CONCLUSION:

 Wage earners, despite all that’s reported regarding “the rich pay all the income tax”, supply most of the fungible revenues (FICA, income tax, excise taxes, Medicare, etc.) that the Federal government collects each year.  In fact, individually, most wage earners pay a greater percentage of their gross compensation to the Federal government than the percentage paid by the wealthiest Americans.  To illustrate: Disregarding the FICA holiday last year, the Federal government would have collected 18% of a single person’s annual gross compensation of $17,219 ($7.69 per hour) (14.214% for FICA and Medicare and 3.79% Income Tax) and 18% from a family of three with two working spouses with annual gross compensation of $51,790 (perhaps $15 per hour for one and $8.13 for the other) (14.214% for FICA and Medicare and 3.79% Income Tax)[1].  It was widely reported that a billionaire paid the same 18% (roughly .02% for FICA and Medicare and 17.98% Income Tax) of his income.  Notwithstanding that our tax system is purported to be progressive; any single wage earner with annual compensation of more than $17,219 and less than $106,800 and any family of three with two wages earners with joint compensation more than $51,790 and less than $213,600 probably would have paid a greater percentage of their gross compensation to the Federal government than the percentage paid on income by the average billionaire.

 Unlike other Federal entitlement programs, the vast majority of recipients of Social Security have essentially funded their retirement programs.  Their contributions together with the employer contributions made on their behalf would have, given the investment and reinvestment opportunities in open market U.S. Treasury Bonds in past years, accumulated a retirement nest egg that would have afforded them a comparable payout to that presently offered by the Program as well as a sizeable premature death benefit (the current Program’s death benefit is a mere $255) if their FICA contributions and the matching employer contributions that were part of the employee’s compensation had been actually deposited to their accounts for investment and not been paid out to former retirees and borrowed and used to pay other Federal expenses.  Those who suggest that Social Security be “fixed” by reducing benefits either by reducing payouts to beneficiaries or extending the retirement age are either remiss for not conceptually considering the actual funding operation of the Program or, at best, lacking a sense of fair play.  Please refer to Exhibit A for an example of an individual’s Social Security contribution record.  It illustrates that, using the actual yields available on 10 year U.S. Treasury Notes in past years, a typical worker would have easily funded his/her "retirement" account and accumulated a sizable death benefit.  Any "reforming" of Social Security should be done after changes, preferably the proposed Six Steps, in the funding of the Program are implemented.  At that time Americans would not be "fully funding" their accounts and gradual modifications to the Program could be resectfully made.

 Although many champion simplifying our income tax system, the suggestion is simply unrealistic at this time.  The “tax industry" in the United States provides more well paid employment opportunities than most activities that come to mind.  However, enacting the six steps of this proposal is not only realistic but politically possible because of the absence of vested interests.  The straight forward purpose and operation of the Program make it unique from other Federal programs.  Other Federal programs are susceptible to the human propensity whereby the beneficiaries (professionals, institutions, the insured, the poor, educators, students, etc.) take full advantage of the Government’s largesse and the human propensity of the program administrators to expand their operations thereby fostering unrestrained growth.

 Social Security, as the name implies, provides social benefits to American society as a whole.  It must, as it has since its inception, be sustained with contributions collected each year to pay the benefits coming due that same year and it is idealistic or intellectually dishonest to believe that the Program can be recast in a dramatically different format.  Its design and operation since its inception, however, have made the Program benefits real individual entitlements in a non-pejorative sense in that the enrollees have paid their own way during their working lifetime.

 Lack of employment opportunities (in part for reasons discussed in this proposal) and reduced earning power in an “employer’s” market because so many are desperate for work tell us that we have a group, the wage earners, which, for the sake of our economy, simply cannot continue to be the sole support of our Social Security Program.  Absent a change in the funding of the Program the FICA rate could increase to 16.49% (12.4%*1.33) with the projected 33% rise in required benefit payments to $1 trillion in 2017 which would certainly exacerbate the decline in the global competitiveness of the American worker and continue to damage and distort our economy.

 In the meantime the stock market, driven by higher earnings (presently being largely achieved by stock repurchases facilitated by low borrowing costs, foreign profits, labor cost reductions, part-time employment strategies and income tax strategies) and pushed further along by an asset inflating monetary policy, is creating extraordinary wealth for a small segment of our society.  Technological advancements, mass media, mass merchandizing, burgeoning government regulations that require complex legal and financial scheming, capital markets, our legal system, and the evolution of corporate enterprises have resulted in fashioning a framework with a concentrated number of opportunities to acquire and build financial wealth.  Sparing accumulated wealth from the obligation to support Social Security is no longer an option.  Forty six million Americans, an extraordinary number, need to rely on our food stamp program and the unfortunate unemployed and underemployed, those who have left the work force, continue to be a serious drag on our economy.  Our laissez-faire attitude regarding illegal immigration has and continues to prove injurious to our American wage earner and our policies regarding international activities have failed to even consider the adverse consequences for American enterprises and working Americans and, for that matter, our Social Security Program.  There is more than enough money in circulation to accommodate a thriving economy but the circulation is limited.  Job opportunities created by the private sector for our citizens will cure many of our Country’s ills.

