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May 18, 2005
Public called upon to carry pension burden
What is not being discussed is the fact the Pension Benefit Guarantee Corporation is already covering the cost of 2,000 other defined pension plans and was under funded by more than $23 billion before adding the United Air liability. One of many liberal stop gap agencies put into being during the ravages of the Watergate trials of the early 1970s, this taxpayer-supported agency is tasked with paying at least a portion of the pension benefits promised, but never really provided for. The root of the current problem goes back to the heyday of unionism when unrealistic demands were supported by politicians looking more to the ballot box than providing workers with the truth about the promises given. The fact is workers were lied to by their union bosses, their elected officials and the companies they worked for because no one wanted to admit there would never be enough money to cover the true cost of the negotiated defined pension plans. These plans promise a guaranteed monthly income at retirement for workers who meet certain eligibility requirements. Defined pension plans were the name of the game in what are now called the Rust Belt industries of this country. Steel, rubber and auto accessory companies were the first, but are now being joined by airlines and automakers. General Motors has had their debt ratings and credit worthiness reduced to junk status primarily because of their pension liabilities. But there's more. Last July, it was under reported that the nation's 100 largest pension plans had shortfalls in excess of $89 billion and only 54 of the 362 companies in the S&P 500 that have pension plans had a surplus of assets. If they are unable, for whatever reason, to get their plans righted, the taxpayers will again be called upon to bear the burden. And yes, there's more. Today there are over 5.1 million retired public workers who rely on defined pension benefits plans promised by their politicians over the last 40 years. Another 15 million are expecting benefits when they retire and the current gap in their pension programs is $260 billion. Forty-five states currently have shortfalls in their plans and in 13 states, the liabilities exceed their total annual tax revenue. If individuals were to be this footloose and fancy free with their own finances, they could look forward to joining the ranks of the homeless and destitute. But politicians and bureaucrats are never faced with having to accept responsibility for failures, they simply raise taxes. For the common working person it is difficult to accept the fact that the free spending habits of our politicians have gone unnoticed and reported for so long. The basic numbers have been available at least since 1974, when Congress created the PBGC to absorb failing programs. So why has no meaningful effort been made to communicate the reality of the situation to the people? The answer is party power politics. There was a time, like many of my generation, when I was enthralled by the vision and practical mindedness of the Camelot years. Although too young to vote, I was taken with John Kennedy as many were, and believed myself to be represented by his Democratic ideals. But that all changed as one by one, my heroes of the era were taken by violence. Then after high school graduation, while on a train to Los Angeles from Chicago, I heard the news of Robert's assassination; I was numb. Disbelief in his death was followed by the horror of the convention in Chicago and the defeat in November. Four years later I found a party I once knew replaced by leadership so foreign in ideals and thinking, I knew it had left me for good. Then as today, what is right does not matter, just follow the party line. The Harry Reids and Ted Kennedys provide no answers to problems, just rhetoric as to why it must be someone else's fault. This is why they have steadfastly refused to admit there might be a problem with the Social Security system or its defined benefit program. Last week a Democratic Senator, who tried to offer a possible start to remedy the Social Security problem, was labeled as a party of one by his leadership. Doesn't that speak volumes to the real problem our nation faces? Makes me wonder whether our national failure to teach math is more purposeful than otherwise acknowledged. If numbers become so large and failure of a system so massive as to confound the mind, who will feel comfortable calling for change. But change must come. Long after all those who put us in harm's way leave this life, our children and theirs will be left with unknown trillions of dollars in promises to pay for. It's time we demanded our elected officials quit buying votes with unfounded promises and easy sound bites, and accept the moral responsibility we entrusted with them by our vote. Little writes from Pahrump. His column, "The Other Side," appears here on Wednesdays. |
