Respectfully submitted by Lawrence E. Rafferty (rafflaw)- Guest Blogger
We have all heard the cries that so-called entitlement programs like Social Security need to be cut in order to “save” them from extinction. Now that I am 62 years of age, I have become more interested in the issue of Social Security’s solvency.
CEO’s have gotten involved in the process through the now infamous Fix the Debt campaign initiated and funded by Billionaire Pete Peterson and the parallel campaign started by the Business Roundtable. Both of these campaigns are supported by big business and CEO’s of large corporations with no concern where their retirement funds are going to come from.
“In the current budget debate, the loudest calls for Social Security cuts are coming from two lobby groups led by CEOs who will never have to worry about their own retirement security.
The report, titled Platinum-Plated Pensions: The Retirement Fortunes of CEOs Who Want to Cut Your Social Security,
points out that two organizations, Fix the Debt, a PR and lobby machine launched in 2012 and led by more than 135 CEOs of major corporations, and the Business Roundtable, a 40-year-old association made up of about 200 CEOs of Americas largest corporations, are involved in a protracted campaign aimed at cutting, and ultimately, gutting Social Security.
Platinum-Plated Pensions, written by Sarah Anderson, the Director of the Global Economy Project at the Institute for Policy Studies, and Scott Klinger, Director of Revenue and Spending Policies at the Center for Effective Government, found that the CEOs belonging to Fix the Debt and Business Roundtable are sitting on massive nest eggs of their own.” Bill Berkowitz
Maybe I am an exception, but I was amazed to read the report linked above to see just who is claiming that the only way that Social Security can be saved for us mere peons is by raising the retirement age and reducing benefits. Many of the CEO’s making this claim have millions in their own pension or retirement accounts.
“According to Platinum-Plated Pensions, The average Business Roundtable CEO has $14.5 million in his gilded nest egg, more than 1,200 times as much as the $12,000 median retirement savings of U.S. workers who are within 10 years of retirement.
Ten CEO members of the Business Roundtable (four of whom are also members of Fix the Debt) have corporate retirement plans valued at more than $50 million. Of these, three have retirement assets of more than $100 million.” Bill Berkowitz
Now, in all fairness, just because someone has no need for their Social Security benefits, it doesn’t automatically disqualify their opinions on the subject of improving Social Security for all of us. However, these CEO’s do not have a real stake in what happens to Social Security because if it exploded tomorrow, they still have millions in their own accounts.
The ideas that Fix the Debt and the Business Roundtable have offered do nothing to make it more equitable or make Social Security work better for all retirees. Their idea of a “fix” is to delay benefits and force poor and middle class workers to stay in the work force even longer.
They even claim that raising the minimum retirement age to 67 is necessary because we are all living longer. Even that claim is suspect. One economic expert has brought some sunlight to the living longer claim.
“Before I get there, however, let me briefly take on two bad arguments for cutting Social Security that you still hear a lot.
One is that we should raise the retirement age — currently 66, and scheduled to rise to 67 — because people are living longer. This sounds plausible until you look at exactly who is living longer. The rise in life expectancy, it turns out, is overwhelmingly a story about affluent, well-educated Americans. Those with lower incomes and less education have, at best, seen hardly any rise in life expectancy at age 65; in fact, those with less education have seen their life expectancy decline.
So this common argument amounts, in effect, to the notion that we can’t let janitors retire because lawyers are living longer. And lower-income Americans, in case you haven’t noticed, are the people who need Social Security most.” Paul Krugman
While I am hoping Mr. Krugman is correct that lawyers are living longer, his evidence seems to suggest that the Fix the Debt and Business Roundtable people are all wet. Could those millionaire and Billionaire CEO’s have some ulterior motive? Could the CEO’s efforts and money spent pushing their Fix actually be an attempt to prevent the country from taxing the wealthy on all of their income or reducing or eliminating many of their tax benefits that harm the economy and fatten their wallets?
