Our indecisive congress will have to come to an agreement on whether or not to continue the payroll tax cut and federal unemployment benefits. Both are set to expire at the end of 2011.

Obama Supports Renewing Payroll Tax Cuts

President Obama last week called for extending the cut in payroll taxes. The President has been campaigning in support for bigger temporary payroll tax cuts. Obama is pressuring Congress to renew and increase next year’s payroll tax cut. Obama claims it will raise consumer demand and boost the economy. If Congress fails to make a decision by the end of the year than the payroll tax would return to 6.2%. This would increase taxes on 160 million working Americans.

Obama claims that not renewing the the pay roll tax cut would mean a tax increase of $1,000 for the average American family.
Obama said to Congress “Don’t be a Grinch, Don’t vote to raise taxes on working Americans during the holidays.”

Bipartisan Political Support for Extending Tax Cuts

Considering the fact that elections are just around the corner it would be easy to fathom bipartisan support for a proposal involving tax cuts. Just ask Bush senior what raising taxes close to an election campaign did for him. We believe that the payroll tax cut will resume based on this line of thinking.

Extending Federal Unemployment Benefits

Congress is also debating whether or not to continue federal unemployment benefits. Federal unemployment benefits kick in after the 26 weeks of state benefits run out. Federal Unemployment benefits add 73 weeks in high-unemployment states.

Let’s Compare the Cost to our Government

Comparing the cost to our Government, extending federal unemployment benefits for another year would be the more cost effective of the two. According to the Congressional Budget Office it would cost $44 billion. Renewing the 2% cut in payroll taxes for one year would cost up to $116 billion.

The President supports keeping Federal unemployment benefits and is campaigning for increased cuts in payroll taxes in 2012. It is difficult to predict whether or not Congress will agree with Obama. Lots of room for comments here!!

How will the cost of living in the U.S.A be effected in 2012?

Student debt in America has hit an all time high

It is estimated that over 66% of students have an average debt of $25,000 as compared to $24,000 in the class of 2009. Experts are saying that the failure of federal grants, and the weak job market are to blame. Federal and state governments have been reducing their support for post-secondary education. We don’t foresee the average student debt coming down in the next decade unless the job market and government programs improve.

The Institute for College Access & Success released their Project on Student Debt report. They found that the average debt for the class of 2010 was between $950 and $55k. In 2010 students living in the Northeast and Midwest had the highest debt, while students in the West were at the lowest.

Federal Aid is Failing

Recently President Obama reveled a plan to help students consolidate their loans. The idea is to reduce their monthly payments. He’s also is proposing changes to the current program.

They key changes are reducing loan forgiveness from 25 to 20 years and allowing students to pay 10 percent of their discretionary income instead of 15 percent towards their loans. Obama’s plan will affect loans beginning in 2012 and does little to help the students whom are already drowning in debt.
Another weakness of the plan is that it doesn’t address private student debt. JOBS JOBS JOBS!!

Occupy Wall Street’s Stance

Student debt has become a fact of life, and the Occupy Wall Street movement has placed this topic at the top of their agenda. Many students believe that they wont be able to pay off their loans in their lifetime. Activists camped out in Mellon Park are displaying cardboard signs listing the total amount of their student debt.

At the heart of Occupies proposal is total forgiveness of all student debt via debtors and borrowers. This ambitious plan requires a pledge from debtors, students and parents alike. Students of the Occupy Movement are organizing a boycott on the repayment of student loans to kick this into gear.

A Universal Cost of living Solution

Everyone is having trouble making ends meet. We need to tackle the real issue which is unemployment in America. High income and low debt equal low cost of living in every state. Every single financial problem in America would be solved if unemployment was low. People would have money to pay their debts, buy retail items, and pay taxes to fund our government. We have to invest money in job creation first and relieve American’s who need help now 2nd. Providing relief at a future date is admitting defeat, wasting money, and doing absolutely nothing to solve today’s problems.

What do you think? Feel free to way in.

The Census Bureau’s new Supplemental poverty measure reveals that 1 out of 3 citizens are near or below the poverty zone. The new measure takes into consideration income after taxes,child care, gas and health care expenses among other factors. The Census Bureau is taking into consideration public assistance programs such as food stamps,tax credits, and mortgage adjustments. All of these are factored in to the cost of living equation for each state.

