Minutes from February 9, 2011

Call to Order, 11:30 am, Kathleen Gehr

Reading of the Minutes: Katherine Hegemann, Accepted as given

Discussion of How to Prevent a Social Security Shortfall:

Will the 2% reduction of employee FICA taxes hurt Social Security?

The group believes it will.

Will the 2% reduction be allowed to expire at the end of one year?

The group was not sure but felt probably not depending on the state of the economy.

Increase worker and employer contributions.

• Workers and their employers currently pay 6.2 percent of earnings up to $106,800 into the Social Security system, or a maximum of $6,622 each per year. Self-employed workers are required to pay 12.4 percent of pay up to the same cap. If the contribution rate were increased by 1.1 percent to 7.3 percent of earnings, Social Security’s projected deficit would be eliminated. Using this fix, a worker making $43,451 in 2010 would face a tax increase of $478 a year, or $9.19 a week, and the employer would face an identical increase.

Modify the Social Security tax cap:

• Workers pay into the Social Security system on earnings up to $106,800 in 2010. About 83 percent of worker earnings were subject to Social Security payroll taxes in 2008. If all earned income above $106,800 annually were subject to Social Security contributions but did not count toward benefits, Social Security’s projected deficit would be completely eliminated. If the higher income counted toward Social Security benefits, about 95 percent of the shortfall would be absolved. Other ideas: apply a new Social Security formula to earnings above the current cap or raise the amount of the income cap to apply to 90 percent of all worker earnings.

The group took these two together. However, the problem of the cap should be resolved before employee and employer contributions are raised. The consensus was that the cap should be removed.

Average in more working years:

• Social Security checks are currently based on an average of a worker’s 35 highest paid years in the workforce. Those who haven’t worked 35 years have zeros averaged in. The averaging period could be increased to 38 or 40 years, which would reduce the deficit by 14 and 23 percent respectively.

The group believes this is not a good idea. The present number used is 35 of the highest paid years. We believe this is enough.

Decrease the cost-of-living adjustment:

• Social Security benefits are currently automatically adjusted each year to keep up with inflation, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers. Reducing the cost-of-living adjustment by 1 percent each year would eliminate 78 percent of the deficit. Even knocking half a percent off the annual adjustment would reduce the deficit by 40 percent. An alternative way of measuring the cost-of-living could also be used.

The possible reduction of COLA from 3% to 2% was unanimously rejected.

Include more workers:

• Most Americans are already covered by the Social Security system. About 94 percent of workers pay employment or self-employment Social Security taxes. But some Americans are currently exempt from Social Security taxes including state and local government workers participating in alternative retirement systems, federal workers hired before 1984, college students working at academic institutions, and ministers who choose not to be covered. However, this fix would need to be applied in conjunction with others. Extending coverage to workers who previously didn’t participate would only reduce the Social Security shortfall by about 9 percent.

The group felt this was one way to help Social Security solvency.

A legacy tax:

• The first retirees who received Social Security payments from the system didn’t pay Social Security taxes throughout their entire working life, which contributes to Social Security’s fiscal problems. Several ideas have been raised to counteract this legacy cost including a 3 percent legacy tax on earnings above the current tax cap of $106,800 or on adjusted gross income over $125,000 for individuals and $250,000 for couples. This legacy tax would eliminate close to a third of Social Security’s shortfall. Another proposed idea is directing estate tax revenue into the Social Security trust fund, which would eliminate 20 percent of the fund’s deficit.

This is a complicated option but would help solve the problem.

Diversify investments:

• Part of the Social Security trust fund could be invested in equities to try to earn returns that would help to sustain the Social Security program. Investing 15 percent of trust fund assets in equities would reduce the deficit by 14 percent if a 9.4 percent rate of return was achieved. If 40 percent of the trust fund were shifted into the stock market and earned 9.4 percent annually the deficit could be reduced by a third. Of course, this also exposes the trust fund to increased liabilities in times of economic downturn.

The group totally rejected this solution.

Resolution by Kathleen Gehr: The Democratic Women of Johnson County, Tennessee will disband as of February 9, 2011.

