Archives for category: Pensions

People who work for a living count on the fact that when they retire, they will have Social Security. They pay taxes to fund the Social Security fund, and they deserve what they have paid for to protect them from living in poverty after they stop working. But Trump is threatening to eliminate the tax we all pay into the Social Security fund.

Trump recently issued an executive order deferring the payroll tax, which would temporarily boost workers’ pay checks. For the balance of this year, workers would see a fatter pay check. But every cent is deferred, and workers would have to repay that amount before April 15, 2021, meaning smaller pay checks after the election.

Trump said that if re-elected, he would abolish the payroll tax. If he did, the Social Security program would be bankrupt by 2023. Does he know that the payroll tax funds Social Security? Maybe not. If that secure funding were eliminated, Social Security would be at the mercy of politicians every year.

Historian Robert explains the opposition to Social Security. He wrote the following for the AARP about Social Security:


More than 80 years after its birth in the depths of the Great Depression, Social Security is deeply woven into the nation’s fabric. But Americans were initially skeptical of a program that seemed contrary to their faith in rugged individualism. “It is difficult now to understand fully the doubts and confusions in which we were planning this great new enterprise,” FDR’s Secretary of Labor Frances Perkins wrote later.

In a conversation with Supreme Court Justice Harlan Stone, Perkins, whom Roosevelt had tasked with designing what then seemed like a radical departure from traditional ideas about the role of government in American life, confided her uncertainty about how to make this work within constitutional bounds. Stone in reply whispered, “The taxing power of the federal government, my dear; the taxing power is sufficient for everything you want and need.”

In 1935, a time when British and German systems of support were easing the perils of old age, left and right in America saw reasons to contest Roosevelt’s reform. Liberals objected to withholding taxes from current wages to fund pension payments. Instead of expanding the economy through federal largess in a time of continuing depression, the plan reduced employees’ take-home pay by pouring millions of dollars into a fund that would not put money into circulation until workers retired. Moreover, it made no provisions for farm workers or domestics or workers in small businesses with fewer than 10 employees. And those who were already past age 65 were also left out of the mix.

Conservatives were even more vocal. Industry leaders objected to a major expansion of the federal government and forecast financial collapse and “the inevitable abandonment of private capitalism.” The head of General Motors predicted that it would destroy “initiative,” discourage “thrift” and stifle “individual responsibility.”

Republicans in the House foresaw the enslavement of workers: “The lash of the dictator will be felt,” one said. Another saw calamity ahead: “This bill opens the door and invites the entrance into the political field of a power so vast, so powerful as to threaten the integrity of our institutions and to pull the pillars of the temple down upon the heads of our descendants.”

Roosevelt understood the opposition to the program, especially the objections from both ends of the political spectrum over taxes. But he believed that they were essential to preserve whatever was put in place. “We put those payroll contributions there,” he said, “so as to give the contributors a legal, moral and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.”

But “after all the howls and squawks,” Roosevelt pointed out, most Republicans, reluctant to oppose majority opinion, joined Democrats in both chambers in voting for the measure.

To the surprise of most outspoken critics, none of their worries materialized. When the law was signed by Roosevelt on Aug. 14, 1935, it joined his other social reforms, such as Federal Deposit Insurance to protect bank accounts, and reforms by subsequent presidents, such as Lyndon Johnson’s 1965 Medicare bill, to save older Americans from financial ruin. The law was not set in concrete but rather was an expandable program that, by the mid-1950s, covered almost all employees and the self-employed as well. Nor were these changes strictly owned by Democratic administrations. During Richard Nixon’s presidency, Social Security benefits increased by 50 percent.

By the 21st century, Social Security had become universally popular and helped foster the view in the U.S. that federal social welfare programs are not a threat to free enterprise but a means of preserving it in a more humane industrial system. Proposals to privatize the program have repeatedly fallen by the wayside and it seems clear that, whatever the deficiencies of the system, no politician — as FDR predicted — is in a position to take it away.

Robert Dallek is the author of books on John Kennedy and Lyndon Johnson and of an upcoming biography of Franklin Roosevelt.

Got that? FDR predicted that “no damn politician” could ever scrap Social Security because it was funded by a payroll tax. Everyone paid for it. No one would dare take it away.

But FDR never imagined a politician as craven as Trump, who would falsely claim that cutting the payroll tax would put money in the hands of working people (and defund Social Security).

