In this quarter, the Trump Administration adopted a major Goodman Institute health care reform, our economists produced stunning new evidence on the effects of tax reform, and Republicans on the Hill updated a resolution on pre-existing conditions that we helped prepare last year.
One of the nation’s leading authorities on Social Security says the system is sending out faulty information to workers, who are trying to plan for their retirement. Social Security told one worker that if he retired at age 66 he would get the monthly benefit he would actually receive only if he waited until age 70. It told him that if he retired at age 62, he would get a benefit that would actually be paid only if he waited until age 66. Kotlikoff says he has confronted the Social Security administration with the mistakes and has not received a response.
In an ideal world, most people would own their own health insurance and take it with them as they travel from job to job and in and out of the labor market. Some employers might have better insurance than people can find in the open market. But most employers would prefer to make a cash contribution to help employees pay their own premiums in lieu of providing insurance directly.
One of the nation’s leading authorities on Social Security says the system is sending out faulty information to workers, who are trying to plan for their retirement. Social Security told one worker that if he retired at age 66 he would get the monthly benefit he would actually receive only if he waited until age 70. It told him that if he retired at age 62, he would get a benefit that would actually be paid only if he waited until age 66. Kotlikoff says he has confronted the Social Security administration with the mistakes and has not received a response.
An Obama regulation stipulated that employers caught giving their employees pre-tax dollars to purchase their own coverage could be fined as much as $100 per day for each employee, or $36,500 a year. This was the highest penalty in all of Obamacare regulations. Thankfully, the Trump administration is eliminating this penalty and much more. Beginning next January, employers will be able to use HRAs to help employees obtain their own coverage with the administration’s blessing.
Writing in the Wall Street Journal, former Sen. Phil Gramm and Goodman institute Senior Fellow Thomas Saving write “Never in the Fed’s 105-year history has it had less control over market interest rates than it has today…. To expect the Fed to hold interest rates above or below the market rate under these circumstances is not only naive but dangerous.”
What share of the tax cuts went to the rich and the poor? The richest 1 percent received 9.3 percent of the total tax cuts, but they were previously paying 30.2 percent of all the taxes. The top 20% received 52.2 percent of the tax cuts, but they were previously paying 80.1 percent of the taxes. The bottom 20% got 3.3 percent of the tax cuts. But previously they were not paying taxes at all. In fact they were receiving a 9.0 percent “refund.”
Could everyone in America live above the poverty line if only employers were less greedy? Bernie Sanders thinks that. He also thinks that Medicaid, Food Stamps and other poverty programs are subsidizing corporate greed — because they make it possible for employers to pay low wages. Alexandria Ocasio-Cortez (AOC) calls the federal minimum wage of $2.13 an hour for people with tip income “indentured servitude.” What’s her answer? The government should force employers to be more generous.
Tom Saving has a new book called A Century of Federal Reserve Monetary Policy: Issues and Implications for the Future.
In his latest column on the subject, Prof. Kotlikoff says Social Security underpaid close to 10 thousand widow(er)s now over age 70 some $130 million and is underpaying each new cohort of widow(er)s reaching age 70 roughly $10 million.