Motion to Disband: Unanimously passed.

Resolution by Katherine Hegemann: After all payments are made from the DWJC bank account, the funds will be donated to Johnson County Safe Have.

Motion for DWJC funds: Unanimously passed.

Meeting adjourned at 12:30 pm and was followed by a light lunch.

Submitted by: Katherine Hegemann

Date: February 9, 2011

Minutes: October 13, 2010

Kathleen Gehr called the meeting to order at 11:30 am.

Katherine Hegemann read the minutes from August 2010, which were approved with no corrections.

Kathleen Gehr reported the bank balance is $341.63.

Joe Mike Akard, the Democratic candidate running for state representative, gave a presentation of the major issues he feels need addressing by the TN General Assembly.

1. Jobs
2. School Security
3. Pre-K
4. School maintenance
5. Technology

Katherine Hegemann lead part 1 or a two part discussion on Social Security as part of the larger discussion about the federal deficit.

1. Overview

WHAT IS SOCIAL SECURITY?

Social Security offers basic benefits that help retired workers, disabled workers, or the survivors of deceased workers to stay out of poverty.

WHO CAN GET SOCIAL SECURITY BENEFITS?

Social Security benefits are earned insurance benefits. The time necessary to reach eligibility for any of the benefits varies from benefit to benefit.

HOW ARE SOCIAL SECURITY BENEFITS CALCULATED?

Since Social Security is an earned benefit, benefit levels vary according to a worker's lifetime earnings.

WHAT KINDS OF BENEFITS DOES SOCIAL SECURITY PROVIDE?

The benefits Social Security provides are similar to those provided by insurance companies. Disability and survivorship benefits resemble life insurance. Contributions to Social Security are based on a worker's earnings.

IS SOCIAL SECURITY STILL IMPORTANT?

Social Security has increased in relative importance as retirement income adequacy has declined. In comparison, Social Security's coverage is almost universal; 97.7 percent of households nearing retirement in 1998 could expect some Social Security benefits. Social Security favors lower earners because it offers higher relative benefits to lower-lifetime earners.

WHY ARE PEOPLE TALKING ABOUT REFORMING SOCIAL SECURITY?

Social Security is not going bankrupt.

HOW DOES THE FINANCIAL FUTURE OF SOCIAL SECURITY LOOK?

When the baby boomer retirement is underway, Social Security will draw on these accounts to help pay for promised benefits.

Because income is currently exceeding expenditures, Social Security is accumulating assets in its trust funds. The Social Security trust fund assets are invested in special non-tradable government bonds.

ARE PRIVATE ACCOUNTS A VIABLE SUBSTITUTE FOR SOCIAL SECURITY?

No, private accounts cannot substitute for Social Security's guaranteed benefits. We are discussing two different systems: private accounts are individual savings accounts, whereas Social Security is a social insurance program.

WHAT ARE SOME IMPORTANT CONSIDERATIONS WITH SOCIAL SECURITY PRIVATIZATION?

Social Security privatization has become a hot button issue. With privatization, part of Social Security would be replaced with individual accounts. Since Social Security has already promised benefits to workers and retirees, this diversion of funds creates a new financial hole. To improve Social Security's financial outlook, those who favor privatization have proposed sharp benefit cuts.

2. Discussion: Ways to fix Social Security

Reduce benefits: nobody thought this was a good idea. Reason: would increase the poverty rate among seniors

Raise the retirement age: only on those who work in jobs that don’t use much physical labor (not really feasible), people who continue to work full-time should have their SS benefits lowered

The discussion will continue at the next meeting.

Kathleen Gehr adjourned the meeting at 12:30 pm, and the group shared lunch.

Submitted: Katherine Hegemann, Secretary

Date: 10/16/2010

Minutes: August 11, 2010

Kathleen Gehr, President, called the meeting to order at 11:35 AM.

Katherine Hegemann, Secretary, read the minutes from the July meeting. Changes were made. Revised minutes were approved.

Kathleen Gehr:

1. Discussed with the leader of the Republican women, again, about the possibility of joint discussions.
2. She proposed that we consider working with the Republican women on a project to provide assistance for heating costs for the elderly in Johnson County.