Peter Greene turns his attention to Rhode Island and finds that it has been subject to a corporate education reform takeover.
Not only is the governor a former venture capitalist who made her reputation by taking an axe to teachers’ pensions, but her husband Andy Moffitt is a TFA alum who moved on to McKinsey. Not only that, he co-authored a book with Michael Barber of Pearson about “Deliverology,” a philosophy that turns education into data analytics.

Governor Gina Raimondo hired a TFA alum to lead the State Education Department; the new Commissioner immediately joined Jen Bush’s far-rightwing Chiefs for Change and led a state takeover of Providence schools. There is no template for a successful state takeover, so we will see how that goes. Think Tennessee’s failed Achievement School District, funded with $100 million from Duncan’s Race to the Top. Think Michigan’s Education Achievement Authority, which closed after six of boasts but consistent failure.

Read Greene’s incisive review of the First Couple of Rhode Island and remember that Governor Gina Raimondo is a Democrat, though it’s hard to differentiate her views from those of Betsy DeVos.

Fred Klonsky is a retired teacher in Illinois. Retired teachers in that state, like many others, don’t collect Social Security. Politicians of both parties have tried to cut teachers’ retirement benefits. Should he care that Trump wants to defund Social Security?

He concludes that teachers in Illinois are in the same fight with those who face Trump’s stealth effort to defund Social Security.

Trump’s claim is that his executive order would put more money now into workers paychecks.

Put aside for a moment that due to Trump’s leadership there are nearly 40 million newly unemployed workers who no longer receive a paycheck.

And put aside for a moment that the payments to Social Security will have to be made up at a later date.

The payroll tax essentially funds Social Security and Medicare.

Trump’s order will stop nearly $350 billion in payments to Social Security.

If Trump is reelected and a Republican Congress eliminates the payroll tax permanently, as is the plan, it is estimated that the system will be broke by the end of Trump’s second term.

No more Social Security or Medicare.

Mitch McConnell is a national menace. He wants states to declare bankruptcy and break all their pension contracts. He brags about being “the Grim Reaper,” the man who kills any legislation that might help regular people.

If states are forced to go bankrupt, it will destroy the retirement security of teachers, police, firefighters, and all public sector workers.

He takes care of his fat cat donors and Wall Street and hurts the men and women that protect us and teach our children. They give their lives for us, and we must stop McConnell from hurting them.

He has stacked the federal courts with unqualified judges who are incompetents and bigots.

Amy McGrath is running against him in Kentucky in November.

She needs our help.

Mitch’s donors are giving him millions to keep their tax cuts coming.

Amy needs millions of donors to combat the influence Of the 1%.

Won’t you send her whatever you can afford?

Kentucky elected a Democratic Governor in 2018.

Now Kentucky needs to get rid of Mitch McConnell.

This is not just a Kentucky issue. Defeating McConnell is a national issue.

Please help Amy McGrath.

Mitch McConnell, Senator from Kentucky, says that the federal government should let the states go bankrupt.

This would destroy the pensions and health insurance of every public sector worker, including teachers, police, fire fighters, and others.

Workers in McConnell’s home state, his own constituents, would be grievously harmed. So would public sector workers in every other state that was forced into bankruptcy by the costs of the pandemic.

David Sirota wrote this article. He was a speechwriter for Senator Bernie Sanders. Please consider subscribing to his newsletter. He is a seasoned investigative journalist. Readers of this blog may remember when Sirota embarrassed PBS into returning millions of dollars to billionaire John Arnold, who had used his money to persuade PBS to run a documentary about “The Pension Crisis,” which is Arnold’s bete noir (he believes that public sector workers with their big pensions are bankrupting the country). After Sirota’s expose, PBS returned Arnold’s money.

Sirota writes about McConnell’s evil intentions here:

It’s not every day that a U.S. Senator explicitly enriches his out-of-state Wall Street donors while telling his own constituents to drop dead. Usually that kind of behavior is somewhat obscured by legislative machinations and spin. But if there was going to be any lawmaker who would be unabashedly blatant about it, you had to know it would be Mitch McConnell.

The Senate Republican leader just finished up shoveling trillions of dollars of federal largesse to businesses and billions of dollars of tax cuts to the super-rich. Having allocated all that cash to the interests that bankroll his political career, McConnell is now taking a hardline stance against a modest amount of aid to states because he says he doesn’t want resources used to prevent cuts to government workers’ retirement and health benefits.

