May

Hey Brother, Could You Spare $146-$240? Futureshock Deductions, Courtesy of the CLASS Act

In another example of how the federal government doesn’t work for the average American, next year you will be approached by your employer about a new payroll deduction. The deduction, which funds long term care in the home, will cost anywhere from $146 to $240 a month depending on whose estimate you accept as valid. It’s all part of a hidden bill with the recently enacted healthcare reform law known as the CLASS (Community Living Assistance Services and Support) Act.

You’ll likely find that that the option is voluntary at first, but the reality is this: in a time where many of us have few dollars to spare, how many of us have an additional $146 to $240 a month to buy long term care insurance administered by the federal government? And how long will it be before this entitlement program, like so many others, becomes a mandate on workers as the government realizes that without full participation, it cannot possibly fund the existing pool of beneficiaries?

Here’s your reality: next year the federal government will inform your employer about their obligation to tell you about the program. You’ll likely be told that for the nominal fee of $146 to $240 a month, you’ll receive $75 a day worth of flex cash benefits to cover long term home based care after a five year vesting period. How many you are likely to consent to a deduction of up to $240 a month? How many of you could realistically spare an additional $240 a month deducted from your paycheck to fund yet another government program which will likely go down the same road as countless other programs before it to insolvency or abuse?

Social Security was a pay as you go program, until rampant unemployment in the 80s forced the federal government to develop a reform of Social Security due to the fact that there weren’t enough current workers to pay in to Social Security at a rate which would fund the existing pool of beneficiaries. The government changed Social Security by raising the withholding tax that funded the program, thereby generating a surplus.

A little known fact of that reform was that the surplus would be automatically loaned to Congress by law each and every year that a surplus occurred. The American people are used to hearing about rampant budget deficits and an exploding national debt, but given the existing national debt of $13 trillion, how angry do you suppose the American people would be to hear that the actual debt was $2.5 trillion higher? That’s because Congress has used the surpluses from Social Security to artificially reduce the deficit for each and every year since reform was enacted. It’s all an accounting trick. The amount that Congress has gone into the hole over the past 40 years of consecutive deficits is somewhere around $15.5 trillion. That’s over 100% of our GDP, which places us in the company of Greece, Portugal, Spain, Ireland, and other such nations who find their sovereign debt threatened with a downgrade.

There isn’t much of a reason to trust that Congress will resist the temptation to utilize the money generated by the CLASS Act deduction for purposes other than the funding of long term home care. After all, they’ve robbed Social Security for nearly three decades with impunity. At a time when the share of personal income generated by private wages is shrinking, the government wants individual Americans to consent to giving up $146 to $240 a month to fund this folly of a program.

When the time comes, and it will come sometime in 2011 when your employer approaches you about signing up for the deduction, you might want to pause and reflect on the revenues that you’ve already paid into our government and its programs. Do you really trust the government to be a good steward of your money after its shameful performance of the past 40 years? With two wars still ongoing, a $13 trillion deficit, shrinking wages, and rampant unemployment, do you really want to consent to the funding of yet another government program with your hard earned money? Do we really want to give the federal government more money to work with?
Do you trust the federal government to refrain from making the program and the deduction mandatory when the inevitable occurs and benefits exceed the amount of voluntary payroll deductions? Washington has had enough of our money and then some, given our national debt and IOUs to Social Security, not to mention unfunded obligations to Medicare and Medicaid. It’s time to say no.

In the upcoming elections, we can take the first step towards clamping down on Washington by engaging in a thorough repudiation of its spending policies. Every elected official who voted for the healthcare reform bill, and every elected official who supported it from afar, ought to be voted out of office in 2010 and the elections that follow. We have gone too long as absentee lords of our government, and it is time to remind them that they serve at our pleasure and for our purposes. Spending us into debts that will crush both our generation and that of our children and their children is unacceptable. The debt must be confronted, and that means reining in government spending in every area. Any candidate who refuses to commit to hard and specific cuts in government expenditures should not be elected to office. The futures of our nation and our paychecks are at stake. Vote your wallet and your checkbook in November 2010 and in every subsequent election if you would seek to retain and add to the contents of either.