will be unemployed - why is one group immune)?
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Old 10-18-2008, 09:42 AM   #47
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Gee, I do not know what the average SS benefit is but I think it is well below $1,000 a month. If it is, 5.8% is less than $58 a month (or less than $696 a year). That amount will not even pay most peoples heating bill for the winter. Funny, there was a lot less complaining last year when I think the increase was about 2.3%.
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Old 10-18-2008, 09:45 AM   #48
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..... (ie, on average the private sector will get nowhere near 5.8% and many will be unemployed - why is one group immune)?
Once again - are you referring to active military/civil service or retired? Two different systems.

The 5.8% applies to Military retires & civil service CSRS retirees ( CSRS = those who began federal civil service employment prior to 1/1/1984)

FERS retirees (post 1984 civil service) get 4.8%.

For active military/civilian employees congress/Pres this year passed a 3.9% average pay increase (not a COLA) some will get more, some will get less depending on what "locality" one lives in. Mine will likely be 2.9.

Remember too, there have been good times when some folks in the private sector in certain occupations got whopping annual pay increases while civil service go their usual 2 to 3% regardless of the demand for their particular occupation. What kept them from jumping ship? Perhaps the security & retirement plan?

Private Sector & Govt employment are apples & oranges though.
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Old 10-18-2008, 10:04 AM   #49
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I'm at least partially with MidPack on this one. I'll stick to SS, since federal pensions seem somewhat different.

Social Security is an income transfer program in which current workers help support prior workers. If the economy isn't doing well and wages aren't keeping up with the CPI, then it's easy to see that workers wouldn't want to take increasing shares of their incomes in order to maintain CPI increases for retirees.

I know that retirees (I'm getting close to collecting SS) will say "but the government promised me ___ ". I'd say that the people who are working today weren't even voters when "the government" made that "promise".

I think retirees do have some arguments for getting some support:
1) I took care of my children (and their peers) when they were too young to take care of themselves, now it's okay for them to take care of me.
2) I paid taxes to take care of my parent's generation when I was working, it seems reasonable that my children's generation will pay taxes to take care of me.
3) I helped build the productivity tools that todays workers use. I should get some share of the production.

So I don't have a problem with SS in general. But none of these arguments suggest that workers ought to provide a better deal for retirees than the workers are getting themselves.

BTW, there is currently a legal limit on how far SS will go with COLA adjustments:

Quote:
Possible limitation on the COLA
Legislation enacted in 1983 may limit the COLA if the combined assets of the Social Security trust funds are below 20 percent of annual expenditures. (This limitation only applies to Social Security; SSI would be unaffected.) Such limitation has not occurred in the past, nor does it affect the current COLA determination. The combined trust fund assets at the beginning of 2008 are estimated to be 359.0 percent of 2008 expenditures.
Latest Cost-of-Living Adjustment
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Old 10-18-2008, 10:18 AM   #50
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Lets see 35 years of paying into SS and MC for most and now retired they also pay, at the lowest level, $96.40 a month for MC Part B. Additionally, approaching a majority of recipients, pay Income Taxes on up to 85% of the benefits and whatever marginal rate is applicable.

With moderate other income (interest/dividends/whatever), whatever the benefit you get, about 25% GOES BACK to the Government in some form of taxes - Maybe to still help pay for those coming after?
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Old 10-18-2008, 10:21 AM   #51
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So I don't have a problem with SS in general. But none of these arguments suggest that workers ought to provide a better deal for retirees than the workers are getting themselves.
Summarizes my view better than I did...
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Old 10-18-2008, 10:29 AM   #52
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So I don't have a problem with SS in general. But none of these arguments suggest that workers ought to provide a better deal for retirees than the workers are getting themselves.
Au Contraire - today's workers do get the same deal - a COLA based upon CPI when they start drawing Social Security.

