Progressives need to take a broad and bold approach to helping Americans establish a solid three-legged stool of retirement security.
Make the economy work. Most importantly, progressives must champion economic policies that benefit the many and not simply the few. With full employment and rising wages, Americans can save better, workers can demand better retirement benefits from employers and Social Security’s projected shortfall can be reduced. Universal health care would reduce what families have to spend on health care costs and protect seniors against soaring drug and medical costs. Improved energy policies can help Americans save better by sparing them from rapidly-rising gas and home heating prices.
Strengthen Social Security. Progressives must work to strengthen Social Security and protect it from future assaults.
Hold companies accountable for pensions. Progressives must hold companies to their existing pension obligations. At the very least, progressives should require the following.
- Every company must provide a retirement program for its workers, supplemented with an employer contribution.
- The shop floor must be treated the same as the top floor. If the CEO has a defined benefit pension, workers should get the same; if the CEO has retirement stock options, workers should also. If worker pensions are cut back for a company in distress, CEO pensions should be as well.
- Congress must require companies to fund the pension commitments they make. Congress must shore up the Pension Benefit Guaranty Corporation’s balance sheet to help workers whose companies go belly-up. At the same time, worker pension commitments should be at the front of the line, not the back of the line, in corporate bankruptcy proceedings.
Help Americans save. Progressives should also champion new ideas to help with personal savings. Congress has tried to help with tax deductions for retirement accounts, but this mostly helps the affluent at the top of the pay scale. These benefits should be consolidated into one tax-free savings account, in which the government provides a partial match for the savings of low-income workers (who don’t benefit from the Bush tax breaks).
Start investment accounts. Every American should be provided with an investment account at birth a small sum that will expand tax-free over time and could be tapped to pay for higher education, housing, or retirement. Conservatives will like creating a new generation of investors; progressives will like giving poor and working people a chance to build up assets from birth.