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Thursday, 05 December 2013

The Government War on Old People

I dislike slogans that declare war. You know, the war on drugs, the war on poverty. We have all seen how well those have gone and it deprives a word like “war” of its power when we apply it to every social policy that needs attention.

Nevertheless, it struck me as I read the news yesterday morning that War on Old People has become a pertinent and useful phrase. “Detroit Ruling on Bankruptcy Lifts Pension Protections” blared a New York Times headline:

”[A] federal judge held on Tuesday,” wrote the reporter, “that this battered city could formally enter bankruptcy and asserted that Detroit’s obligation to pay pensions in full was not untouchable.

[...]

“The judge made it clear that public employee pensions were not protected in a federal Chapter 9 bankruptcy, even though the Michigan Constitution expressly protects them. 'Pension benefits are a contractual right and are not entitled to any heightened protection in a municipal bankruptcy,' he said.”

In another story from the same edition of The Times, reporter Mary Williams Walsh wrote that the ruling had repercussions beyond Michigan. It

”...could alter the course of bankrupt cities like Stockton and San Bernardino, Calif., that had been operating under the assumption that pensions were untouchable.”

Although the new decision will undoubtedly be appealed, for now the law says pensions can be cut and the judge made no ruling or recommendation about how much.

That's the Michigan decision. On the same day the legislature in Illinois, a blue state with a strong labor movement, passed

”...a deal to shore up the state’s debt-engulfed pension system by trimming retiree benefits and increasing state contributions.”

Democrats and Republicans worked together to create this bill. Both parties worked hard to get it passed and it was supported by Chamber of Commerce and the Illinois Farm Bureau:

”Union leaders and some Democratic lawmakers opposed it, just as strenuously, arguing that the bill fell too harshly on state workers who had paid into their pension plans over the years with the understanding that the benefits would be there when they retired.

“Some Republicans also opposed the bill, saying it did not trim enough to solve the state’s pension troubles.”

Republicans said the bill “did not trim enough.” Of course they did.

So as of Tuesday, retired public employees – people like police, firemen and their widow(er)s and children - in Michigan and Illinois (with other states sure to follow) now know their pensions will be cut but not when and not by how much.

It's not like they are rolling in dough. Average public pensions in Detroit are about $19,000 a year. Recall, too, that these retirees do not have Social Security accounts like the rest of us. The pensions were in place of those. Merry Christmas, Michigan and Illinois.

For decades, right wing politicians and their wealthy supporters like Peter G. Peterson have been doing their best to cut Social Security benefits. As you know, the latest attacks are focused on reducing cost-of-living increases by adopting the chained CPI calculation which would produce lower COLAs than the current system.

And right now, a bipartisan Congressional committee has been charged with creating a budget before the next government shutdown deadline of 15 January. On the table, as is always so with Congress (and President Barack Obama), “entitlement” cuts are being discussed.

Why is it, will someone please explain, that when government budgets are being hammered out (in extremis, as in Detroit or in general as currently in D.C.), the first place legislators go for cuts is old people, the ones who have paid into and earned their pensions and Social Security?

They don't raise corporate taxes. They don't close tax loopholes. They don't start taxing currently exempt property and all manner of other ways to raise revenue that are more fair.

No. They always reach first for what little income retirees have, taking food from their mouths, making medications unaffordable and sometimes forcing people who can no longer afford their mortgages out of their homes.

Now, THAT is a war worthy of the name: a War on Old People. And it becomes more evident with every court decision, every sound bite, every trial balloon purposely leaked from Congressional committees that it is accelerating. What frightens me is that this time they will win.


At The Elder Storytelling Place today, Arlene Corwin: Thinking on Your Feet Is


Posted by Ronni Bennett at 05:30 AM | Permalink | Email this post

Comments

Thanks Ronni, I posted a link on my Facebook page.

Are you sure they don't have Social Security? I'm a state worker, and I'm expecting a pension and social security both. I *think* it's only federal workers who don't get social security (or didn't - don't know the current rules).

Mary...
It differs from state to state. Some do, some don't. You will find a passable explanation here.

Excellent article.

I've been trying to understand the "Why" portion for nearly a decade and this short article I wrote titled "The four corners of society" is my best explanation on what I believe is necessary to fix it.

The NYT articles on the pension grab were actually pretty good at explaining why cities and states got into funding shortfalls.

But, of course, all these articles neglect to mention the real reason retired city workers are getting screwed: rich people have gamed the political system to make it impossible to raise their taxes. Cities would not be unable to pay their obligations if they were able to do the obvious and get the money from the people who have it.

I get a knot in my stomach every time I hear about pensions being cut. We should have a law saying pensioners get paid first, in full, before anyone else gets a piece of the pie. No one in society is less able to sustain a cut in income than retirees too old to work and/or with not enough years left to make up the shortfall in any way.

They always go after the powerless because they can.

Most public employees work very hard under often difficult conditions because they want to help others and because they have guaranteed benefits. Please remember that these folks are providing the services that the public demands - schools, police, fire, streets, trash, and many more. And while there are always a few bad eggs they can not compare on any level with the bankers on Wall Street who don't worry about their Social Security because of the millions they have been able to invest. We can't all be bankers, but should we be punished because we don't make millions?

