“Throwing Their Own Under The Bus”: CEO’s With Massive Retirement Fortunes Push Social Security Cuts
With budget negotiations on the horizon, a buzz is building around Social Security, from Elizabeth Warren and other Democrats calling for an expansion of benefits to The Washington Post arguing that seniors must be sacrificed for the good of the “poor young.”
Two of the biggest players in the debate are largely behind the scenes: Business Roundtable and Fix the Debt, corporate lobbies that use deficit fear-mongering to sell benefit cuts. These groups are made up of CEOs of America’s largest corporations—people with retirement accounts that are more than 1,000 times as large as those of the average Social Security beneficiary.
Each of the 200 executives of Business Roundtable has retirement savings averaging $14.5 million, according to a new report from the Institute for Policy Studies and the Center for Effective Government. That’s compared to the $12,000 that the median US worker near retirement age has managed to put away. Once Business Roundtable CEOs start drawing Social Security themselves, they’ll be cashing a monthly check that is sixty-eight times larger than an ordinary retiree’s, ensuring that they’ll never bear the burden of the cuts they’re advocating.
“I find it hypocritical to see CEOs sitting on massive retirement fortunes of their own saying that the solution to the country’s fiscal challenge is to put an even greater burden on retirees, many of whom already struggling,” said Sarah Anderson, director of the Global Economy Project at IPS and one of the report’s authors.
One of those CEOs is David Cote, the vice-chair of Business Roundtable and a member of the steering committee for Fix the Debt. After eleven years at Honeywell where he’s now the chief executive, his retirement assets are worth $134.5 million. That means that as a retiree he’ll draw a monthly pension of nearly $800,000.
Cote is a deficit hawk, and claims to be worried about the long-term stability of Social Security. A member of the Bowles-Simpson commission and President Obama’s debt committee, Cote has called for $3 to $4 trillion in spending cuts over the next decade, “especially when it comes to entitlements.”
To make some of those reductions via cuts to Social Security, Business Roundtable has proposed raising the retirement age to 70, restricting benefit growth and changing the way inflation is calculated in a way that amounts to a benefit cut for seniors. (Read George Zornick on why this change, called Chained CPI, is a bad deal.) At the same time, Business Roundtable and Fix the Debt are calling for more corporate tax breaks.
“If Congress approves of proposals like ones that Business Roundtable are pushing, we could see severe cuts that could mean the difference between any kind of dignified retirement and absolute poverty,” Anderson said. Two-thirds of retired Americans rely on Social Security for the majority of their income, and more than 40 percent would be in poverty without those benefits.
These CEOs aren’t just trying to short the average American retiree; they’re throwing their own under the bus. While raising alarm about the federal debt, Business Roundtable CEOs have run up massive deficits in their employees’ pension funds. According to the report, ten companies led by members of Business Roundtable have shortfalls in their employee pension funds of between $4.9 and $22.6 billion. The largest of those belongs to General Electric, run by Business Roundtable and Fix the Debt member Jeffrey Immelt, the prospective beneficiary of a $59.3 million retirement fund.
GE stopped offering traditional pension plans for new employees in 2011, forcing workers to switch to 401(k) plans. Many other companies have shifted the burden of retirement savings to their employees in this way in recent years, and that’s been a significant driver of the retirement crisis. Just 18 percent of workers can expect traditional pensions today, compared with 38 percent in 1985. Instead of getting a fixed check, retirees are at the mercy of the market—making the assurance of Social Security benefits even more essential. But Business Roundtable continues to put the responsibility for the retirement crisis on retirees themselves. “[T]rue retirement security will be achieved only if Americans save more,” reads the group’s 2013 CEO Growth Agenda.
Saving more is an increasingly unworkable solution for the millions of workers whose wages and benefits are being undercut by some of the same CEOs directing them to do so. As the report lays out, many of the most effective ways to strengthen Social Security involve asking more of executives, not employees. Eliminating the cap on wages subject to Social Security taxes (currently set at $113,700) would eliminate 95 percent of the projected shortfall for seventy-five years, according to the Congressional Research Service. That’s three times the deficit reduction achieved by raising the retirement age to 70. Subjecting stock-based compensation to Social Security taxes would raise billions more.
Don’t expect to hear about those proposals from Business Roundtable, however. “I do think that it is a real weakness of these corporate lobby groups, that they’re making the public face of the agenda to cut Social Security these CEOs that are sitting on massive nest eggs of their own,” said Anderson. “It undercuts their credibility and influence in these debates, and I’m hoping it will make it difficult to achieve the cuts they’re proposing.”