“There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations,” McConnell said.

His goal is to use the coronavirus crisis to realize one of the most radical long-term goals of the conservative movement: empowering states to break existing contracts and slash previously pledged pension benefits for teachers, firefighters, cops, first responders and other public-sector employees.

In a half-assed play to avoid looking like he’s deliberately enriching his elite financiers and starving the peasants, McConnell cast himself as a principled opponent of “blue state bailouts” — a seemingly shrewd anti-coastal framing for his own potentially difficult reelection campaign.

In reality, though, McConnell’s opposition to pension aid is even worse than a pathetic Gerald Ford impression. It is him giving the big middle finger to hundreds of thousands of his own constituents whose Republican-leaning state is now facing one of America’s worst pension crises after McConnell’s Wall Street courtiers strip-mined Kentucky’s public retirement system.

Kentucky Fried Pensions

That’s right: for all the talk of pension shortfalls in blue states like Illinois and California, the bright red state of Kentucky has one of the most underfunded pension systems in the country. The gap between promised benefits and current resources has been estimated to be between $40 billion and $60 billion. One of the state’s pension funds is less than 15 percent funded.

Those shortfalls are not the product of Kentucky’s public-sector workers being greedy or lavishly remunerated — Kentucky teachers, for example, are paid 23 percent less than other workers with similar educational credentials, and they do not receive Social Security benefits.

No — the shortfalls are the result of 1) state lawmakers repeatedly refusing to make annual contributions to the system, 2) investment losses from the 2007 financial crisis and now the COVID downturn, and 3) especially risky hedge fund investments that generated big fees for politically connected Wall Street firms, but especially big losses for the state’s portfolio. (Executives from some of those specific firms are among McConnell’s biggest collective donors, and those firms could be enriched by other parts of McConnell’s federal stimulus bill.

The pension emergency in Kentucky has become so dire that teachers staged mass protests last year, resulting in national headlines and a PBS Frontline special, and a court case that ultimately overturned the Republican legislature’s proposed pension cuts, which the GOP literally attached to a sewer bill.

Typically, a state facing this kind of budget catastrophe would be psyched to have its senator in a prime position like Senate Majority Leader, so that it could have some extra special leg up in securing federal assistance to prevent cuts to pensions and other basic public services.

But McConnell isn’t typical — he is as close to a comic-book villain as has ever occupied an office in the highest ranks of America’s legislative branch. And so rather than taking up Democrats’ offer to work on a bipartisan aid package, McConnell is positioning himself to block the very aid that would especially help hundreds of thousands of his own constituents during his state’s dire emergency.

Empowering States To Use Bankruptcy To Crush Workers

Instead, McConnell is proposing to empower states like Kentucky to declare bankruptcy — a financial maneuver that in practice could allow states to reverse their promises and slash retirees’ promised health benefits and subsistence income.

For retired teachers in Kentucky, a state declaration of bankruptcy and subsequent reneging on promised benefits might mean huge cuts to fixed incomes and medical coverage in the middle of the pandemic.

While retirees struggle to make ends meet, Republicans continue to depict government workers as greedy pigs getting rich off taxpayers. That portrayal is designed to create political support for letting states use bankruptcy to fleece workers — a top consevative movement goal for at least a decade.

“A new bankruptcy law would allow states in default or in danger of default to reorganize their finances free from their union contractual obligations,” wrote Jeb Bush and Newt Gingrich in a 2011 op-ed that explained the overall scheme and demonized public employees. “In such a reorganization, a state could propose to terminate some, all or none of its government employee union contracts and establish new compensation rates, work rules, etc…The lucrative pay and benefits packages that government employee unions have received from obliging politicians over the years are perhaps the most significant hurdles for many states trying to restore fiscal health.”

This is not the entire article. Open the link to read it all.

McConnell is fleecing the people who elected him.

He will be on the ballot in November.

If you live in Kentucky or if you have friends there, please send them David Sirota’s article.

The people of Kentucky need a Senator who represents them, not Wall Street.

Sue Legg of the Florida League of Women Voters wrote here about concerns about teachers’ pensions and whether the 2020 legislature is planning to undermine them.