State Assistance Programs Lower Cost of Living

It is a shock to know that 100 million people are with in the poverty zone or just above it. The Supplemental poverty measure also revealed that 20% of the 51 million who were close to poor had to receive benefits to merit the classification. So with out Government assistance in America 10.2 million more of our citizens would be poor.

Are Government Policies Helping the Economy?

This is really in the eye of the beholder. We are shelling out benefits to help the poor which is putting strain on our economy. But these government policies are keeping people off the streets while they find work. Overall I advocate these program because the people need a bail out just as much as the corporations did a few years ago.

But with that said I don’t believe that this is positive overall for our economy. We need to get people back to work. When wages are down cost of living in every state increases and tax revenue goes down. We need to create a relocation program so people can move to where the work is. So for example if you own a house in Washington state and you find a good job in Texas you should be able to sell your house, be forgiven for what you owe or take that dept and transfer it to the new house. The government should in turn provide some assistance in relocation expenses and or down payment. You could also provide a similar service to renters. This concept could be applied much more intelligently then I have presented it. The point being is we could stop paying out benefits every month and spend it all in one shot while getting a return in tax revenue in the process. There are cities with good job markets out there. Texas is a great example of a state with a strong job market combined with affordable housing.

]]> http://www.costoflivingbystate.org/cost-of-living-news/cost-of-living-by-state-americans-poverty-line.html/feed 1 http://www.costoflivingbystate.org/cost-of-living-news/california-government-retirees-may-not-lose-health-care-benefits.html http://www.costoflivingbystate.org/cost-of-living-news/california-government-retirees-may-not-lose-health-care-benefits.html#comments Thu, 24 Nov 2011 00:00:19 +0000 Bill http://www.costoflivingbystate.org/?p=432 Continue reading →]]>

The California Supreme Court ruled Monday that health benefits for government retirees in Orange county may not be eliminated. That implied contracts covering retiree healthcare benefits will be honored.

Unfortunately this is not the only instance of our government trying to rob our honored citizens of their medical benefits. Other cities, counties, and states in our great nation are regrettably following suit. This article focuses on the Sacramento County case.

The state of California’s attempt to eliminate Health care benefits in Sacramento County

In 2010 the Board of Supervisors in Sacramento County reduced the health care subsidy by $100 per month. This cut maximum benefits down from $244 to $144 a month. This year Sac County put further strain on the cost of living by setting the maximum to $80.64 per month. I would like to hear from our honored readers how much they pay on average for health care expenses. Please post your comments they are as always greatly anticipated.

The Counties Argument

Starting in 2003 the health care policies state that subsidies are not intrinsic. Meaning that there is no explicit contract in Sacramento County to provide county retirees any health care benefits. This is in stark contrast to the Orange County ruling which is over premiums not subsidies. According to the county the policy states that the retiree’s health care program is not a contract thus doesn’t provide any vested entitlement to benefits hence void of regulation.

Guess we should of read the fine print.
Where is the Governator when we need him. Is this astalavista healthcare benefits?

Supreme Court Ruling

Justice Marvin R. Baxter wrote
“Under California law, a vested right to health benefits for retired county employees can be implied under certain circumstances from a county ordinance or resolution,”

It is the hope of all California government retirees that this ruling will quell the counties attempts to reduce health care benefits and make sure they last a lifetime. Judges are government employees too and I’m sure this will aid in the association’s case. Times being as difficult as they are does not excuse this injustice.

The Affect the ruling has on California Retiree’s Cost of living

What is at stake here is obvious. It is hard enough for our seniors already. With the rising cost of living in California, most evident prescription drugs it is difficult if not impossible for our seniors to make ends meet. Why does our government continue to pick on them?

The Future of this case

Arguments to dismiss the suit against Sacramento County are scheduled for Tuesday. The case will go back to the U.S. 9th Circuit Court of Appeals. Where the honorable Judge Kimberly J. Mueller hear the case.

What is California’s Cap & Trade program?

The California Air Resources Board and industry stakeholders worked together to design the California cap and trade program.

The Cap and Trade program is a strategy to limit California’s GHG emissions. Under this program an overall limit on emissions will be capped in certain sectors. Those sectors under the cap will be able to trade allowances to emit GHG. The Cap and Trade program will monitor the trading of these permits. The overall goal is to reduce pollution without hurting businesses. The program is set to launch in 2012.