By: Zoe Carpenter, The Nation, November 19, 2013
“Getting Secret Money Out Of Campaigns”: It’s In The Public Interest To Disallow Sleazy Secret Money In Campaigns
The Internal Revenue Service spent years averting its eyes while clever campaign operatives abused the tax code for political purposes. Advocacy groups, mostly on the right, wanted to run attack ads while concealing the source of their money, and they came up with a brilliant way to do it: claim to be “social welfare” groups, which are allowed to hide donors.
Federal statutes say these groups can only engage in social welfare activity, but the tax agency decided political activity was fine as long as it wasn’t the primary purpose of the group. That helped create the torrent of secret money that poisoned the last few federal elections. The I.R.S. never explained, though, what kinds of activities are considered political, or why these groups, also known as 501(c)(4)’s, should be allowed to participate in campaigns at all.
On Thursday, long after the abuse became too rampant to ignore, the I.R.S. took the first tentative steps at reining in the problems it helped create. It proposed a definition of “candidate-related political activity,” an important starting point in determining what tax-exempt groups are really allowed to do. But it will have to do much more than that if it wants to be taken seriously as a regulator on this battlefield.
According to a press release from the Treasury Department, the agency said the new definition of political activity would include ads or other communications that clearly advocate for a candidate or party, or ads that mention a candidate within 60 days of a general election (30 days for primaries). That’s a good start for a definition, though 60 days is far too narrow a window — many of these attack ads air a full year or more before voting begins.
Once political activity is defined and separated from social welfare activity, 501(c)(4)’s will no longer be able to claim, as Karl Rove and others have, that “issue ads” mentioning candidates are for social welfare purposes. (These are the kinds of ads that say, “Dog-kicking is terrible. Call Senator Jones and tell her to stop doing it.”)
But a definition alone won’t do any good unless the I.R.S. tells these groups how much political activity is permitted. The ideal answer would be: zero. Social welfare groups have no business meddling in politics. Any group with a political interest has its own place in the tax code — they can be a 527 political organization. Those groups, which include political parties and official campaign organizations, also get tax exemptions, but there is one crucial difference: they have to disclose their donors, and 501(c)(4)’s don’t.
Conservatives immediately claimed that the I.R.S. was trying to take away their free-speech rights, which is laughable. Absolutely nothing is stopping advocacy from running ads, and the Supreme Court, in the Citizens United case, even granted corporations the right to make unlimited donations to independent groups that produce political ads. But there is no right to keep these donations a secret.
The Treasury announcement, tantalizingly, said the I.R.S. would consider comments from the public on how much political activity should be permitted for a social welfare group, suggesting that decision was farther down the road. It’s in the agency’s interest to end the confusion surrounding 501(c)(4)’s, which has led to charges that it has been arbitrary in its audits. But it’s in the public interest to do even more, and disallow sleazy secret money in campaigns.
By: David Firestone, Editors Blog, The New York Times, November 27, 2013
“A Pope’s Pointed Message”: Our Sacred Responsibility Is To One Another
“Some people continue to defend trickle-down theories, which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.”
That passage is not from some Occupy Wall Street manifesto. It was written by Pope Francis in a stunning new treatise on the Catholic Church’s role in society — and it is a powerful reminder that, however tiresome the political trench warfare in Washington may be, we have a duty to fight on.
The full implementation of Obamacare matters. Raising the minimum wage matters. Reforming a financial system that, as Francis noted, “rules rather than serves” matters. Hearing the anguished voices of those left hopeless by poverty matters; answering their pleas with education, health care and employment matters even more.
Francis, the first Jesuit and first non-European in the modern era to be named pope, clearly intends to make a real difference in the world — too much of a difference, it appears, for some conservatives: Sarah Palin, a born-again Christian who attends a nondenominational church, said recently that Francis’s open-arms attitude on social issues “has taken me aback.” Would that a few more words might take her all the way aback to the obscurity from which she came.
Francis’s remarks on economics and poverty came in a 50,000-word Apostolic Exhortation, released Tuesday, that gives the clearest vision to date of how he sees the church and how he intends to reshape it. In its boldness, the statement suggests that, just as Pope John Paul II played a political role in the fall of communism, so might Francis try to help shape events by obliging the faithful to recognize, and resist, a growing pattern of inequality throughout the world.
“To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed,” Francis wrote. “Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.”
