GOP, Like Companies, Wants Workers to Carry the Safety Net

LA Times ^ | May 9, 2005 | Ronald Brownstein:

[Crackingham]

In an era when employers are retreating from the guaranteed benefits that once defined the American social safety net, should government accelerate or resist the trend? That's a critical question surrounding not only President Bush's proposal to restructure Social Security but also Republican plans to rethink the way the nation provides healthcare to the elderly (through Medicare) and the poor (through Medicaid).

Across all these fronts, Bush and other Republicans are looking to limit government's financial exposure and shift more of the risk for ensuring pension and healthcare security to workers and retirees in the name of increasing choice.

That's exactly what employers have done for a generation, replacing plans that guaranteed workers a fixed monthly pension with systems that obligate employers to make only a monthly contribution to investment accounts workers manage themselves. On healthcare as well, employers are replacing programs that provided workers a defined benefit with alternatives that promise only a defined contribution.

Bush and other Republicans want to realign the public safety net along the same principles, while Democrats want to maintain, as much as possible, the defined benefits guaranteed by Social Security, Medicare and Medicaid. As the baby boom generation retires, this argument looms as one of the new century's defining political struggles.

The revolution in private-sector benefits paints the backdrop for this political debate. In the age of global competition, employers are steadily eroding the cradle-to-grave promises of retirement and healthcare security that American business offered during its post-World War II zenith.

"The philosophical move going on is employers are increasingly limiting their obligations," said Robert Blendon, professor of health policy and political analysis at Harvard. "They are passing more of the costs onto individuals and letting them figure out how to deal with rising healthcare costs … [or] rising inflation as they retire."

[trebb]

. . . while Democrats want to maintain, as much as possible, the defined benefits guaranteed by Social Security, Medicare and Medicaid.

More propagandist lies - those benefit "guarantees" are just as valid as "free health care for life" for military that stayed 20 years and retired. Many of us stayed 20 years and retired and now have to pay for health insurance. And the public still wants Uncle Sugar to "guarantee" them benefits. the only guarantee is that for every promise, taxes will be withheld.

[glorgau]

Yeah, like GM workers are going to be seeing full pensions in 20 years. Not.

Never depend upon anyone else for your own security.

[ClaireSolt]

Insurance plans should be provided by insurance companies freely competing for business, imho. Government should get out.

[Doctor Stochastic]

A defined contribution plan (one that you can take with you, leave to the heirs, etc.) is more valuable to the worker. It's money now, not promise of money later.

Even for the conservative investor, their are ways beat SS and many pension plans. A 5-year laddered CD collection isn't bad. One invests the first years contribution in a 5-year CD; same for the 2nd through 5th years. The 5th years contribution is combined with the results of the 1st years CD proceeds and invested into another 5-year CD.

Of course, one could use 8-year or whatever.

[NeoCaveman]

That's exactly what employers have done for a generation, replacing plans that guaranteed workers a fixed monthly pension with systems that obligate employers to make only a monthly contribution to investment accounts workers manage themselves. On healthcare as well, employers are replacing programs that provided workers a defined benefit with alternatives that promise only a defined contribution

Except for in the American auto industry, who's bonds have recently been downgraded to junk bond status

[Libertarianize the GOP]

The GOP and Smart Businesses wants the decision maker, the payer and the beneficiary to be the same. It is only when those event are coordinated that market pressures can work.

[Hildy]

Remember the steel workers? THey all lost their pensions and their health benefits when the Companies when belly-up. Not to mention all those who lost their current jobs. It helps NOBODY to keep this scam up.