Kathleen Gehr lead the discussion.

Discussion: The Federal Deficit

1. The difference between the National Deficit and National Debt: Debt is the total amount owed. Deficit is the difference between how much the federal government spends and how much it collects in one year.
2. What is the debt ceiling and how much is it?: The debt ceiling is the federal government’s credit limit. As of January 28, 2010, the debt ceiling was set at $14.3 trillion.
3. What is driving up the debt?: A graphic was presented showing that the major drivers of the debt are ownership of debt by foreign countries from trade imbalances, the wars in Iraq and Afghanistan, defense spending, and tax cuts. At present, we are only paying the interest on the debt not paying down the debt itself.
4. What are the national and personal consequences of a high federal deficit?: A partial list includes higher taxes, higher interest rates, fewer jobs, erosion of personal life savings, and less family security.

Assignments for the continued discussion:

1. Social Security and Future Implications for the Federal Deficit: Katherine Hegemann
2. Federal and State Financial Reform: Helen McQueen
3. Green Jobs and the Green Bill: Louise Hamm
4. Taxes: unassigned for now

The meeting was adjourned at 12:30 PM.

The members joined together for a light lunch and conversation. The group left at 1:30 PM.

Next Meeting: September 8 @ 11:30 AM

Submitted: Katherine Hegemann

Date: August 18, 2010

Summary Minutes from June 12, 2010 DWJC Meeting

Kathleen Gehr called the meeting to order at 10 am.

A motion was made, seconded, and passed to move the DWJC meeting to the second Wednesday of each month. The group will meet from 11:30 am-1:30 pm at the JCPL.

Sonja Fox, President of the TNFDW, spoke to the group about Democratic activism.

Helen McQueen and Lydia Lewis spoke on the flaws in the current healthcare reform law. The group discussed “Where Do We Go from Here.”

The meeting adjourned at 11 am.

Submitted by:

Katherine Hegemann, Secretary

June 27, 2010

Minutes: May 8, 2010

Present: Kitty Hegemann, Jill Bontrager, Bobbie Smith, Louise Hamm, Helen McQueen

Guests: Joe Mike and Barbara Akard

Meeting called to order at 10:00 am

Old Business

• The DWJC will meet at the Johnson County Public Library in June and August-December 2010
• In a phone call from Sonja Fox incoming president of the TNFDW, Sonya said that she is from Johnson City and will try to be at our June meeting. She also suggested that if we move our meeting to lunch time on a weekday, we might have more people come. Suggestion to think about: meet from 12:30-1:14 pm on Wednesdays since most of the stores in our area close at noon on Wednesday.

New Business

• Email from Wanda Payne suggesting that we, with the Republican women, sponsor a candidates’ forum before the August elections.
• Recognition of Joe Mike Akard who is running for the House of Representative in the Democratic primary.
• Reading of the minutes by Kitty Hegemann: Approved
• Jill Bontrager will write a letter to the editor of the Tomahawk and Bad Idea News stating the main points we will cover in today’s discussion of health care reform.
• Joe Mike Akard spoke to the group about what he stands for and said that he would open a permanent office in Johnson County if he wins the election.

Program

• Kitty Hegemann: The law and mandates

1. If you have insurance, you will not be forced to buy new coverage. Those not covered will have to purchase insurance or face a monetary penalty.
2. Current insurance will have to meet minimum requirements of coverage, consumer protection standards, submit to an appeals process in a dispute, and the premiums will most likely decrease. There is a grandfather clause but allowances are yet to be determined.
3. There is no public option; however, states can implement one if they so choose. All exchanges will be run by the individual states, but must follow federal regulations.
4. Small businesses will receive a 35% tax credit for purchased insurance and by 2014 that would go up to 50%. Additionally, small businesses may work cooperatively to purchase insurance and use their group to negotiate lower premiums.
5. Paid for by a 40% tax on plans costing $8500 (individual) to $23,000 (family). This affects very few people since most plans cost much less than that. Taxes will be levied on health insurance, pharmaceutical, and medical supply companies. Increased efficiency and reduced waste will save money, which will help pay for the programs.