Francis explicitly calls for “financial reform,” though he wisely does not lay out a policy agenda. But in a passage likely to make libertarians want to hide amid the dense thickets of Ayn Rand’s prose, where no light can penetrate, Francis wrote that “the private ownership of goods is justified by the need to protect and increase them, so that they can better serve the common good; for this reason, solidarity must be lived as the decision to restore to the poor what belongs to them.”
The basic positions Francis takes on economic and social justice are not new; all recent popes have expressed a similar critique of modern capitalist society, including John Paul II, whose views on poverty and the need for community are often conveniently overlooked by those who would paint him as Ronald Reagan in robes.
But no recent pope has been so forceful in denouncing the “idolatry of money” and making the inexorable rise of inequality one of the church’s central concerns. Francis intends his message to be heard. I hope leaders everywhere, and especially in Washington, are listening.
Jesus commanded his apostles to give to the poor. Yet many elected officials who claim to follow Jesus’s teachings are determined to keep the poor from receiving health care, food assistance, housing subsidies and a host of other benefits. Inequality is celebrated as a virtue. Life, we are told with a shrug, is sometimes unfair.
But for Christians, Francis reminds us, life is supposed to be as fair and compassionate as we can make it. Money is a false idol, a golden calf. Our sacred responsibility is to one another.
Amen, Your Holiness. Amen.
By: Eugene Robinson, Opinion Writer, The Washington Post, November 28, 2013
“Obamacare, A Question Of Morality”: Indifference To The Needs Of Others Is, Indeed, Immoral
There was a lot of bloviating about the Affordable Care Act on the talk shows last weekend. The Obamacare critics’ chief focus was the open-enrollment fiasco, the un-kept presidential promise and the millions of cancellation notices. Overlaying the palaver was the unrestrained glee of health-reform opponents.
The same weekend, in a section of our nation’s capital where pompous politicians and self-important opinion-makers seldom venture, the Affordable Care Act was the subject of thanks and praise at the First Baptist Church at Randolph Street and New Hampshire Avenue NW.
The talk-show criticism and the pulpit defense crystallized the Obamacare debate. Drawn into sharp relief is the struggle taking place in this country between doing what is right and good and an unashamed indulgence in the immorality of indifference.
The issue couldn’t be put more simply.
Forty-nine million Americans do not have health insurance. For many of them, the ability to deal with their illnesses and injuries depends on their ability to pay. Lacking the money, some of them just go without the care they need. Better to put food on the table for the kids than to check out that awful pain in the gut. Can’t afford to do both.
Which helps explain why the Affordable Care Act is viewed more kindly by the congregation at First Baptist Church, located a few miles from the shadow of the Capitol, than by those within the governmental structure.
First Baptist celebrates its 150th anniversary this year, having been founded in Southwest Washington by freed slaves in 1863 .
The church’s broad ministry includes parts of the city where good health care is an unaffordable luxury.
The Rev. Frank D. Tucker, who has been First Baptist’s pastor for nearly 38 years, used Sunday morning’s service to address Obamacare in terms its critics do not.
He announced that First Baptist, working with the city’s health-care exchange, DC Health Link, would host a health insurance enrollment fair on Saturday. He issued an emotional call to his congregation, young and old, to enroll in the program, resorting to language associated with the battle to win the right to vote.
Tucker noted the decades of unsuccessful efforts by several presidents to extend medical care to all Americans, including those living in dire circumstances beyond their control. Not sugar-coating the problems that President Obama has encountered in bringing about health-care reform, Tucker hammered at the obligation of the uninsured to enroll in the insurance program that Obama and other health-reform advocates have worked so hard to create. The Obama administration and its congressional supporters, Tucker observed, have been opposed every step of the way, taking a beating from people in Congress and around the country. Don’t let their sacrifices be in vain by sitting on your hands, he contended. Get enrolled, he declared.
And Tucker wasn’t even Sunday morning’s featured speaker. That honor fell to William P. DeVeaux, the presiding bishop of the African Methodist Episcopal Church’s second district, which covers the nation’s capital. DeVeaux’s presence, however, made Tucker’s appeal more compelling because DeVeaux’s message drew heavily on the scriptural command to serve others. It reinforced Tucker’s appeal to give all Americans the health security they deserve.
Tucker, DeVeaux and other members of the cloth are those whom the opponents of health-care reform are up against.
Gaining access to no-cost preventive services to stay healthy, which Obamacare provides, is not a sign of indifference. Neither is giving senior citizens discounts on their prescription drugs, or allowing young adults to get health insurance on their parents’ plan, or ending insurance company abuses. Those steps represent the caring actions of government.
