Look out, people, Congress is launching an all-out attack on the retirement security of current and future retirees.
Under the guise of cutting federal and state budget deficits, there is a an all-out assault on Social Security, Medicare and public pension plans – all programs that are central to providing economic well-being to millions of Americans.
Cuts in these programs would only exacerbate another kind of deficit facing the nation – the Retirement Income Deficit. According to the Center for Retirement Research at Boston College, the $6.6 trillion Retirement Income Deficit represents the gap between what people have saved as of today and what they needed to have saved in order to maintain their standards of living in retirement.
In something akin to attacking mom and apple pie, the first attack was leveled against Social Security, the nation’s strongest anti-poverty program. Never mind the fact that Social Security doesn’t contribute a single penny to the country’s current fiscal crisis. If Congress makes cuts to Social Security – either by tinkering with annual cost-of-living adjustments or by raising the retirement age – Congress won’t be doing anything to fix the nation’s Retirement Income Deficit; they’ll just be making it worse.
The second line of attack comes as Congress has its eye on Medicare with Congressman Paul Ryan’s proposal to privatize Medicare. According to New York Times columnist and economist Paul Krugman, the Ryan plan won’t control costs. Instead, the savings would come from denying Medicare to those most in need – those who couldn’t afford the extra costs. And while the privatization debate is on the back burner for the moment, cuts in Medicare would only make the Retirement Income Deficit worse.
And finally, some policymakers are aiming to dismantle public pension plans. Never mind the fact that pensions for workers in the public sector average less than $19,000 a year. As a result, these public sector workers are among the last retirees that are able to retire with a semblance of economic sufficiency in retirement in this country. There are many policymakers intent on turning these good, guaranteed plans into inadequate 401(k) plans. Again, these cuts would only make the Retirement Income Deficit worse.
What all these attacks have in common is that they are an assault on programs that have shared risk – in favor of do-it-yourself approaches where the risks are put onto already-vulnerable individuals.
What we need to do is strengthen Social Security and Medicare and do everything we can to keep public pension plans strong. At the same time, we should work to develop a universal, secure and adequate pension system on top of Social Security.
Retirement USA is a national initiative that is working for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. By developing 12 Principles for a New Retirement System, Retirement USA is working toward creating future system in which employers, workers, and the government share responsibility for the retirement security for all American workers.
This blog was written as part of Wider Opportunities for Women’s week-long blogging event. For more information, or to see other blogs that have been written as part of the event, visit the Wider Opportunities for Women blog at http://www.wow-eesi.blogspot.com.