A guest commentary by Tom Louderback
We deeply respect our veterans for their courage and sacrifice, but apparently we think their pensions are too expensive. That would explain the deafening silence when Congress slashed military pension benefits by about 20% in 2016 in this year’s National Defense Authorization Act.
Or maybe that doesn’t explain the cut. Who even remembers pensions? They have been gone for workers in the private sector for many years. Few are those who can relate more to the concept. Our parents and grandparents received pensions when they retired. It was then.
Today, only a few in the private sector are covered by pensions. This demise began in the Reagan administration, and the motivation for getting rid of it was primarily cynical political.
Republicans feared the growing economic power of union pension funds since the New Deal. Thus, they did not want to see the economic power of unions grow as the pensions of their members grew.
This fear motivated the Reagan administration to implement clever political strategies that Republicans still apply today whenever they hold the presidency. The first strategy is to keep the ERISA regulations (the “Employees Retirement Income Security Act”) as complicated as possible. These complications lead to higher overhead costs, which in turn discourages employers from offering pensions.
Hand in hand with the first strategy, the Reagan administration opened up 401 (k) retirement savings plans to all. This openness gave employers a cheap alternative to pensions, and it paid off very well for Republicans as a large number of employers terminated their pensions within the next ten years.
This trend has been a considerable reduction in the standard of living of workers. Many did not see him, however, because they were decades away from retirement at the time.
Note that 401 (k) retirement savings plans were not designed to provide retirement security as pensions once were. They were intended only to serve as tax shelters for business executives. No one really thought that these savings plans would be better than pensions for employees – and they are not as it turns out. Consider that most baby boomers are retiring today with minimal retirement savings.
Once the Republicans’ pension termination strategy was firmly in place, they stepped up their attacks on unions through countless tactics such as further restrictions on organizing activities, disrespecting existing laws and hostile appointments. courts, the National Council for Labor Relations. and US Department of Labor. The hostile environment created by the Republicans overcame the power of most employees to negotiate pensions. Their mission was accomplished.
This is how we got to where we are today. Many of our parents and grandparents had pensions, but few of the next generation are covered. Some Republicans, like Mitch McConnell and Rand Paul, will blame it on global competition as if it was the only possible cause of our declining standard of living for working people in our country. But the reality is, Republicans put us on this downward slope years before the global economy began to change. Most pensions had already been abolished by that time.
Likewise, many of us will recall that the George W. Bush administration attempted to privatize Social Security. It turned out to be a very unpopular decision. The public practically rebelled against her. Bush backed down.
The Republicans’ political target was clearly evident to many at the time. They wanted to reduce the social security trust fund. On top of that, they knew their political allies on Wall Street wanted a share of the Social Security action.
Never forget that Bush’s attempt to privatize came just a few years after his massive tax cuts paid off the Clinton administration surpluses. Bush could have invested these surpluses in Social Security instead. This would, however, have been prohibited by Republican orthodoxy.
Put simply, Republicans believe workers do not deserve economic security in retirement. You have to build a fortune to deserve this, as they see it. Not rich? Too bad for you.