In his apostolic exhortation this week, Pope Francis said he begged “the Lord to grant us more politicians who are genuinely disturbed by the state of society, the people, the lives of the poor!” Referring to the “excluded and marginalized,” the pontiff said that “it is vital that government leaders . . . take heed and broaden their horizons, working to ensure that all citizens have dignified work, education and healthcare.”
That, too, is where the health-reform resisters come up short. Their horizons are too narrow to notice or care about people who lead lives stunted by lack of opportunity. Stunted lives leave the critics unmoved.
And that’s why, when the bloviators take to the airways, preachers like the Rev. Tucker, Bishop DeVeaux and Pope Francis take to the pulpit.
They know that indifference to the needs of others is, indeed, immoral.
By: Colbert I. King, Opinion Writer, The Washington Post, November 29, 2013
“The Impoverished Republican Poverty Agenda”: Republicans Don’t Know Where They Are Headed Or What They Can Sell
What are Republicans for? We know they are against health-care reform. They voted en masse against it, shut down the government to stop it and have voted nearly 50 times to defund it. We know they are against government spending. They’ve voted for House Budget Committee Chairman Paul Ryan’s draconian budgets, which would slash spending so deeply that even some Republicans are in increasingly open revolt. But those budgets don’t go anywhere. So what do Republicans propose that actually addresses the challenges facing the nation or its people?
Republican leaders are clearly concerned that their policy house is largely vacant. In his dissection of the lost 2012 campaign, Republican National Committee Chair Reince Priebus noted that Republicans suffer a “major deficiency” – the “perception that the GOP does not care about people.” He urged a renewed effort to become “the champion of those who seek to climb the economic ladder.”
All that advice was lost in the anti-Obama venom that unifies Republicans. But after the government shutdown sent Republican poll numbers plummeting to new depths, a new effort – or at least a new public relations push – has been launched. The early reports make the administration’s botched health-care takeoff look smooth by comparison.
Politico noted that Republicans trooping into House Majority Leader Eric Cantor’s office received a paper titled “Agenda 2014.” The paper was blank. As of now, Politico reported, details are scant, but Republicans seem to be focused more on identifying the problems than the solutions. “The beginning should always be what are the problems we’re trying to fix,” said Republican policy chair James Lankford (Okla). Or as a GOP aide involved in the planning sessions was quoted: “Cantor wants to take us in a new direction, which is good. The problem is that we don’t know where we are headed, and we don’t know what we can sell to our members.”
Luckily, Cantor isn’t the only game in town. The Post published an adoring article on Ryan, Mitt Romney’s former running mate. The Post reported that Ryan and his staff have been “quietly” visiting “inner-city neighborhoods” and conservative think tanks, looking for creative ways to address poverty that can replace the “bureaucratic top-down anti-poverty programs” that Ryan’s budget would gut.
But the new ideas can’t include any new taxes or new spending – Ryan is staunchly against both. That doesn’t leave much. According to The Post, “his idea of a war on poverty so far relies heavily on promoting volunteerism and encouraging work through existing federal programs, including the tax code.” He’s repackaging private-school vouchers. And Ryan assumes that charity might take the place of the food stamps he’s cutting. “You cure poverty eye to eye, soul to soul,” he told a Heritage Foundation forum. “Spiritual redemption: That’s what saves people.” Prayer is good, but when it comes to public policies, as The Post story concluded, “Ryan’s speeches have been light on specifics.”
Some of those “specifics” are being offered by the tea party. Ryan and Cantor may be casting about for ways to look compassionate, but the tea party remains on the hunt. Politico detailed that Rep. Tim Heulskamp (Kan.) and a group of conservatives are gearing up for yet another assault on health-care reform. Assuming that the budget negotiations don’t reach an agreement by the December deadline, Congress will have to pass a continuing resolution by mid-January to keep the government open and funded. Huelskamp and his allies think that’s a perfect time to cut $20 billion out of Medicaid and transfer it to the Pentagon. That would eliminate Medicaid expansion – the one part of Obamacare that is working well – and placate Republicans worried about the cuts the military faces next year.
Cut health protection for the working poor and give the money to a Pentagon that is the largest center of waste, fraud and abuse in the federal government? Or slash food stamps while fending off every effort to close the tax dodges that allow companies like General Electric to avoid paying any taxes? The Republican “war on poverty” looks a lot like a war on the poor. It will take a lot of charity and volunteers and a lot more than “messaging” and “rebranding” to erase that indelible “deficiency.”
By: Katrina vandel Heuvel, Opinion Writer, The Washington Post, November 26, 2013
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