She writes:

There are rumblings that the 2020 Florida Legislature may revise funding for the Florida Pension Plan.   There is no question that the retirement system revenue has declined; it has not been 100% funded since the 2008 recession. The current rate is about 84% of the cost if all people retired at one time. Of course that is an unlikely scenario, but there are now more people vested in the system than are contributing to it. One million public employees participate in the system, about half are teachers and the others are local and state government employees. As retirees increase and new participants decrease, covering costs becomes more problematic…

Pensions are not the problem..The real question as always is whether funding pensions is mostly a political, not a financial issue.  The National Association of State Retirement Administrators cited a report stating that an 80% funding level is the federal benchmark for financial stability of state pension systems.  Florida’s level exceeds that benchmark. Nevertheless, there is a political divide over providing pensions, and it is closely tied to those supporting school privatization.  Florida charters and private schools typically do not contribute to retirement systems, and the resulting high teacher turnover keeps salaries lower.   Thus, there is more money available for management companies in the private sector.   This is not a recipe for a high quality educational system.

 

The Kentucky governor’s race is over at last.

Matt Bevin conceded defeat.

Kentucky Gov. Matt Bevin on Thursday conceded to Attorney General Andy Beshear after a recanvass of votes confirmed Mr. Beshear’s victory in last week’s governor’s election.

“We’re going to have a change in the governorship based on the vote of the people,” Mr. Bevin, a Republican, said in a brief speech from a podium in front of the governor’s office.

Mr. Bevin, who had raised unspecified allegations of voter fraud and left open the option of challenging the results, instead acknowledged the victory of Mr. Beshear, a Democrat and the son of a two-time Democratic governor.

Mr. Beshear’s margin of victory remained unchanged after the recanvassing, according to the secretary of state: 5,136 votes out of more than 1.4 million cast.

Thank you, teachers of Kentucky! You remembered in November, as you promised.

Trump won the state by 30 points in 2016. Bevin’s attack on teachers and on their pensions ended in his defeat.

Democrat Andy Beshear, Attorney General of Kentucky, defeated hard-right Republican Governor Matt Bevin!

Hooray!

Bevin made war on public schools and teachers and threatened teachers’ pensions. He allied himself with Trump and Betsy DeVos. Bevin threatened to cut healthcare insurance. Teachers in Kentucky walked out and demonstrated at the state capitol to oppose Benin’s efforts to destroy their pension rights.

Trump visited Kentucky to help Bevin.

Bevin wanted to make the election a referendum on Trump’s impeachment proceedings. He wanted to distract voters from his agenda to privatize schools and shred the social safety net..

Bevin lost. He hasn’t conceded yet. But he lost.

Here is local news.

“After a hard-fought race marked by angry rhetoric about teachers and the intervention of national politics, Kentucky voters finally got the chance to make their decision at the ballot box.

“In the end, Attorney General Andy Beshear was able to emerge victorious in a gubernatorial race being watched as much for what it says next year’s national elections as it does about the direction of the commonwealth.

“Both men were with supporters in Louisville on Tuesday night watching as the results came in.

“The Democrats — Beshear and his running mate, Jacqueline Coleman — placed much of their focus on Kentucky’s educators and their anger over moves by the Bevin administration to make changes to their pensions.”I believe the more Kentuckians that come out, the better our chances are, because people are hungry for a governor that listens more than he talks and solves more problems than he creates,” Beshear said earlier Tuesday.

”Bevin, a Republican who has polled consistently as among the least popular governors in the nation, highlighted his anti-abortion rights agenda and close ties with President Donald Trump. He switched his lieutenant governor running mate this time out to Ralph Alvardo.”

Lesson in Kentucky: Don’t run against public schools!

PS: The Associated Press says the race is too close to call. CNN has declared Beshear the winner.
With 100% of the vote counted, Beshear is ahead by about 4,500 votes.

From the New York Times:

Next update in :02
Latest: The Associated Press says the race is too close to call.2m ago
Candidate Party Votes Pct.
Andy Beshear Democrat 711,955 49.2%
Matt Bevin* Republican 707,297 48.9
John Hicks Libertarian 28,475 2.0

1,447,727 votes, 100% reporting (3,659 of 3,659 precincts)

* Incumbent

The governor’s race in Kentucky has been cast as a showdown between an unpopular governor and an unpopular party. The Republican incumbent, Matt Bevin, has focused his campaign on his alignment with President Trump and his opposition to impeachment, with the president holding a rally on Monday in Lexington to reciprocate the support. The Democratic challenger, Andy Beshear, the state’s attorney general, has been buoyed by the governor’s diminished popularity — Mr. Bevin is among the least popular governors in the country. 

