The Retirement Blues

Advocacy groups like the A.A.R.P. have long been on the leading edge of the fight for the rights of older Americans. The right to self-determination, driving privileges and, especially, the right to work as long as one is able are all cornerstones of that fight. Americans, however, have long cherished the right to retire from one’s lifetime labor before injury or sickness forces the choice upon them. Retirement security is therefore a principle concern of our democracy, and so remains a political hot potato.

We live at a time when the war on the working class has brought pensions squarely into the cross-hairs of politicians and pundits looking for scapegoats and an easy fix. In the past, it was the working poor and jobless who bore the brunt of the economic blame that so often circulates during tough times. Today, working class Americans with careers in industry, law enforcement, fire protection, the military, education, and state and municipal services are being attacked because they earn decent wages and benefits that include retirement security. This malevolent scrutiny is added to the cynical attacks mounted by Wall Street interests on Social Security. The promise of dignified retirement that is so critical to the American way of life is under dire threat.

The Rational Middle has profiled the assault on Social Security in a number of posts, but the subject has flared anew in the aftermath of the Obama/Republican tax deal. The conservative argument against Social Security always gains traction during times of deficit spending, despite the fact that Social Security is that rarest of creatures in federal government; a program paid for in its entirety by a specific tax. After the deal that extended the Bush tax cuts and unemployment insurance however, it was liberal critics screaming (literally, in some cases) about the renewed threat to our retirement security. This entire thread takes the sorry American habit of circular argument to a new depth.

In its history, one adjustment has been necessary (per the Greenspun Commission in the 80’s) to keep the New Deal era Social Security program solvent. Currently, the program will be solvent at full benefits levels through 2037, and at 75% until late in the 21st Century. The tax deal changes nothing. Shortfalls in FICA and payroll tax collections are scheduled to paid to the trust fund from our nation’s general fund; this is the reason that those costs expand our deficit. The only danger to the nation’s only safe retirement system is that posed by the cynical and unsubstantiated attacks by the deficit hawks…the facts are most assuredly not on their side.

The simple fact of the matter is that Social Security provides a low risk, low administrative cost foundation for the American Dream. It is paid for via the conservatives Holy Grail, the flat tax, as every worker (legal or not) working for an employer who follows the law pays FICA on the first $106,000 of their income (which is ALL of their income for 90% of American households). It is exposed to political attacks largely because of its perceived size and the fact that the $2 trillion in annual FICA contributions represent an irresistible temptation to Wall Street fat-cats drooling over the fees they could steal from the total.

Once again, Americans are faced with what should be an easy choice; stand for a strengthened (if not expanded Social Security), or believe those reckless fools who said “Trust me…Wall Street investment is safe.” Are we seriously going to continue to give Wall Street interests and the politicians they own credibility and power? The stock markets are an important component in the American economic engine, but the retirement security of the American working class…the consumers and producers who create the wealth consolidated by stock markets, must take precedence.

The Rational Middle is listening…