If they change the "deal" then they are changing it for their future selves as well. (for some of us that future is nearer & for some further away)

If you are talking solely about SS - that's akin to asking employees of a company to vote to reduce their future pension benefit, company 401k match, or whatever it is they have for the good of the company as a whole. I think many employees would rather see company management quit overpaying for raw materials, cut unproductive/unnecessary company divisions, consolidate functions, get more efficient, & quit taking management quail hunting and health spa retreats, and other things first.
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Old 10-18-2008, 12:03 PM   #53
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I don't know how they compute the COLA on SS but retirees should have a different basket of goods and services than working people.

A retired person usually isn't buying a first home, paying daycare, buying new cars or going to college. They feel the effect of food prices and medical care prices more and gas prices less. So the cost of living in a paid off home, heat, lights, food, car repairs and insurance should be weighted more heavily than the price of houses and daycare.
My mom has been retired 20 years and lived in a paid off home for 30 years. Her cost of living is about $500 a month for utilities and property taxes and $800 a month for food, gambling, gifts, decorating, gas, car repairs. Until a year or so ago she was budgeting $400 for spending and gambling but doubled it so she could gamble more. Now she has pretty much stopped gambling and still is using up her $800.
She is selling her house now so will pay rent but have the income from carrying the contract on the house of 1,250 a month. She isn't involved in selling the house or how much rent she will pay but my brother is taking care of it and told me the contract on the house but not what her rent will be. She will be living in his house so he will provide all the food.
For a poor elderly person food and medical cost is much more important than the price of houses.
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Old 10-18-2008, 12:24 PM   #54
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I do not believe the cost of houses is in the CPI calculation while rental costs are.
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Old 10-18-2008, 12:48 PM   #55
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I don't know how they compute the COLA on SS but retirees should have a different basket of goods and services than working people.
....
I've done just a small amount of research on this myself in the past year and found that this subject of "which basket of goods provides the most appropriate measurement" is by no means a new idea/argument and has been continually studied and argued over by the government and private sector groups for many years.

For example: http://www.urban.org/publications/309221.html
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Old 10-18-2008, 06:12 PM   #56
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very interesting post. i learned a lot about the perceptions of retired military/federal and active duty/still employed federal employees.

some background...in my household, the following benefits apply:
late husband - 4 yrs Navy, civil servant for 24 yrs, CSRS system.
myself - recipient of his survivor benefits, pension and self paid health benefits.
myself - eligible for a deferred FERS pension from MY career was 18 yrs as a civil servant.
DH2B - retired military with moderate pension but excellent health benefits. currently in civil service, FERS system.

so between all of us, the men served our country in uniform, and we all serve(d) our country as civil servants at lower pay but the guaranteed retirement BENEFITS made up for the salary difference. and our country will serve folks like us back in retirement.

remember Uncle Sam is a not-for-profit, unlike private sector which is "for profit". the taxpayer will never tolerate civil servants being given huge annual bonuses nor stock options nor incentive pay nor corporate perks nor profit sharing nor...did i miss anything?

i worked in private sector for 8 years. the biggest reason i switched over to civil service was....drum roll.....the BENEFITS, which are regulated by PUBLIC LAW passed by Congress. Congress will never change the those laws, cuz it needs to attract people to be civil servants due to the lower pay. we literally run the country.

and of course the military defend our country. and the law enforcement folks uphold our laws and maintain law and order. 24/7.
did you know a lot of civil service categories are on 24/7 recall status for national and local emergencies?

Private sector retirement benefits and compensations are not governed by public law, and never have been. you don't want to go there.

hence the difference in pensions...did that help?
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Old 10-18-2008, 07:31 PM   #57
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I don't know how they compute the COLA on SS but retirees should have a different basket of goods and services than working people.