 

 

Remember that Trump likes to boast of his love for “clean, beautiful” coal.

Now Murray Energy is filing for bankruptcy and will shed $8 billion in pension and health-care liabilities owed to miners.

NPR reports that Murray was one of Trump’s biggest funders:

The Trump administration has spent three years trying to help the coal industry by rolling back environmental regulations and pushing for subsidies for coal-fired power plants. Still, the long list of coal company bankruptcies has continued, and dozens more plants have announced their retirement since President Trump took office.

Now the list of bankruptcies includes a company headed by one of Trump’s most vocal supporters. Murray Energy Corp. filed for Chapter 11 on Tuesday morning.

The company says it reached an agreement to restructure and continue operating. As part of that, Bob Murray — the chairman, president and CEO — will relinquish two of his roles. His nephew, Robert Moore, will become president and CEO while Murray will stay on as chairman.

“When you’re a private company and you’re in financial failure, the first person that loses everything is the owner. And that’s what will happen,” Murray tells NPR.

Murray has had a close relationship with the Trump administration. He donated $300,000 to Trump’s inauguration and has met with administration officials to advance the coal industry’s interests.

Dino Grandoni of the Washington Post writes:

Murray Energy Corp., the nation’s largest private coal giant, filed for Chapter 11 protection on Tuesday, Taylor Telford and I reported Tuesday. That move makes it the fifth coal company to land in bankruptcy court in 2019 as coal is being being squeezed out of the U.S. power market by cheaper options such as natural gas, solar and wind power.

The long-anticipated bankruptcy proceedings also put the United Mine Workers of America’s already fragile and underfunded pension plan on even shakier ground, The situation could potentially spur a divided Congress and Trump, who has championed coal workers, to bail out the miners. Currently, Murray Energy pays into the pension plan for UMWA, which represents a large chunk of the company’s full-time employees…

But it is underfunded also because other coal companies have shed their pension obligations through bankruptcy. Among the billions of dollars of debt Murray Energy wants to restructure — or get rid of entirely — are its contributions to the pension plan. Excluding one of its subsidies that is not part of the bankruptcy proceedings, Murray Energy with about $2.7 billion in funded debt, as well about $8 billion in actual or potential obligations to fund pension and benefit plans, according to court filings.

Robert Moore, the company’s new CEO, hinted in a court filing that Murray Energy may seek relief from its pension obligations.

“Murray’s employees are its lifeblood… Nonetheless, the cost of servicing its funded debt, together with the myriad of obligations Murray has to current and former employees, including to a pension fund that has been abandoned by other employers, have substantially reduced liquidity,” Moore wrote to the bankruptcy court. a court filing….

Manchin and some other senators, including Republicans Shelley Moore Capito (W.Va.) and Rob Portman (Ohio), have pushed for legislation that would transfer certain federal funds into the pension plan.

“We’re talking about 82,000 miners who are going to lose their pensions, and we’re fighting this,” Manchin, whose state is home to large Murray Energy operations, said in a radio interview on West Virginia MetroNews on Tuesday.

But the idea of the federal government bailing out the union miners has divided Senate Republicans. Other budget-minded senators from coal-mining states, such as Mike Enzi (R-Wyo.), have objected to using federal appropriations to bail out a private pension plan.

Standing in the middle of that divided Republican caucus is the most powerful coal-state senator of all: Senate Majority Leader Mitch McConnell (R-Ky.)

Manchin accuses McConnell of “still sitting on” his bill. McConnell met with UMWA members from Kentucky earlier this year and shares their concerns about the potential insolvency, according to McConnell spokesman Robert Steurer. While his office added that McConnell “supports the ongoing process to find a bipartisan solution for pension reform,” it did not commit to bringing any particular legislation to the floor.

Randi Weingarten, who is both president of the American Federation of Teachers and a veteran lawyer, describes the AFT’s efforts to save the pensions and benefits and dignity of teachers in Puerto Rico as the Island faced bankruptcy and predatory lenders.