An Exemplary Act of Belligerence in the Class War

“CEOs want you—to fix the debt”

Secure in their own wealth and retirement income, some of the nation’s chief executive officers are now calling for cuts in Social Security.

Scott Klinger for the Los Angeles Times (December 1, 2013)

“Many of the nation’ top CEOs have joined forces to ‘fix the debt.’ They want to achieve this goal, in part, by reducing Social Security benefits and raising the retirement age to 70.

One of the chief executive officers, David Cote, runs Honeywell. ‘As an American, I couldn’t know about this problem and not try to do something about it,’ Cote told Wall Street Journal TV. Cote has $134 million in his Honeywell retirement account, according to documents filed with the Securities and Exchange Commission, and he has worked there only 11 years. That amount could provide him a monthly retirement check of $795,134 once he turns 65. The Social Security retirees whose checks he wants to reduce receive, on average, $1,237 a month.

Cote is not alone among those with lavish private retirement benefits to be calling for major cuts in Social Security. He is one of 200 large-company CEOs who belong to the Business Roundtable, a powerful lobbying club that represents the interests of America’s corporate leaders. Roundtable is a leading voice calling for replacing the current formula used to calculate Social Security cost-of-living increases with a less generous one. The change it suggests would steadily chip away at retiree benefits each year until, after 20 years, Social Security checks would be about $100 less than if the current formula was retained.

The Business Roundtable also advocates raising the retirement age to receive full Social Security benefits to 70, which would give the U.S. the dubious distinction of requiring workers to wait longer than any other developed nation to receive their public pensions.

Like Cote, many of the CEOs on the Business Roundtable have corporate retirement benefits that ordinary Americans would find unimaginable: an average of $14.5 million, enough to garner monthly retirement checks of $86,043, according to a new report, ‘Platinum-Plated Pensions,’ published by the Center for Effective Government and the Institute for Policy Studies.

 The report examines America’s growing retirement crisis. CEOs’ decisions to cut their workers’ pensions have played a direct role in this crisis. In 1980, 89% of America’s largest corporations offered their workers a defined-benefit pension that reliably delivered monthly pension checks to retirees. Today, only 11% of these firms offer pensions. Most have switched workers to riskier 401(k) plans, which generate huge fees for Wall Street — and the prospect of an uncertain retirement for most employees.

The elimination of so many corporate pensions has left Americans more dependent on Social Security. More than a third of all Americans over age 65 receive 90% or more of their monthly income from Social Security, and that’s in an era when many retirees still draw pension benefits. Six million Americans over the age of 65 currently live beneath the poverty line, with 2 million more expected to join them by 2020. Cutting Social Security benefits would make things worse.” [….] Read the rest of the article here.

Background Reading: 

• Baker, Dean and Mark Weisbrot. Social Security: The Phony Crisis. Chicago, IL: University of Chicago Press, 1999. 
• Buchanan, Neil H. “Social Security and Government Deficits: When Should We Worry?,” Cornell Law Review, Vol. 92: 257, 2007; GWU Law School Public Law Research Paper No. 242. Available: http://ssrn.com/abstract=959933 
• Esping-Andersen, Gøsta. The Three Worlds of Welfare Capitalism. Oxford, UK: Polity Press, 1990. 
• Furniss, Norman and Timothy Tilton. The Case for the Welfare State: From Social Security to Social Equality. Bloomington, IN: Indiana University Press, 1977. 
• Goodin, Robert E. Reasons for Welfare: The Political Theory of the Welfare State. Princeton, NJ: Princeton University Press, 1988. 
• Goodin, Robert E., Bruce Headey, Ruud Muffels, and Henk-Jan Dirven. The Real Worlds of Welfare Capitalism. Cambridge, UK: Cambridge University Press, 1999. 
• Hiltzik, Michael. The Plot Against Social Security: How the Bush Plan is Endangering Our Financial Future. New York: HarperCollins, 2005. 
• Judt, Tony. Ill Fares the Land. New York: The Penguin Press, 2010. 
• Katz, Michael B. In the Shadow of the Poorhouse: A Social History of Welfare in America. New York: Basic Books, 1986.
• Katznelson, Ira. Fear Itself: The Neal Deal and the Origins of Our Time. New York: W.W. Norton & Co., 2013.
• Kennedy, David M. Freedom from Fear: The American People in Depression and War, 1929-1945. New York: Oxford University Press, 1999. 
• Laursen, Eric. The People’s Pension: The Struggle to Defend Social Security Since Reagan. Oakland, CA: AK Press, 2012. 
• Michelmore, Molly C. Tax and Spend: The Welfare State, Tax Politics, and the Limits of American Liberalism. Philadelphia, PA: University of Pennsylvania Press, 2012. 
• Murphy, Liam and Thomas Nagel. The Myth of Ownership: Taxes and Justice. New York: Oxford University Press, 2002. 
• Myles, John. Old Age in the Welfare State: The Political Economy of Public Pensions. Lawrence, KS: University Press of Kansas, revised ed., 1989. 
• Myles, John and Jill Quadagno, eds. States, Labor Markets and the Future of Old Age Policy. Philadelphia, PA: Temple University Press, 1991.