Archive for the ‘Pensions’ Category

Prediction: The following bill would have near-universal public support. From The Hill:

While vast numbers of the private-sector workforce have seen their pensions vanish over recent decades and find themselves with precarious, market-based 401(k) plans, members of Congress receive both a pension and a quality employer-match plan.

According to at least two lawmakers, it’s time for elected officials to join the real world.

“If you compare the private sector to what the folks in the federal government get, in the federal government you not only get healthcare benefits, you get a 401(k) that has a higher match than most private-sector companies,” Rep. Tim Griffin (R-Ark.) told The Hill.

“Then on top of that you get the pension,” Griffin said. “Most private-sector folks don’t get a pension.”

In an effort both to identify cost savings amid the nation’s growing debt crisis and to give federal lawmakers more credibility in addressing related financial issues, Griffin and Rep. Mike …

Continue reading Is Congress really going to take on a congressional perk? »

What really ought to scare Grandma? How about that President Obama has made it clear that her Social Security is “guaranteed” only if those in Washington feel like paying up?

From an editorial in Investors Business Daily:

Obama beat everyone … with his scaremongering claim that Social Security checks are at risk if he doesn’t get his way on the debt ceiling. “I cannot guarantee that those checks go out on Aug. 3 if we haven’t resolved this issue,” he told CBS News, “because there may simply not be the money in the coffers to do it.”

Wait! What happened to Social Security’s “guarantee”? You know, the iron-clad assurance of Social Security benefits in exchange for paying into the program your whole working life? It’s something Democrats constantly talk about, particularly when attacking Republicans who propose privatizing the program.

As Nancy Pelosi once put it: “Social Security has never failed to pay promised benefits, and Democrats will fight to make sure that Republicans do …

Continue reading On Obama’s threats, and the ‘guarantee’ of Social Security »

Atlanta taxpayers should cross their fingers that their City Council will seize on a great opportunity this week and vote to revamp the pension scheme for city workers.

Atlanta’s pensions have been a billion-dollar time bomb ticking for years, thanks in large part to a pair of ill-considered — and possibly illegal — plan changes made during the last decade. Those changes vastly increased the city’s liabilities at an unfortunate time of stock-market stagnation.

Mayor Kasim Reed deserves much credit for his determined pursuit of a solution to the pension problem, and things came to a head last week when the City Council’s Finance Committee approved a reform plan that could come before the entire body as early as today.

City workers are understandably upset about the plan, but Reed has rightly described the issue as a matter of preserving pensions or preserving jobs; he’s estimated that up to 200 workers will be laid off if the Council doesn’t approve a solid reform plan.

What’s …

Continue reading An opportunity on pensions that Atlanta cannot miss »

If Medicare reform is on life support, it’s not because of a special election in upstate New York or the Senate’s rejection of the House GOP budget plan.

It’s because one side wants to air TV commercials of a dark-suited Republican pushing grandma off a cliff, while pursuing a path of neglect that would let her die bed-ridden and alone.

There can be no “hands off Medicare” policy. Either your hands are busy trying to fix the indisputably broken program, or your hands are holding it down, helping it collapse under its own unbearable weight.

Left-wing pundits gloated over the news Tuesday from New York’s 26th Congressional District, a longtime Republican stronghold won by a Democratic candidate on the single issue of “GOP’s killing grandma!” Time’s Joe Klein, appearing on MSNBC, called it “a victory for socialism.”

But Margaret Thatcher’s dictum that, with socialism, “eventually you run out of other people’s money” remains true. And with Medicare, “eventually” has arrived.

The …

Continue reading What’s really scary? Acting like nothing’s wrong with Medicare »

A request for any pollsters asking the public about changes to Medicare or Social Security: Will you please stop asking people 65 and older what they think?

It’s not that I have anything against retirees, but including them in opinion polls such as the CBS/New York Times poll released this week is skewing the results — and the policy decisions those results may influence.

Here’s why: No one is proposing to change the deal for people who have already retired. Even Paul Ryan’s allegedly “Draconian” budget plan exempts Americans 55 and older from any changes.

One reason is simple politics: Older people vote more consistently than younger ones. But it’s also of course a matter of fairness. People who are no longer working don’t have the opportunity to earn income to make up for anything they lose. They based their retirement planning on particular promises from their employers and the government, and it would be unfair to change those promises now. I think we all get that.