The Costs

Many critics of the Cap & Trade program state that this will raise energy costs for consumers. A few people suggest that this will create favoritism towards some businesses while alienate others depending on how much they contribute to political campaigns. Will is conflict of interest end up weakening competition hence raising energy costs?

The simple fact is that this will not lower the cost of doing business. Since when does any addition expense accomplish that. It would be counter intuitive to thing so. And staying in this line of thinking it would be equally so, to imagine that is will not raise the cost of living in California.

Supporters argue that companies will work hard to reduce their carbon foot print to limit the need for allowances. This gives them the ability to invest allowance sales into more energy efficient products that will in turn reduce consumer bills. Do we know of a company that passes a surplus in profit margins to its customers?

The Bigger Question

Will it actually work?

In the past caps were set so high that companies had no problem reaching them. This program was designed to address that issue. In the six-year-old European Union market carbon allowances traded at $21 per metric ton of carbon dioxide. This is $3 more than the current price on emissions in California.

This program will help put California on the path to meet its goal of reducing GHG emissions to 1990 levels by the year 2020, and ultimately achieving an 80% reduction from 1990 levels by 2050.

Read more on the cost of living in California

The cost of living in Hawaii is as steep as the money it takes to run it. This is according to recent reports and a statement made by the Department of human services. The decision to cut vital welfare programs has received a mixed reaction among citizens and community leaders alike.

Cutting benefits to citizens whom aren’t encouraged to find work is one thing. Reducing benefits to what looks like on paper a program that encourages working is another.

In The News

Hawaii until recently has been the nation’s biggest spender in welfare benefits.
Budget cuts are forcing the state to eliminate programs to welfare recipients.
Temporary assistance to needy families (TANF) and temporary assistance to other needy family (TAONF) are the programs on the chopping block.

What is TANF and TAONF?

TANF and TAONF are intended to provide assistance for those who can’t work and provide incentives for those whom are able to work to find work. These programs offer money to adults and children for a period of 5 years once in a lifetime. TANF & TAONF are unique in the fact that they encourage people to rely on themselves to sustain and makes it pay to work. This is accomplished by providing child care support, enforcing penalties, and tapering off benefits when work is found. This is opposite of most programs that cut off benefits completely.

Reduced Benefits

Welfare benefits are being reduced due to state mandated budget cuts. Hawaii spends $5.4 million on programs designed to aid recipients in finding work. According to Hawaii’s Department of human services these programs will be terminated at the end of this month.

Historical Data

Eligibly for 539 families expired in late 2001, in 2003 their were over 1200 cases that reached the five year limit. By year 2004 852 cases expired and 708 in the year 2005.

The Cost of living in California is declining. This is according to the U.S Census Bureau.
Over 49 million Americans are forced to live in poverty. On the west coast alone 2.8 million have sunk beneath the poverty line. California is a large contributor to this total. California’s poverty rate has gone up 4% this quarter. This is due to rising unemployment and a increased cost of living. The national poverty rate is now at %16. California sits above twenty percent.

Cost of living in California Increases

In California jobs that do exist are low paying. Unemployment benefits are not equal to lost wages. The rising cost of medical care is putting a strain on Californians. This is not taking into consideration California’s high housing costs.

Housing Costs

Many citizens are finding it nearly impossible to afford housing. In urban areas a one bedroom apartment can cost $800. Folks in California are finding it hard to get by on meager unemployment checks.

Congressional hearings are underway to address this issue. Bigger loan limits expired on Oct. 1st. Congress is proposing a measure that would allow Fannie Mae and Freddie Mac to insure single family mortgages up to $729,750. The current ceiling is $625,500. This proposal is aimed where cost of living is high. Places such as California.

California’s Job Market

With the decline in job growth the cost of living in California has risen.
California has lost 306,000 job since 2007. Los Angeles County was hit the hardest losing 113,000 jobs.

Medical Care

With the blessing of the Obama administration California is cutting over a hundred million dollars from Medi-Cal. Expects state that with less funding Doctors may refuse to see patients covered under Medi-cal. Overall the reduced funding will save the state $623 million. Currently California spends $14 billion on Medi-care.

This will be a huge blow to Californians already struggling with high medical expenses. Especially so for seniors. It is not clear but a factor could be the presidents push for Obama-care.