Budget cuts have lowered the nation’s average food stamp benefit to less than $1.40 per person per meal. Seventy percent of local agencies that service seniors have had to cut back on Meals on Wheels deliveries. “Sequestration” has also shut out 57,000 preschoolers from Head Start.
Next in the cross-hairs? Maybe the biggest of them all: Social Security.
|Millionaires are trying to convince us that we need shared sacrifice to save Social Security. What they aren’t saying is that lifting the cap on payroll taxes, and taxing those millionaires, would fund social insurance for the next 75 years.|
Average Americans, of course, don’t want Social Security cut. Over three-quarters of Americans, polling shows, oppose any Social Security cutbacks. If anything, average Americans have become even more committed to keeping Social Security whole—and for good reason. Social Security currently stands as America’s only retirement bedrock.
Not long ago, pensions delivered retirement security. But the nation’s biggest corporations have cut back on traditional pensions. In 1980, 89 percent of Fortune 100 companies guaranteed workers a “defined benefit” at retirement. By last year, only 12 percent offered that level of security.
Companies have replaced traditional pensions with 401(k)s, and many giant firms—like Walmart—don’t even offer anything. The predictable result? Among Americans between the ages of 50 and 64, the bottom 75 percent by wealth average just $26,395 in retirement assets.
Overall, says Boston College’s Center for Retirement Research, the nation’s “retirement deficit“—the difference between what Americans have saved up for retirement and what they need to maintain their standard of living once retired—now totals $6.6 trillion.
So amid all this retirement insecurity, who thinks cutting Social Security would be a good idea? The most relentless pushing has been coming from the nation’s “corporate statesmen.”
These corporate leaders—the nearly 200 CEOs who run the influential Business Roundtable and the over 135 chief execs who bankroll the two-year-old lobby group known as “Fix the Debt”—seldom ever mention “Social Security benefits” and “cuts” in the same sentence. They speak instead in euphemisms. The nation, they intone, cannot afford the current level of “entitlement” spending.
In the name of “saving” Social Security for future generations, these CEOs are urging Congress to enact “reforms” that range from lowering the annual Social Security inflation adjustment to upping the Social Security retirement age to 70. These two changes would slice the average Social Security beneficiary’s lifetime benefits by about 20 percent.
That prospect does not terrify America’s CEOs in the least. They are sitting on what figures to be the biggest retirement bonanza in modern human history, holding an average $14.6 million in their corporate retirement accounts. That’s $86,043 a month once they retire.
Some CEOs will be pocketing even far larger pensions. David Cote, a key mover and shaker in both the Business Roundtable and Fix the Debt, is holding $134.5 million in his Honeywell retirement account. That tidy sum will gild Cote’s retirement at an estimated $795,134 a month!
The typical American worker within 10 years of retirement, by contrast, now has only enough in savings to generate a monthly retirement payout of $71. If Social Security benefits shrink, notes the Center of Budget and Policy Priorities, millions of older Americans will slide into poverty.
Why are these CEOs driving so hard to cut Social Security?
First, their corporations don’t pay much in the way of corporate taxes. They want to pay even less—and the less the federal government spends on Social Security and other “entitlements” like Medicare, the less pressure on lawmakers to seriously tax corporate income.
Second, Americans pay Social Security taxes on only the first $113,700 of income. But if we eliminated the ceiling—and taxed CEOs at the same rate as average workers—95 percent of the expected Social Security budget shortfall over the next 75 years would disappear.
America’s CEOs would rather just cut Social Security benefits, but public opinion clearly disagrees. Americans—by a 66-29 percent margin—last November told pollsters they favor eliminating the ceiling on income subject to Social Security tax.
America’s CEOs have pumped tens of millions into lobbying efforts to quash ideas like the elimination of the Social Security tax ceiling. They are preaching “shared sacrifice” instead. We all must swallow hard, their pitch goes, and accept less from Social Security. Will these CEOs be able to get this pitch past Congress? Their platinum-plated pensions will certainly complicate their effort.
Sam Pizzigati is an Associate Fellow at the Institute for Policy Studies and editor of Too Much: A Commentary on Excess and Inequality. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class.