A Law Suit against Congress to Save our Social Security and other Trust funds from being looted!
The Congress of the United States
All United States Citizens
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However, the gist of the problem is as follows:
(A) There are currently two debts of the operating budget of the federal government:
(1) $3.4 trillion in publicly held debt (the treasury bills, notes, and bonds held by individuals and institutional investors in the U.S. and abroad), and
(2) $2.35 trillion of debt OWED TO ALL the trust funds (of which the amount owed to Social Security Trust Fund is $1.175 trillion in 2001).
The total or gross debt of the operating budget is the sum of these two and currently stands at $5.75 trillion. It is important to understand that these both are the debts of the operating budget, and hence, can ONLY be paid by the revenues that fund the operating budget, i.e., INCOME TAXES.
(B.) Furthermore the Congressional Budget Office (CBO) has projected a total surplus of $5.6 trillion (assuming an average annual growth rate of 3\% for the next ten years). In truth these are two separate surpluses:
(1) The first, is the trust fund surplus of $3.4 trillion ($2.5 trillion for Social Security; $0.4 trillion for Medicare Part A (HI) and $0.5 trillion total for some 117 other trust funds);
(2) This leaves an on-budget surplus of $2.2 trillion ($5.6 - $3.4 trillion).
Since, both these debts are the debt of the operating budget, the ONLY monies available to pay down the two debts, is the surplus of the operating budget i. e., of $2.2 trillion of INCOME TAX revenues. Now no matter where one learned fifth grade math, in Texas or in Timbuktu, one knows you cannot subtract the debt owed by the operating budget of $5.75 trillion from the surplus of $2.2 trillion of the operating budget and still have $1.6 trillion dollars left for a tax cut. In fact, one can't even pay off $2 trillion of publicly held debt (per the Bush Budget) from $2.2 trillion, and still have monies left over for a $1.6 trillion tax cut.
All the Bush Administration and the Congress (both political parties to some extent) are doing are moving the monies around so as to confuse the public. They are using the social security surplus to pay down $2.0 trillion of the publicly held debt. This only means that after ten years they will owe less to publicly held debt, and more to the trust funds.
In Year 2001:
The publicly held debt = $3.4 trillion
Debt owed to ALL trust funds = $2.35 trillion
Total debt of the operating budget = $5.75 trillion
In Year 2011:
The publicly held debt = $1.4 trillion ($3.4 - $2.0)
Debt owed to ALL trust funds = $4.35 trillion ($2.35 + $2.0)
Total debt of the operating budget = $5.75 trillion
Interest accrued over ten years (2011-2001) = $1.35 trillion
Gross Debt of Operating budget = $7.1 trillion
The total or gross debt under the Bush Budget continues to grow to $7.1 trillion at the end of ten years. The only difference is the amount owed to the publicly held debt goes down, and the amount owed to the trust fund grows by a similar amount. When we add in the accrued interest the entire amount explodes.
Hence, the charade being perpetuated by both republicans and democrats is that they continue to loot the trust fund monies to pay down the publicly held debt. This is akin to one using the line of credit on one's mother's (trust funds) MasterCard (or borrowing from her Retirement 401-k) to pay off one's (operating budget's debt) Visa Bill. Congress' so-called "lock box" only pertains to not using trust fund monies for annual on-budget deficits. This is a futile if easy promise to make, since currently and into the foreseeable future there are no annual budget deficits forecast.
The democratic alternative offered by Senator Kent Conrad (D-ND), ranking member on the budget committee, has some semblance of truth, as he puts aside one-third (1/3 rd.) of the projected operating budget to pay down the "long term" debt or debt owed to the trust funds. Yet, it is all sleight-of-hand. I believe this is all wrong headed. The Congress either needs to tell the public we need to raise (yes, raise) income taxes to pay down the both debts, or we can choose which of the two debts we should pay down with the operating budget surplus.
The publicly held debt is secured with real collateral (assets in the form of treasury bonds), while the trust funds are filled with IOU's. We also know per the trustees report that as the baby boomers retire the trust fund surpluses turn into trust fund deficits by 2016, and the funds go broke in 2038. Hence, I believe we should first pay down the trust fund monies from operating budget surpluses of $2.2 trillion projected by the Congressional Budget Office (CBO) for the next ten years. While these trust fund monies are collected by the Treasury department and are called FICA taxes, they are really the forced savings or contributions of workers into their pension plans (defined benefit plans), of which Social Security and Medicare are the best known. However, there are a slew of lesser known trusts: the military retirement trust, civilian retirement trust, unemployment trust, railroad retirement trust, airport trust, and highway trust to name a few.
Hence, in general I would ask the law suit to address the following:
(1) That these government controlled pension plans be run under the same laws that govern pension plans in the private sector. The most important of which is that they cannot be co-mingled with the operating budget of a corporation (or the federal budget)to be used to pay off expenses (pay for programs), pay off debt, or to bloat profits.
(2) The suit would also require that the current surpluses to these various trust funds go directly from Treasury (out of the hands of Congress) into a "blind" trust set-up for each of these individual trusts. Furthermore, that the trustees who are political appointees cannot invest the money directly, or even have knowledge of the exact nature of the investments. The trustees may ONLY set the general rules of investment, e.g, 60\% bonds, 40\% stocks. Instead, the board of trustees must be required to hire money managers (trust mangers) to actually invest the funds independently of the trustees.
I would like to clarify, I am in no way and no how, suggesting that as a citizen I can dictate how the Congress should appropriate their (our) money. America is a representative democracy, and citizens do not get to vote on every bill. Instead, they only get to vote for their representative(s) during a election. At least, that is how it used to be before the last presidential election. Hence, Congress can do whatever it wills with the $2.2 trillion of on-budget surplus(On the other hand, it cannot do what it pleases with the Trust fund surpluses). If the majority chooses they can have their $1.6 trillion tax cut over ten years. They can choose to spend the entire remaining surplus on a Missle Defense Shield, instead of passing a prescription drug program, or fixing our dilapidated infrastructure, and removing the arsenic from our drinking water systems. If the American people disagree with their actions, they will have a chance to vote on their choice for new representation in the next election.
However, what I do believe I have a right as a citizen to insist on is that the President and the Congress keep their sticky fingers off the citizen's retirement and other trust fund monies. What this law suit will achieve (if passed) is it will sever the trust funds from the operating budget legally and completely. It will remove the trust funds from Congresses hands, once and for all. It is urgent to win this law suit, as Congress is currently in the throes of passing a budget and tax cut, which continues to usurp trust fund surpluses to pay off the operating budget's publicly held debt. My law suit will require Congress to treat pension funds under the same ERISA laws that cover private corporation's pension funds. It will require Congress to adhere to the "truth in reporting" rules and requirements. They will no longer be able to say they can have both a $2.0 trillion debt reduction program, and have a$1.6 trillion tax cut. They will honestly have to tell the people of the choices they face.
I am looking for an attorney who is proficient in Contract, Pension and Constitutional Law, and who is a bit of a maverick and able to think out of the box. This case will allow the person to do something substantial for the public good and make a name for himself/herself. The case would be Nariman v. The United States Congress. If you have the qualifications and the interest in pursuing this matter, you can reach me at [email protected]
I would invite all citizens to sign the petition asking for ALL the trust funds to be legally seperated from the operating budget of the Federal Government, and be taken out of the hands of Congress forevermore.