• Jill Bontrager: Exchanges

1. Sources: whitehouse.gov, Christian Science Monitor, Time Magazine
2. Facts: larger base=lower costs; cover those who would not otherwise be covered; use of the marketplace to provide coverage
3. How: use the states to administer; if a state can’t or won’t participate the federal government will run the exchange; use of the internet, phone, offices or a combination of these to reach out to the population; levels of coverage to include bronze, silver, gold, and platinum; no monopolies and members of an exchange may not be charged higher rates.
4. Positive aspects: states may have a public option (the governor of WV says a public option is best for his citizens); states can join together for better plans as can regions; minimum standards of coverage are mandated.

Next Topic: Where do we go from here?

Next Meeting: Johnson County Public Library on June 12th at 9:45 am until 11:00 am

Adjourned: 11:03 am

Submitted by: Katherine Hegemann, Secretary

Minutes for April 10, 2010

The meeting began with coffee and breakfast sweet breads at 9:50 am.

Meeting called to order at 10:05 am.

Present: Kathleen Gehr, Kitty Hegemann, Louise Hamm, Helen McQueen, Bobbie Smith, Kathleen Mount, Romayne St. John, and Jill Bontrager.

OLD BUSINESS:

Kitty Hegemann read the minutes, which were approved.

Copies of the minutes need to be provided to all attendees at each meeting.

We will send a postcard, costing $.28 each, for three months then evaluate their effectiveness, which was approved.

We will continue the call list with the four people agreeing to do this task, which was approved. The callers will notify the secretary of those who wish to be removed from the list.

The secretary will contact the librarian about using the public library for our meeting, which was approved. The secretary will then let the members know the outcome.

NEW BUSINESS:

Kathleen Gehr reported on two health care reform topics: key benefits beginning this year and benefits for retirees.

A. What Healthcare Reform Means for Us

Many of us are wondering how the healthcare reforms signed into law earlier this week will impact us. It's important to know that nothing in the bill changes our right to negotiate our healthcare benefits.

B. Key Healthcare Reform Benefits Starting THIS YEAR Include:

1. Ending lifetime limits on benefits.

2. Regulating annual limits on benefits from 2010-2013 (abolishing them in 2014).

3. Allowing young adults to stay on their parents' insurance plan up to age 26.

4. Banning the insurance company practice of denying coverage for pre-existing conditions for children. The ban applies to everyone in 2014 and provides a subsidized high-risk pool in the meantime for those unable to secure coverage.

5. Ending gender discrimination in insurance rates.Stopping the insurance company tactic of dropping coverage for people who get sick.

C. Benefits for Retirees - Including Early Retirees - Include:

1. Assisting pre-Medicare retirees with insurance costs. Under the new law, 80 percent of plan costs over $15,000 will be paid through a new program.

2. Providing assistance to employers and Voluntary Employee Beneficiary Associations (VEBAs) to encourage them to continue coverage for pre-Medicare retirees.

3. Phasing out the Medicare drug "doughnut hole."

4. Eliminating co-pays for preventative screenings.

5. Extending the life of the Medicare Trust Fund through cuts in wasteful spending.

The topic will be carried over to the next meeting with Kitty discussing the law and mandates, Jill the exchanges, Louise the flaws, and Helen the benefits and consequences of no action.

Remainder of the time was each attendee stating what they would like to see change about health care.

Kitty will submit a short article about the changes and benefits to seniors to include the donut hole and advantage plans.

Meeting Adjourned: 11:05 am

Next Meeting: May 8th at 9:45 am with the place to be determined

Meeting for April 10, 2010

Date: April 10, 2010

Time: 10:00 AM

Place: First United Methodist Church of Mountain City, Tennessee

Agenda: Discussion of Health Care Reform

1. Overview-Kathleen Gehr
2. The law and mandates-Kitty Hegemann
3. Exchanges and purchasing-Jill Bontrager
4. Flaws in law and proposals-Louise Hamm
5. Benefits and consequences of doing nothing-Helen McQueen

How to get there:

Anyone interested in this topic is invited to attend.