 The success of this Proposal requires that no exceptions from the application of the SSAPR on All Annual Income, Foreign Goods and Services and Adjusted Compensation be permitted.  This will insure (1) that the annual Social Security Insurance Premium (SSIP) is affordable, (2) that the Program will start off and remain separated from any governmental social and/or fiscal maneuvering (however well intentioned), (3) that all American businesses are treated equally and the investing preferences of Americans are not influenced, and (4) that making the American worker more affordable to American Employers will translate into creating more employment opportunities which will, in turn, shift the emphasis from inducing people to spend money that they don’t have to providing opportunities to allow them to earn the money that they spend.   It will help arrest the trend of convergence (one loses the other gains) of our economy and standard of living with competing countries and help promote a necessary rebalancing of our economy and the stabilization of our economic foundation for a strong and prosperous America and rekindle the respect that comes with achievement.

 Some readers will view the ideas and statements in this proposal favorably for what may appear to them as a populist and overzealous explanation of Social Security and others will view them unfavorably for seemingly demeaning our capitalist system by attacking our corporate activities or advocating a system that they may deem to be a transfer of wealth.  The detailed explanation of the present Social Security funding process, the hypothetical projection of what would have resulted if contributions were actually invested for an enrollee, and the detailed explanation of the Trust Fund operations have been included to distinguish the Program from other Federal programs.  Furthermore explanations have been included to dispel the notion that one sector of our society pays the “most” and also to clarify that those who “own” the Bonds in the Trust Fund are the same individuals that will have to pay for the redemption of the Bonds.  Discussions of corporate activities are included to emphasize that the main responsibility of management is to build shareholder value.  Corporations are pieces of paper and cannot be expected to be patriotic or benevolent.  All the ideas, facts, figures, generalities and detailed explanations were not presented to convey or express a bias or an opinion.  They are necessarily presented to paint a big picture of the way things are to persuade our representatives in Washington that this is a viable way to resolve many serious problems facing our Nation.  Our citizens need a level playing field not only here at home but in the international arena to maintain our competitive advantage.

 In that spirit, the following abbreviated resolution is patriotically suggested:

 WHEREAS, the Six Steps included in the foregoing Proposal address the pressures to certain of our citizens and to our economy when our advanced economy, that has earned a higher standard of living, interacts with less advanced competing economies; and

 WHEREAS, the Six Steps included in the foregoing Proposal provide for a dramatic $2.7 trillion reduction of the outstanding debt of the United States of America which is presently approaching the debt limit; and

 WHEREAS, the Six Steps included in the foregoing Proposal provide, by the cancellation of the Debt, for the elimination of the obligation to pay interest on that Debt.  Insofar as the latest Social Security Trustee’s Report projects that interest to be received will have to be converted to cash for the foreseeable future to supplement insufficient FICA collections, the avoidance of converting the Trust Fund's US Treasury Bond interest payments to cash by the US Treasury will result in spending reductions equal to the required supplemental amounts in the Social Security Trustee’s projection (the latest Trustees Report projects a $650 billion requirement over the next ten years).  Furthermore, the elimination of the employer matching share for Federal employees will reduce Federal expenditures by approximately $10 billion per year or $100 billion over ten years.       

 WHEREAS, the Six Steps included in the foregoing Proposal provide that every American will be paying the same percentage of All Annual Income to a true pay-as-you-go Social Security Insurance Program.  Dollar amounts are relative – percentages are a true measure of equitable contribution and those that are accustomed to percentages on income side of their ledger will appreciate the efficacy of percentages for the support of Social Security; and

 WHEREAS, the Six Steps included in the foregoing Proposal providing for a $650 billion reduction in Federal expenditures over the next ten years as a result of the Trust Fund Debt cancellation will require increases in the SSAPR and/or an improving economy to offset such reduction, the broad base (All Annual Income, Adjusted Compensation, and Foreign Goods and Services) of support for the new Program will insure that no component of our economy is disproportionately affected by any increase in the SSAPR.  

 WHEREAS, the Six Steps included in the foregoing Proposal represent that the Social Security Insurance Premium (SSIP) is an insurance premium and not a tax, duty or tariff.  Unilateral action is hereby ordered to insure that no source of support (i.e. municipal bond interest and, notwithstanding that provision is only made for a social exception in international Services agreements, all Foreign Goods and Services) be exempt; and 

 WHEREAS, the Six Steps included in the foregoing Proposal establish Social Security on a sound financial footing and insofar as the enrollees will not in the future be fully funding their accounts, so to speak, it will allow for appropriate modifications (i.e. changes to the retirement age requirement for future beneficiaries); and

 WHEREAS, the Six Steps included in the foregoing Proposal encourage economic activity and job retention/creation in America and it is agreed that these are the soundest and most preferable methods to reduce our fiscal deficit.

 NOW THEREFORE, BE IT RESOLVED AS FOLLOWS:

  The Six Steps included in the forgoing Proposal are hereby unanimously enacted.

                  PLEASE SCROLL TO THE TOP AND PROCEED TO "EXHIBIT A"