So, the …

Continue reading Why ask retirees about changes that won’t affect them? »

If you live within Atlanta’s city limits, as I do, you are by now used to hearing about the $1.3 billion deficit for the pension plans for city employees. But if you read the first installment of the AJC’s series on public pensions in the area, the number that should have jumped out at you is the one for Atlanta Public Schools: $532.5 million more, pushing the total tab for city taxpayers to nearly $2 billion. And that’s on top of our share of Fulton County’s shortfall.

APS serves a student population of around 50,000 students, and its pension plan doesn’t even cover teachers (they’re in the state’s pension system, which is in far better financial shape). Yet, its pension deficit is larger, both in absolute terms and as a percentage of its liabilities, than any of metro Atlanta’s counties.

As bad as the deficits are, there’s a problem with focusing only on the deficits when looking at the pension plans. The more immediate threat is the enormous amount of money each …

Continue reading Pensions burden on Atlantans comes into sharper focus »

Much of the public debate about a potential new stadium for the Atlanta Falcons has focused on the wrong question.

The issue is not whether the Falcons, their fans and — above all — owner Arthur Blank would benefit from having a new stadium built with an expected $400 million in tax money. The issue is whether building a replacement for, or complement to, the Georgia Dome is the best use of those millions.

As an economist would say, is it worth the “opportunity cost”? That would be the next-best choice among all possible things the money could buy.

And we could buy a lot of things for $400 million — the state’s expected portion of the $700 million project. Put another way, we’re talking roughly $19 million a year. Based on recent years, that’s the portion of annual hotel/motel tax revenues in Atlanta that would be dedicated to the new stadium.

Hotel tax revenue is sometimes considered “free money” because it comes from visitors. That’s why it’s better to think in terms of what …

Continue reading The things we’d forgo to build a new Falcons stadium »

There are many lessons to be learned from the protests and outright abdication of duty by public labor unions and Democrats (but I repeat myself) in Wisconsin. One of them is that there can no longer be any doubts that President Obama has radical ideas about the proper balance and relationship between the federal and state governments.

From the Washington Post:

President Obama thrust himself and his political operation this week into Wisconsin’s broiling budget battle, mobilizing opposition Thursday to a Republican bill that would curb public-worker benefits and planning similar protests in other state capitals.

Obama accused Scott Walker, the state’s new Republican governor, of unleashing an “assault” on unions in pushing emergency legislation that would change future collective-bargaining agreements that affect most public employees, including teachers.

The president’s political machine worked in close coordination Thursday with state and national union officials to get …

Continue reading Wisconsin protests: Obama goes too far by mobilizing opposition »

That’s the plea from Washington Post economics columnist, and card-carrying baby boomer, Robert Samuelson:

I received my Medicare card the other day, recognizing my 65th birthday and making me part of one of America’s biggest problems. By this, I mean the burden that the massive baby-boom generation will impose on its children and the nation’s future. There has been much brave talk recently, from Republicans and Democrats alike, about reducing budget deficits and controlling government spending. The trouble is that hardly anyone admits that accomplishing these goals must include making significant cuts in Social Security and Medicare benefits for baby boomers.

(snip)

Yet, neither political party seems interested in reducing benefits for baby boomers. Doing so, it’s argued, would be “unfair” to people who had planned retirements based on existing programs. Well, yes, it would be unfair. Indeed, it’s hard to imagine a worse time for cuts. Unemployment is horrendous; eroding home …

Continue reading In fixing budget, be unfair to boomers »

This week’s typical Washington compromise on taxes has been accompanied by typical Washington drama: about who won and lost, about whether President Barack Obama had a meltdown when he called Republicans “hostage takers” and his Democratic critics “sanctimonious” and “purist.”

Whatever. I prefer that tax rates stay low, but the fact that the extension of current income tax rates was for only two years just goes to show how fleeting these decisions are. If there’s one piece of the package that could lead to bigger, more far-reaching changes down the road, it’s the one-year payroll-tax reduction.

I don’t mean big changes in job creation. The 2-percentage-point cut comes out to about $1,000 on a $50,000 salary next year, totaling some $120 billion nationwide. But it is probably too temporary to spark a real employment surge.

No, the more significant impact is changing the way we think about Social Security.

There is an outdated yet widespread belief that Americans receive in …

Continue reading Payroll-tax break might alter thinking on Social Security »