Warren Buffett has a proposed amendment that he believes – if adopted – would cure Congress’ fiscal problems. In a recent interview with CNBC, Buffett offered one of the best quotes about the debt ceiling that I have heard when he said he “could end the deficit in five minutes.” He told CNBC that “you just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.” While that seems drastic and not something that members of Congress would “touch with a ten-foot pole,” it would guarantee a balanced budget. The Buffett plan, labeled the Congressional Reform Act of 2011, would do the following:
• There would be no tenure and no pension for members of Congress. A member would collect a salary while in office and receive no pay when they are no longer in office.
• Members of Congress (past, present & future) would participate in Social Security. All funds in the Congressional retirement fund would move to the Social Security system immediately. All future funds would flow into the Social Security system, and members of Congress would participate with the American people. The fund couldn’t be used for any other purpose.
• Members of Congress could purchase their own retirement plan, just as all Americans do.
• Members would no longer vote themselves a pay raise. Congressional pay would rise by the lower of CPI or 3%.
• Members of Congress would lose their current health care system and have to participate in the same health care system as the American people.
• Congress must equally abide by all laws it imposes on the American people.
• All contracts with past and present members of Congress would be void effective January, 1, 2013. The American people did not make these contracts. Members of Congress made all these contracts for themselves.
Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators. Buffett believes our legislators should serve their terms, then go home and back to a real job. While much of the above seems radical, maybe its being proposed is what it will take to wake up Congress. The Buffett proposal has no chance of passage since it would have to first go through Congress before going to the people for a vote. But if the American people rise up and demand change – and that change being one that would take the big corporate money out of Congressional races – something good would have to happen in Congress. While it might not be the “Buffett plan,” I believe it would be good for the 99% of Americans.
Source: Warren Buffett Email
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