Hasta La Gadget!

Since the late 1970s, economic forces have enabled the privileged few to take home more and more in the form of income and profits, while the wages of average workers have stagnated. Rather than combat this trend, public policies have strongly reinforced it. This has both hurt Social Security’s finances and created a retirement income crisis looming for today’s workers.

In response to the highly unequal 21st century economy, Congress should reform Social Security by asking high earners to contribute to Social Security on all of their income at the same rate as other Americans. Such reforms do not amount to ‘soaking the rich’, who would indeed receive higher Social Security benefits as a result; rather, they are part of a necessary rebalancing of our public policy framework after decades of upward redistribution.

Income Inequality Has Hurt Social Security’s Finances
Social Security payroll taxes are levied only on wages up to the Social Security tax cap, currently $118,500. Yet from 1979-2012 all aggregate income growth has gone to the top 10 percent of the income hierarchy. With nearly all aggregate income growth occurring outside of the Social Security system, it is unsurprising that Social Security’s finances have suffered. Indeed, slow and unequal wage growth has caused a significant share – at least one-third and probably more – of the long-term shortfall in Social Security which has emerged since the 1983 reforms.

Income, Capital-Gains and Estate-Tax Cuts Have Increased Inequality
U.S. tax policy reforms – far from reducing market income inequality – have increased it. Top marginal income-tax rates, as well as taxes on unearned income paid primarily by the wealthy, have been dramatically reduced since 1980. Among the 32 OECD countries for which data are available, the U.S. now ranks 28th in terms of the effectiveness of its policies in reducing income inequality.

Implications of Inequality for Social Security Policy
There are several implications of rising inequality for Social Security policy. First, in response to slow and unequal wage growth, Congress should:

Expand Social Security benefits
While Social Security benefits may have been adequate in the 1980s, slow and unequal wage growth, cuts to Social Security benefits, and the collapse of the other two legs of the retirement stool make benefits inadequate today and in the future, indicating a strong need to expand Social Security beyond its current average benefit of $15,640/year.

Eliminate the Social Security tax cap
Social Security’s revenue base should be broadened to encompass high incomes. The payroll tax cap was already eliminated for Medicare Part A (hospital) insurance in 1994, without any clearly discernable impact on the economy. Sen. Sherrod Brown’s (D-OH) “Strengthening Social Security Act” is one of several proposals in Congress that would scrap the Social Security tax cap to fund expanded benefits and extend the system’s solvency until late into this century.

Stimulate wage growth
Stronger long-term real wage growth – 1.76 percent per year, rather than the currently projected 1.13 percent – would reduce Social Security’s long-term shortfall by over one-third (35 percent). Congress should invest in infrastructure and in education and training, raise the minimum wage, and make it easier for workers to bargain for fair wages. Each of these measures would lessen inequality and thereby improve Social Security’s finances.

In response to rising wealth inequality, Congress should:

Incorporate high-earners’ investment income into Social Security
The Affordable Care Act has already set the precedent for subjecting investment income to social insurance contributions with its new Medicare Net Investment Income Tax (NIIT). Starting in 2013, it levies a 3.8 percent tax on the unearned income of those with modified adjusted gross income (MAGI) above $200,000 ($250,000 for couples). Both to reduce income inequality, and to keep pace with overall income growth, Social Security should also incorporate the investment income of high earners into its contribution and benefit base.

Restore the estate tax to its 2000 level and dedicate it to Social Security
From the late 1930s through the 1970s, the top federal estate tax rate in the United States was always 70 percent or above, with a low exemption amount. The exemption amount in 2015 is $5,430,000 ($10,860,000 per couple). At such a high exemption amount, fewer than 2 of every 1,000 estates – less than 1/50th of one percent of estates – now owe any estate tax. Earmarking these revenues for Social Security is supported by both the history of the Social Security program and the particular nature of the estate tax (a fuller account of this can be found here).

The combined effect of scrapping the cap and incorporating capital income into Social Security would simply be that high earners would contribute to Social Security on all of their income at the same rate as the typical worker does. Strengthening Social Security to better reflect changes in our economy and society would make it the cornerstone for middle class retirement security in the 21st century.

No charges will be filed against three Los Angeles police officers who fatally shot an unarmed, mentally ill man on live television following a high-speed chase, the city’s top prosecutor said.