I have often wondered why millionaires don’t have to pay Social Security taxes on all of their income like the rest of us who make less than the $113,700 maximum for 2013. When a CEO makes $20 million a year, that CEO pays Social Security taxes on the first $113,700. When someone makes $60,000 a year, they pay Social Security taxes on their entire income. Why shouldn’t Social Security taxes be paid on all income, no matter what the sources? Wouldn’t that be more equitable?
Mr. Krugman also suggests that part of the problem seniors are facing is that the 401k accounts that many of their employers intitiated have not earned what was necessary to retire on due to the market crash and employer greed and employees making poor financial decisions.
“Today, however, workers who have any retirement plan at all generally have defined-contribution plans — basically, 401(k)’s — in which employers put money into a tax-sheltered account that’s supposed to end up big enough to retire on. The trouble is that at this point it’s clear that the shift to 401(k)’s was a gigantic failure. Employers took advantage of the switch to surreptitiously cut benefits; investment returns have been far lower than workers were told to expect; and, to be fair, many people haven’t managed their money wisely.” New York Times
What do you think is needed to strengthen Social Security for all workers? Paul Krugman and many Senators like Sen. Elizabeth Warren agree that we should be talking about strengthening Social Security and not cutting it. Some of the CEO’s mentioned above who have millions in their own retirement accounts have actually run up deficits in their own employees retirement accounts, but yet they still claim cutting benefits and extending the minimum retirement age are the way to go.
“While gilding their personal pensions, many Roundtable CEOs have allowed massive deficits to grow in their employee retirement funds:
- Of the Business Roundtable CEOs whose firms provide pension funds for their workers, 10 have deficits in these funds of between $4.9 billion and $22.6 billion.
- The Roundtable CEO with the largest deficit in his companys worker pension fund is Jeffrey Immelt of General Electric, with $22.6 billion. Immelts personal retirement fund is worth more than $59 million, the sixth-largest among Roundtable CEOs.” Bill Berkowitz
Are these CEO’s merely doing an end run in an attempt to steer Social Security funds into the private sector? Are they trying to steer the discussion away from taxing more income to strengthen Social Security? What do you think and who do you believe?
Somebody help me out here. I thought Rand Paul was the son of Ayn Rand. Is that possible? The dogpac is arguing over this. Another dog thinks that Ron Paul is related to Peter, Paul and Mary. Is that one possible?
ayn rand personifies the neo-conservative libertarian capitalist. privatize the profits, socialize the losses.
when she was writing books and making money it was, it’s mine, all mine, you’re all moochers and takers, leave me alone.
but when she was old, sick, and alone she had no problem accepting help.
under another name.
SS is solid for 13 more years, removing the cap would fund it at expanded levels virtually forever.
Another point people arguing the ‘cut it’ to make it last point of view conveniently overlook is the distortion in the system the baby-boomers constitutes. We’ll all be dead in 20 years and have started dying already, that trend will only escalate so there will be a lessening of pressure on the system.
Another thing they forget or gloss over is that there are going to be a whole new generation of retirees that followed the rules and propaganda and invested their money in 401’s that will be periodically looted by the capital class, they’re going to need SS. Removing the cap now is a sterling idea.
How a civilized country does it:
“Switzerland to vote on $2,800 monthly ‘basic income’ for adults”
http://news.yahoo.com/blogs/sideshow/switzerland-to-vote-on–2-800-monthly-%E2%80%98basic-income%E2%80%99-minimum-for-adults-181937885.html
We of course have chosen to pour money down the Afganistan rat-hole for the next 10 years with no firm date for disingagement after that. Isn’t Congress supposed to vote on stuff like that?
Nick,
“Hate is irrational and self destructive. Don’t try and understand it, just pray for those consumed by it.”
So is ignorance, hubris; even patience at times.
Yes Elaine, thank you for the link!
Nothing irrational about pointing out Ayn Rand was a hypocrite in addition to her other personality defects.
Simply factual.
Thanks for the link Elaine.
