A Voice From The Past

02/26/2005

Here is Dennis Kuscinich speaking just a four months ago on the subject of Social Security:

Social Security and Pension Protection

I see a new horizon for Social Security in America, through restoring the age of retirement to 65 years, instead of the current 67 years. The normal age for retirement was raised in phases beginning in 1983 from 65 to 67 years. The reason? People live longer. The economy was transitioning to white collar jobs. But, while people were living longer, they were not working longer, because their bodies wore out. Medical technology has enhanced longevity. Still, increased longevity sometimes means people are sicker, longer.

We need to reclaim the benefits of quality life extension for our seniors by reclaiming Social Security benefits at age 65. America can afford it. Social Security’s finances are more secure than ever. The fund is solid through the year 2042, without any changes whatsoever. And America is wealthier than at any previous point in Social Security’s history.

Yet, Wall Street advocates of privatization look at Social Security’s accumulated surplus as a source of revenue to fuel an erratic market. The present Administration has created a commission that stands for privatization, even in the face of collapsing markets. The proposed privatization of Social Security challenges us once again to consciously choose between the claims of the community and the claims of commerce, between the requirement for economic justice and the imperative for profit, between the public interest and private interest.

I do not believe it is in our best interest to divert funds from the Social Security trust fund. Social Security is the only guaranteed income for old age and for disability. Proponents of the scheme to invest Social Security funds in the stock market wrongly assume that the stocks will earn a 7% annual rate of return over the next 75 years. Social Security trustees are predicting the growth of the economy will slow to around 1.45% per year over that period, making it impossible to get a 7% rate of return on stocks.

The American dream is to work hard, get ahead, give your life to a company, save with a secure, decent retirement pension. That dream is being destroyed by corporate executives who are cheating people out of their hard-earned retirement benefits.

As the nation watched enormous corporate bankruptcies unfold at Enron and Global Crossing, and the people of my district watched NAFTA Chapter 11 proceedings at LTV Steel, we saw the plot thicken around one major theme—there are two sets of rules: Executives get one set of rules, and their employees have to play by a different set of rules.

Corporate executives get special treatment, including more investment choices, no lock down restrictions, generous deferred compensation plans that aren’t required to be disclosed, guaranteed rates of return on pension investments, and a golden parachute of retention bonuses and other benefits when a company goes under.

Employees, on the other hand, have barriers to information, fewer options, more restrictions on investment, and no guaranteed returns. The most egregious disparity is that during a bankruptcy, executive pension plans are totally protected from creditors. Executives can count on cashing in their entire package. On the other hand, employee pensions are not protected from creditors. Employees stand at the end of the line and must wait behind other creditors to claim what rightfully belongs to them for compensation that is already earned.