(ThyBlackMan.com) An Open letter To The Chairwoman of The CBC – The Honorable Marcia L. Fudge:
In the coming weeks, immigration reform will be debated vigorously in the Congressional House of Representatives, regardless of House Speaker John Boehner saying no immigration legislation will be brought to the floor if a majority of Republicans in the house don’t support it. It may not happen today or tomorrow, but it is clear at some point in the near future with or without a majority of the GOP agreeing, immigration reform will be brought up in the House of Representatives. What position the Congressional Black Caucus takes on this issue is of vital importance to black people! It is fair to say, the Congressional Black Caucus is the elected collective voice of African Americans in the House of Representatives.
Anyone who has spent anytime in the African American community knows the major concerns of blacks are job security and job creation. It does not matter that these issues do not receive headline coverage in the mainstream media. Blacks have endured double-digit unemployment for the last five years. The current black unemployment rate for May is 13.5%, while the
national unemployment rate for the same period is 7.6%. Scratch the surface of public opinion in any black community and it is not long before the issue of jobs comes up.
It is important to remember that immigration reform means the legalization of citizenship for 11 million undocumented workers who are in the United States. When the immigration bill passes and it maybe as soon as the end of the year, blacks as well as whites will find themselves in heated competition with “the newly legal” immigrants for whatever jobs are available. Many blacks however will be competing at the lower end of the job market in terms of skills, where the newly legal Hispanic citizens are more prolific.
Two things the Congressional Black Caucus can do for the African American community it represents in regard to this situation are: 1) Demand that a national job creation plan be discussed and debated, that will add jobs to the national stock as a part of any discussion of comprehensive immigration reform, and 2) Don’t become part of any compromise vote that does not lead to this objective. Why should a minority of representatives within the House of Representatives attempt to influence the majority in this regard?
The reason why is because the American economy is currently anemic and not creating enough jobs to sustain healthy economic growth. Immigration reform will further aggravate this circumstance, especially for African Americans. Our economy needs to create 250,000 to 300,000 jobs each month to sustain a healthy economic recovery from the 2008 downturn. Right now, we are averaging less than 170,000 jobs monthly.
There is a logical solution however, to the problem of creating more jobs. The Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program is the means through which a national job creation program can be created. Following is a detailed discussion of how this job creation plan can be accomplished. Immigration legislation will require the newly minted citizen-immigrants to start down a path that will lead to citizenship, the acquisition of a Social Security card and the payment of Social Security taxes. If you calculated the average income of immigrants annually at $28,435.00 dollars at the low end and $56,870.00 at the high end, the contribution to the Social Security Trust Fund on average could come to $20 to $40 billion dollars in new tax money annually to the Treasury of the United States.
These figures do not include any back taxes or penalties these new workers will have to pay. With Social Security taxes, penalties and back taxes, the amount of money going to the U. S. Treasury could easily top $40 to $80 billion in any single year or combination of years. With this amount of income coming into the nation’s treasury, the President and Congress can act and end this downturn by changing the laws governing Social Security by allowing 10,000 baby boomers who are retiring each day over the next 17 years to take partial distributions up to $40,000.00 dollars from their Social Security principal. This is A JOB CREATION PLAN WHICH EFFECTIVELY ENDS THIS DOWNTURN WITHOUT RAISING THE DEFICIT. It can be done cleanly and without adding to the deficit by putting money into the hands of retiring baby boomers, who are consumers. It’s a fact, consumers account for about 70% of our economic activity or GDP, (gross domestic product). Therefore any program of spending by the federal government that will reduce consumer debt relative to income would be positive for the economy and job creation. We are not going to have a sustained economic recovery without engaging the consumer and reducing private debt.
Therefore the federal government needs to have policies and plans that will help grow consumer income. You just simply have to change how Social Security checks are paid. Let the boomers have partial distributions of their Social Security principal in the amount of $40,000.00 dollars, and issue them a monthly check on the remainder of their principal.
Look, let’s say it takes $313,000.00 dollars in principal at 6.9% interest to send me a monthly Social Security check of $1800.00 dollars. So, I say to Social Security, I would like to have some of my money up front, say $40,000.00 dollars. Now pay me a monthly check on the remainder, which is in this instance $273,000.00 dollars, which amounts to a monthly check of $1569.00 dollars. That makes this plan (let’s call it the Davis Plan) deficit neutral. It’s their money, for heavens sake! Presenting the option of taking a partial distribution of your retirement principal is common practice in the private sector. Yet we allow the largest payer of pensions, the Social Security Trust Fund, not to do it at a time when it will benefit our economy the most.
The impact of allowing partial distributions, which is simply taking down a part of your pension principal and than rolling over the rest to be received monthly would pull, this economy out of this downturn. BOOMERS ARE RETIRING AT A RATE OF 10,000 PER DAY having STARTED IN JANUARY, 2012, at the age of 66 and continuing for the next 17 years! (at 66, they receive full benefit payments) 10,000 x $40,000.00 = $400,000,000.00 million dollars. That’s right! They will dump that amount into this faltering economy each day for the next 17 yrs. That amount in effect is really $800,000,000.00 million dollars per day because money handed directly to the consumer turns over 1 to 2 times. There are 68 to 72 million boomers depending on who’s counting. With $800,000,000.00 MILLION DOLLARS coursing through this economy every day, the downturn ends!
Add the incentive of waived or reduced taxes on the first $40,000.00 dollars taken down from any retirement fund, including Social Security and participation is enhanced tremendously. It’s the boomers and their kids who are getting hardest hit in this downturn anyway. Additionally, Congress should remove the limit on income for baby-boomers who are receiving Social Security benefits to give them an opportunity to reestablish themselves financially.
Yes, it will require, the politicians making Social Security actuarially sound, but that is what they say they are going to do anyway! Besides, making Social Security actuarially sound is a mathematical function not a political one. Look, this plan addresses every objection Republicans and Democrats have. It creates jobs without increasing the deficit and lowers taxes on the wealthy as well as the middle class. It’s big! Lifting all boats in the water at the same time, and answers businesses’ need for long term planning.
Chairwoman Fudge, you have an opportunity through your leadership and advocacy of this plan to bring an end to the horrendous suffering within the black community due to double-digit unemployment. Please take it! Help your constituency and in doing so, you bring needed healing to a nation.
Staff Writer; James Davis
More information about JD and his Deficit Neutral Stimulus Plan Can be founded at http://www.sslumpsum.com.
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