Ayn Rand Railed Against Government Benefits, But Grabbed Social Security and Medicare When She Needed Them
At least she put up a fight before succumbing to the imperatives of the real world
http://www.alternet.org/story/149721/ayn_rand_railed_against_government_benefits%2C_but_grabbed_social_security_and_medicare_when_she_needed_them
Excerpt:
January 28, 2011 | Ayn Rand was not only a schlock novelist, she was also the progenitor of a sweeping “moral philosophy” that justifies the privilege of the wealthy and demonizes not only the slothful, undeserving poor but the lackluster middle-classes as well.
Her books provided wide-ranging parables of “parasites,” “looters” and “moochers” using the levers of government to steal the fruits of her heroes’ labor. In the real world, however, Rand herself received Social Security payments and Medicare benefits under the name of Ann O’Connor (her husband was Frank O’Connor).
As Michael Ford of Xavier University’s Center for the Study of the American Dream wrote, “In the end, Miss Rand was a hypocrite but she could never be faulted for failing to act in her own self-interest.”
Her ideas about government intervention in some idealized pristine marketplace serve as the basis for so much of the conservative rhetoric we see today. “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand,” said Paul Ryan, the GOP’s young budget star at a D.C. event honoring the author. On another occasion, he proclaimed, “Rand makes the best case for the morality of democratic capitalism.”
“Morally and economically,” wrote Rand in a 1972 newsletter, “the welfare state creates an ever accelerating downward pull.”
Journalist Patia Stephens wrote of Rand:
[She] called altruism a “basic evil” and referred to those who perpetuate the system of taxation and redistribution as “looters” and “moochers.” She wrote in her book “The Virtue of Selfishness” that accepting any government controls is “delivering oneself into gradual enslavement.”
Rand also believed that the scientific consensus on the dangers of tobacco was a hoax. By 1974, the two-pack-a-day smoker, then 69, required surgery for lung cancer. And it was at that moment of vulnerability that she succumbed to the lure of collectivism.
Evva Joan Pryor, who had been a social worker in New York in the 1970s, was interviewed in 1998 by Scott McConnell, who was then the director of communications for the Ayn Rand Institute. In his book, 100 Voices: An Oral History of Ayn Rand , McConnell basically portrays Rand as first standing on principle, but then being mugged by reality. Stephens points to this exchange between McConnell and Pryor.
“She was coming to a point in her life where she was going to receive the very thing she didn’t like, which was Medicare and Social Security,” Pryor told McConnell. “I remember telling her that this was going to be difficult. For me to do my job she had to recognize that there were exceptions to her theory. So that started our political discussions. From there on – with gusto – we argued all the time.
The initial argument was on greed,” Pryor continued. “She had to see that there was such a thing as greed in this world. Doctors could cost an awful lot more money than books earn, and she could be totally wiped out by medical bills if she didn’t watch it. Since she had worked her entire life, and had paid into Social Security, she had a right to it. She didn’t feel that an individual should take help.”
Rand had paid into the system, so why not take the benefits? It’s true, but according to Stephens, some of Rand’s fellow travelers remained true to their principles.
Gosh, all those hateful people who want seniors to live with dignity.
Bron, Hate is irrational and self destructive. Don’t try and understand it, just pray for those consumed by it.
But Annie! It wasn’t “taking” when Ayn did it. She was reclaiming money stolen from her. Isn’t that right, Bron?
Bron, he was able to save it for college, which helped him and probably would help some kid whose father wasn’t an attorney even more. Ayn Rand his role model, thought such safety nets as SS and Medicare were “taking” from the makers. She ended up taking Medicare when she needed it, didn’t she?
Annie:
it just says he got it for 2 years. I dont think that is much of a story.
It is puzzling to me that some suggest that one must “care for” elderly parents. So many assumptions, as if many people have the means to do so. Even at the present retirement age, many people must continue to work just to support themselves. They have neither the time nor money needed to support parents. Elderly parents can move in with adult children? Do the parents even live in the same state? Who will provide daily care if the adult children are at work all day? What about elderly parents, like mine, who treasured their independence, which was made possible, in part, by Social Security retirement benefits?
Paul Ryan: No Friend to SS
Rebel Without a Pause, how SS helped Paul Ryan and how he would like to deny others the same benefit.
