By GREGORY N. HEIRES
The people atop the economic pyramid of our grossly inequitable society now want to make ordinary Americans work longer until they can retire.
The Business Roundtable, which speaks for the CEOs of major corporations, is pushing for the retirement age of Social Security to be extended to 70—without raising what the wealthy contribute for the benefit.
Its proposal, announced Jan. 16, is part of a plan to roll back entitlements as the U.S. Congress and Obama administration prepare for negotiations over the country’s deficit and debt.
The proposal to increase the Social Security eligibility age comes as a retirement crisis looms for the Baby Boom generation. Already, many Americans are working longer because the 2008 economic implosion walloped their retirement savings accounts.
The jobs crisis and the replacement of traditional pensions–which guarantee a specific income during retirement–with 401(k) plans—which subject account holders to the uncertainty of the market—have left millions with inadequate funds. Now conservatives want to make the retirement burden for ordinary Americans even worse by unnecessarily pushing back the age to be able to receive Social Security.
The Business Roundtable, which says its members head corporations that together account for a third of the value of the stock market, also wants Medicare coverage to kick in at the same age.
“America can preserve the health and retirement safety net and rein in long-term spending growth by modernizing Medicare and Social Security in a way that addresses America’s new fiscal and demographic realities,” said Gary Loveman, chairman, president and chief executive of Caesars Entertainment Corp. Loveman chairs the Business Roundtable’s health and retirement committee.
The Business Roundtable’s plan would increase the age at which full Social Security benefits are paid when individuals reach 70 years of age. Currently, individuals born between 1946 and 1953 are eligible for full benefits at age 66. A change introduced during the Reagan administration increased the eligibility age for full benefits to 67 for individuals born in 1960 and thereafter.
A Politico-George Washington University poll of voters from “battle ground” states taken before the Business Roundtable unveiled its plan showed strong opposition to raising the retirement age. Sixty-four percent of the respondents were against the idea, and the opposition was greater among younger voters between the ages of 18 and 29 (66 percent) and those approaching retirement, ages 45 to 59 (69 Percent).
On the surface, raising the retirement age would seem to make sense. After all, people are living longer, so they should work longer and pay more for their Social Security benefit, right? Not exactly.
In recent decades, greater longevity has generally been restricted to professionals, well-educated people and the affluent. They tend to have better health care and lead healthier life styles than working-class people. They also tend to enjoy their jobs more and are willing to work longer.
On the other hand, the life expectancy of non-professionals hasn’t changed all that much in recent decades. So, raising the retirement age would be especially cruel to workers in physically-taxing jobs whose life expectancy is lower than that of professionals.
The Business Roundtable plan conveniently does not call for raising the cap on the Social Security payroll tax. Lifting the $113,700 ceiling on the payroll tax would help address concern of the long-term health of Social Security. In fact, according to the independent Congressional Budget Office, raising the ceiling would do three times as much as raising the retirement age to address the projected shortfall of Social Security, whose trustees estimate will no longer be able to full fund benefits by 2034.
Improved economic growth and better wages would also help by increasing the revenue stream into the system’s trust fund.
So, the alarm over Social Security’s financial health is itself exaggerated and appears to be a ploy to gut benefits. Whatever shortfall exists can be addressed without burdening the 99 percent, and progressives should fight to prevent Social Security from being a casualty of deficit and debt hysteria.
www.thenewcrossroads. Posted January 23, 2013