A retired person usually isn't buying a first home, paying daycare, buying new cars or going to college. They feel the effect of food prices and medical care prices more and gas prices less. So the cost of living in a paid off home, heat, lights, food, car repairs and insurance should be weighted more heavily than the price of houses and daycare.
My mom has been retired 20 years and lived in a paid off home for 30 years. Her cost of living is about $500 a month for utilities and property taxes and $800 a month for food, gambling, gifts, decorating, gas, car repairs. Until a year or so ago she was budgeting $400 for spending and gambling but doubled it so she could gamble more. Now she has pretty much stopped gambling and still is using up her $800.
She is selling her house now so will pay rent but have the income from carrying the contract on the house of 1,250 a month. She isn't involved in selling the house or how much rent she will pay but my brother is taking care of it and told me the contract on the house but not what her rent will be. She will be living in his house so he will provide all the food.
For a poor elderly person food and medical cost is much more important than the price of houses.
The BLS has been experimenting with special version of the CPI for "elderly" people. Over the last 25 years, their CPI-E has averaged 3.3%, as compared to 3.0% for the CPI-W that is currently used.

I've never looked at the details, but I think the CPI-E uses the same price database, but uses different weights.

Here's one of their papers: http://www.bls.gov/opub/mlr/2008/04/art2full.pdf
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Old 10-18-2008, 07:42 PM   #58
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Au Contraire - today's workers do get the same deal - a COLA based upon CPI when they start drawing Social Security.

If they change the "deal" then they are changing it for their future selves as well. (for some of us that future is nearer & for some further away)

If you are talking solely about SS - that's akin to asking employees of a company to vote to reduce their future pension benefit, company 401k match, or whatever it is they have for the good of the company as a whole. I think many employees would rather see company management quit overpaying for raw materials, cut unproductive/unnecessary company divisions, consolidate functions, get more efficient, & quit taking management quail hunting and health spa retreats, and other things first.
Sure, under current law both current and future retirees get benefits indexed to the CPI. I think we're talking about changing the law.

IIRC, back in the '80s when they were designing the indexing, some people thought we should index to the lesser of the CPI and a wage index. I think one of the difficulties was the possibility of being whipsawed. It seems like we would want some sort of catch-up provision, and that's kind of complicated to write. No point to try to make that work when everyone could look at history and see that wage growth had outrun prices ever since WWII.

I think you're saying we shouldn't cut SS benefits when we're wasting money on other things. I can't disagree with the wasting part, but the General Fund is in such bad shape that it would take very big cuts just to get it to live within its means. I tend to think that SS should be a self-funding program over the long run, so I'm less concerned about the rest of the budget. I do know that the SS retirement program has very low admin expenses - far less than one year's COLA.
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Old 10-18-2008, 11:05 PM   #59
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Sounds a lot like sour grapes from those who could have worked for the federal government or the military but decided to opt for the higher salaries in private industry. Unless my math is off, midpack has worked 31 years in private industry. Somewhere in the middle of his career his company, as did many others, changed the benefit package. I know folks in the private sector who have sat in the same office for 30 years and worked for 5 or 6 different companies. Each with a different benefit package. They could have left, but decided to stay - it couldn't have been that bad.

I'm curious - why did you (midpack) stay with this company after getting shafted on benefits? Any reason you didn't have a military or civil service career? It was your choice and now you have to live with it.

I also have to agree with the poster who said that most SS benefits are fairly low - that's a fact. And the average civil service and military pension is not that high either. Better than nothing, but, except for the highest levels of employee, not a lot. 5.8% of not a lot, is still not a lot - and this is the highest raise in 26 years - not a real lot of money in between.
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Old 10-19-2008, 07:24 AM   #60
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Perhaps off-topic a bit but I've been thinking about how wage inflation used to outpace price inflation. Starting SS benefits using wage inflation gave the retiree a start tied to their ending life-style rather than their beginning life-style.

I wonder how long the cumulative CPI will outpace wage increases and if the Pozen plan will really give a higher starting benefit to a slice of future retirees who are currently young. The implications are really frightening. It would mean that many young people start their careers at their maximum earnings and then fall further behind with time. Their life-style would degrade. Am I missing something here?
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