Does this help Bron?
Annie:
what is the story? You arent really saying anything. What are the particulars?
Bron wrote to Annie: “what is the story? You arent really saying anything. What are the particulars?”
Bron, maybe this article will help.
Is Paul Ryan a hypocrite?
http://www.economist.com/blogs/democracyinamerica/2012/08/paul-ryans-randianism
I think Social Security needs to be saved in the manner that Paul Ryan wants to save it, but those on the left lie and claim he wants to dismantle or destroy it.
Even if someone railed for it to be abolished but paid all their life into Social Security and then received checks when they retired, I would not call that hypocrisy. He was forced to support a system he did not believe in, and he did so faithfully, so why should he not receive benefit from it? That’s what it was created for.
The objection to Social Security is not a moral one. It is an objection based upon financial wisdom. Social Security is a quasi-pyramid scheme that is not sustainable. If a private sector corporation attempted a Social Security method of paying for retirement, the CEO’s would be imprisoned like Bernie Madoff was. But because government does it and can force future generations to contribute, the powers that be consider it an acceptable pyramid / pay-as-you-go system.
I used to play in a band with some Englishmen. They used to sing the Boomerang wont come back song. I looked up the lyrics on the Dogalogue Machine and here they are:
Songwriters: DRAKE, DIAMOND
In the bad, bad lands of
Australia many years ago
The Aborigine tribes were meeting
Having a big pow wow
We’ve got a lot of trouble, Chief
On account of your son, Mac
My boy Mac, what’s wrong with him
My boomerang won’t come back
Your boomerang won’t come back
[CHORUS]
My boomerang won’t come back
My boomerang won’t come back
I’ve waved the thing all over the place
Practiced till I was black in the face
I’m a big disgrace to the Aborigine race
My boomerang won’t back
I can ride a kangaroo (yeah, yeah)
Make kinkijou stew (yeah, yeah)
But I’m a big disgrace
To the Aborigine race
My boomerang won’t come back
They banished him
From the tribes then
And sent him on his way
He had a backless boomerang
So here he could not stay
This is nice, isn’t it
Getting banished at my time in life
What a way to spend an evening
Sitting on a rock in the
Middle of the desert with
Me boomerang in me hand
For three long months he sat there
Or maybe it was four
Then an old, old man
In a kangaroo skin came
A-knocking at his door
I’m the local witch doctor, son
They call me George Alfred Black
Now tell me, what’s your trouble, boy
My boomerang won’t come back
Your boomerang won’t come back
[Repeat CHORUS]
Don’t worry, boy
I know the trick
And to you, I’m gonna show it
If you want your
Boomerang to come back
Well, first you’ve got to throw it
Oh, yes, never thought of that
Now then, slowly back and throw
[Repeat CHORUS]
I can ride a kangaroo (yeah, yeah)
Make kinkijou stew (yeah, yeah)
But I’m a big disgrace
To the Aborigine race
My boomerang won’t come back
rafflaw:
SS’ s insolvency is a prime example of what happens when we substitute popular politics for sound economics.
Politicians raised benefits because it won them votes. But those benefit increases were not actuarially sound.
Those same politicians who gave out their largesse never got around to addressing the fundamental problem – people were taking out more than they put in.
The generation just before ours made out well – on average they took out far more than they paid for (and they are still taking out).
But that is the past.
While I sympathize with your anger/concern (I am in your demographic and I too worry about retirement), I don’t think that the solution lies in robbing a few to subsidize the many.
You talk about that CEO making $20MM; is it fair to tax him $3MM in SS taxes? How much will you let him collect in annual benefits?
We have gone down an evolutionary rat hole.
We trusted government and gave it extraordinary power based on the promise that they (government and politicians) would take care of us.
Politicians blew it (and people were happy to take benefits that they hadn’t paid for) and now your answer is to give those politicians even more power to commit an injustice in order to ameliorate their previous mistakes.
The Founding Fathers warned us of the tyranny of the majority; remember, those same politicians who blew it before will probably blow it again.