In a letter dated Jan. 29, first reported by The Associated Press, LA County District Attorney Jackie Lacey says her office found “there is insufficient evidence to prove beyond a reasonable doubt” that Officers Armando Corral, Leonardo Ortiz and Michael Ayala “did not act in self-defense and in defense of others” during the fatal 2013 shooting of 51-year-old Brian Beaird, a National Guard veteran.

Beaird’s erratic, hour-long sprint across the region in a Corvette was “tense and chaotic” and gave officers reason to believe he was a threat, Lacey wrote in the letter to the LAPD. Officers said they thought Beaird was reaching under the seat during the chase and saw him reach for his waistband at least twice as the pursuit climaxed with a crash and standoff, Lacey said. No weapon was recovered.

“Given the fact that the entire incident from Beaird exiting the car until the shooting ceased lasted less than six seconds,” Lacey concluded, “such defense testimony would create reasonable doubt as to whether the officers were unjustified in continuing to shoot after the suspect had turned and even fallen to the ground.”

The DA’s decision not to press charges comes after LAPD Chief Charlie Beck said the officers’ use of force was “not justified.” Beck detailed the findings in a 2014 report following an internal investigation.

The three officers have been relieved of duty without pay and continue to face internal discipline “that may be as much as termination,” LAPD Commander Andrew Smith told HuffPost.

On the night of Dec. 13, 2013, Beaird led law enforcement a high-speed pursuit, swerving into oncoming traffic and failing to obey patrol vehicles with sirens and lights. The chase ended when Beaird’s Corvette struck another vehicle in an intersection, spun out of control, and lodged between a tree and a light pole on Olympic Boulevard and Los Angeles Street. The other vehicle collided with a fire hydrant, shearing off the bolts securing the hydrant to the concrete and spraying a geyser of water into the air.

According to the police account, Beaird got out of the car, but ignored officers’ orders to get on the ground and show his hands. One officer, saying he believed he saw Beaird reaching for his waistband, fired a beanbag, causing Beaird to stagger and bend over. But he continued walking, and three officers opened fire when they said they believed he again was reaching for his waistband.

The cops fired a total of 21 shots, according to Beck’s internal investigation. Lacey’s letter noted that Beaird was hit with 13 rounds — three of which were fatal and, based on the bullet trajectories, were fired when Beaird was on the ground.

Beaird’s 80-year-old father, Billy Beaird, said he watched the chase and the hail of gunfire that killed his son live on television.

“They shot my son in cold blood,” Billy Beaird said after the city voted to pay a $5 million settlement to the Beaird family. “I would not trade my son’s life for every nickel in LA. He means that much to me. I could not believe what I saw.”

Read Lacey’s full letter, provided to HuffPost by the DA’s office, here.

MADISON, Wis. — The capitol dome here filled quickly Tuesday morning with workers in overalls and hard hats, their jackets signifying proud membership in Wisconsin’s blue-collar unions: steelworkers, ironworkers, pipefitters, carpenters, operating engineers. As a Senate committee hearing got underway upstairs — the first step in the fast-tracking of so-called right-to-work legislation in the state — the union members crowded the balconies and floor of the rotunda.

The call: “United we stand!”

And the response: “Divided we fall!”

It’s been four years since Gov. Scott Walker (R) and Wisconsin Republicans enacted Act 10, a deeply divisive law that stripped most collective bargaining rights from public-sector employees. Membership in the state’s public-sector unions has since plummeted, as they can no longer effectively bargain for their members over wages and benefits.

Already diminished, the state’s labor movement is now watching, with near helplessness, as GOP lawmakers move legislation that would similarly weaken Wisconsin’s private-sector unions. To many inside the dome, there was the feeling of being kicked while down.

“It’s heartbreaking to see,” said Joe Mikich, a member of the United Food and Commercial Workers union who works at Wisconsin Vision, an eyeglass retailer, in Milwaukee. “We knew that this day was pretty much coming. We feel like our voice is being silenced. It’s just not right.”

Now on the books in 24 states, right-to-work laws create a serious problem for organized labor. Under U.S. labor law, a union that wins an election has to represent all the workers in the bargaining unit. Unions therefore prefer contracts in which all workers are required to pay fees to the union to cover expenses. Right-to-work laws make such arrangements illegal.

After the laws are passed, many workers inevitably stop paying fees to their unions, which have to keep representing their interests anyway. Unions derisively call this free-riding or free-loading. As funding drops, unions become less effective in bargaining for their members and organizing to attract new ones.