"They don't raise corporate taxes. They don't close tax loopholes."

When you look up how many former corporate executives and millionaires make up the Senate and the House, (and this doesn't include all of the wannabe millionaires) it's not hard to see why they don't impose on their own people out in the private sector over old people.

Thank you for this important message. I have to agree with Darlene, and I have to say it feels like bullying to me.

Yesterday on NPR All Things Considered, Alicia Munnell, director of the Center for Retirement Research at Boston College, said that while Detroit is a "basket case," its public employee pensions are not the problem.

Munnell said, "Detroit has a lot of financial problems, but at this point in time, pensions are not one of them. One of the reasons is they took out a bond several years ago and put the proceeds in their pension fund. So their pension fund looks good but the rest of their finances are really a disaster."

Could they even raid the pension fund to pull out specifically designated bond money to use for other expenses?

She also said folks in the public sector have "retirement envy" (ha, there's a myth!), because their 401k funds have not risen much since taking such a hit with the recession.

Surely smart people in Detroit know this so why do they allow the cuts? I suspect the political leanings of and pressures on that federal judge.

Pensions are calculated as a percentage of a whole contractual pay package, and used to be called "deferred income." Not paying a pension is theft of services and breach of contract, and no different from not paying wages for hours worked, a prosecutable criminal offense.

Pensioners are targeted (IMO) because it's a demographic believed to be powerless and disinclined to battle.

We have little disposable income (if any), hence few/no legal challenges. We have weaker health, hence no marches, no door to door outreaching for petitions or other calls to constitutional action en mass.

Nor are pensioners as age advances inclined or able to be a dynamic force of the classic 70's disruption.

Our vote is considered "predictable", loyal to registered party lines.

Our fiscal ability to contribute is next to nill so we are of no value as campaign contributors.

We (seem) to have no champions (except B. Sanders).
Or those who do call out on our behalf are ultimately ineffectual, stymied and stalled by greater powers.

And as society, as a whole in the US, does not see us worthy of protection as they do children, animals, historic buildings (even architecture has more protection lol) we are the the expendable element.

Perhaps I have a truly cynical point of view. Every day, every vote, every opportunity given to support and respect the promises made (and acknowledge the lack of options we have) may bring sense to the choices made. By State, by Fed, by town, by village.

I'm not hopeful.

As Darlene so aptly and succinctly said:
"because they can".


Though I am not addressing your immediate question 'why?', I want to add something in context to this not new discussion.

Yesterday I was listening to an NPR interview with an book author Peter Schweizer who wrote: "Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets" (Kindle $13).

Perhaps this book will reveal some answers . . . . ?

I am thinking back to a post made on FB by a woman who grew up in a wealthy family in my hometown, and who continued with the same lifestyle by marrying well, belonging to the country club, etc. She doesn't believe that she (and her wealthy peers) should have to give more in taxes because they earned their money, so it should continue to belong to them. She, by the way, likes the Tea Party. I don't dislike this woman, but we sure don't share the same politics. Couple her worldview with the dislike for government; well, this represents a small view into the way some well-to-do folks think.

Ane yet voters continue to vote these demonic politicians into office. WHY? Could it be the Stockholm syndrome or are people really just that dumb?

I think you are guilty of the same stereotyping you detest. Pensioners can range from 55 to 95, there is a broad range of income levels. To suggest that in no way whatsoever should they be expected to make any sacrifices, without knowing any of the details like for e.g. no cuts to the very oldest or the lowest income bands, suggests that seniors are indeed children and should be treated that way.

I find this same sort of schizophrenic attitude everywhere, seniors will make bad investment decisions but then want to be bailed out because they are "old" but if you suggest they are too old to make the decisions all hell breaks loose. I see it when an Azheimer's driver killed a pedestrian in my area and got off with nothing. We can't have blanket cognitive testing but then if they kill someone there are no consequences.

You can't have it both ways, either you are part of society or you are a child and need to be protected in all things.

Although I agree with Vera that there's a broad range of ages and capabilities among elders, it doesn't change the fact that capitalism as it is practiced today is a rigged system. Maybe it's just the nature of the beast, but I'm old enough (77) to recall that most of our nation's working population flourished economically post- WWII compared to what is happening today.

There was still a big difference between the incomes of the very rich and those of the rest of us, but greed did not run rampant as it does today. Wealth wasn't concentrated in the hands of the top 1%. Ordinary Americans could feel fairly confident that they could afford to own a home, educate their children and retire with a degree of security. Many workers, both in the public and private sectors, even enjoyed 2-week summer vacations!

George W. Bush's "ownership" society has been a huge success if ownership is interpreted as "You're on your own". With rare exception, this seems to be the position of those "representing" us in Congress today. I would simply ask them to consider how their own parents would manage on an income of $20,000/year. But that would require empathy--and these folks just don't have any!

I was watching a segment featuring Ben Bernanke's testimony four or five years ago before the Senate. He was asked about the Federal deficit and where the government might find the money to address it. The questioner brought in Social Security and Ben told him: "That's where the money is." Detroit owes about $18billion and about half of that is in underfunded pensions. Wiping out the pensions, in part or total, would go a long way to reducing that mountain of debt. That is why the politico are going after pensions.

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