“Representation costs money,” said Dru Zellmer, an executive board member of Communications Workers of America Local 4603. “Take away 20 percent of our funding, and that’s 20 percent less we can do.”

Zellmer’s union represents many AT&T workers in the Milwaukee area who, as he says, “climb telephone poles out in traffic.” If union density falls as a result of right-to-work legislation, Zellmer said he and his colleagues will feel not only less equipped to bargain for pay and benefits, but also less safe at work.

“We really do have dangerous jobs,” Zellmer said. “It’s a concern that standards would fall in the industry.”

Despite past support for right-to-work, Walker had recently said that such legislation would be “a distraction.” He insisted, when asked about its prospects, that a right-to-work bill would never reach his desk as governor. He once even called private-sector unions “my partner in economic development.”

“And yet here we are,” said Mikich, the UFCW member.

But Walker, who is now laying the foundation for a White House run, confirmed through his office last week that he would sign the right-to-work bill if it were passed. Many of the union members inside the capitol on Tuesday recalled that Walker had once told a donor, in comments captured on audio shortly before Act 10 was introduced, that he would use a “divide and conquer” strategy against unions. The members said they understood right-to-work legislation to be the second piece of that equation.

Perhaps underscoring the effectiveness of that strategy, the large majority of protesters Tuesday appeared to hail from trade unions. Public-sector union members — teachers, firefighters and the like — were present, but they were harder to come by near the capitol.

Buzz Soderman, a retired teacher and the husband of an active one, said he has watched ruefully as dues-paying members have dropped out of his union since the collective bargaining rollback was passed. Holding a protest sign aloft on the capitol steps — “Act 10 lowered my standard of living, right-to-work will lower yours” — Soderman said he views the pending legislation as the fulfillment of divide-and-conquer.

“It saddens me tremendously,” Soderman said. “We had worked for all the things we got. And they [private-sector union members] worked for the pay and the benefits they got. They sacrificed over the years and built themselves up. To tear them down like this is not right.”

Given his presidential aspirations, Walker probably didn’t appreciate the timing of the right-to-work push. He had already cemented his reputation as a foe of unions with Act 10, and therefore had little to gain from the divisiveness of another battle with organized labor. But after the state Senate’s GOP leader, Scott Fitzgerald, said last week that he planned on fast-tracking the bill, Walker’s office said he would support it.

Fitzgerald appeared before the Senate’s labor committee on Tuesday, fielding sharp questions from Democrats about who was pushing the bill and why it had to be moved so quickly. Under the extraordinary session called by Fitzgerald, the measure will receive less scrutiny and deliberation than it normally would.

“Who’s asking for this?” asked Chris Larson, a Democrat. “Who exactly were you meeting with in the last two months who said this is something that needs to be passed?”

FItzgerald did not name any names. But he did say that neither unions nor Democrats should be surprised to see the bill now on the docket.

“This has been around prior to Act 10. It was underscored by Act 10, when many members were talking about including it,” Fitzgerald said. “Talk to some of the labor unions and ask them if they think right-to-work is something that’s been discussed.”

One Republican member of the committee recalled the heated demonstrations surrounding Act 10, saying a colleague of his was “cornered like a wounded coon” by protesters.

“You attack workers and then you’re surprised when they’re angry?” shot back Robert Wirch, a Senate Democrat.

Saying there’d been a threat to disrupt the hearing, Republicans cut short debate and abruptly passed the bill out of committee late Tuesday, sending it to the full Senate for a vote. Union members who’d waited hours to testify were turned away.

For all the turnout on Tuesday — there were at least a thousand protesters outside the capitol, where the head of the Wisconsin AFL-CIO and others spoke — Wisconsin unions have precious few political levers to pull at this point. Republicans enjoy solid majorities in both chambers of the statehouse, and if passed by the Senate on Wednesday, the bill will begin moving through the Assembly as early as Monday.

Despite some calls for a general strike, the chances of a mass walkout by the state’s unionized workers appeared dim on Tuesday. Several union members said that their locals had not seriously discussed it. Paul Secunda, a labor law professor at Marquette University Law School, recently told HuffPost that “if the union movement has any strength left, it’s in the power of withholding labor. If it’s not willing to do that, there’s very little power they have.”

“I’ve been trying to bring it to people’s attention,” Randy Bryce, an executive member of Iron Workers Local 8 in Milwaukee, said of a general strike. “It’s an extraordinary session, and the only way to beat it is using extraordinary measures. I’m not in a position to come out and call for one. But I’d love to see one.”

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