I missed Meet the Press yesterday and only this morning saw the “strange” excerpts on Drudge featuring the comments of Bill Thomas, the loose-lipped chairman of the House Ways and Means Committee from Bakersfield, CA. Mr. Thomas seemed to be advocating, or at least floating, sex and race based payouts for Social Security.
Being a suspicious type, I moseyed over to MSNBC to read the entire transcript to make sure Thomas wasn’t being quoted out of context. [Why would you do that?--ed. Oh, you know... just for fun.] Well, he wasn’t. Thomas was indeed putting forth the idea that women might get smaller checks because, on average, they live longer. Leaving aside the odd Methusalah-like male who might be stuck in the same old rusty wheelchair at age 98, this is one of the more tin-eared comments I have ever heard a politician make. (Earth-to-Thomas, women are the majority.) It’s hard to tell what he was talking about in the race area, but I’m glad Russert didn’t probe. I don’t want to know. Anyway, by the time whatever changes kick in, 2040 or so, let’s hope we’re finally and forever in a race-blind society.
Meanwhile, in all this partisan brouhaha over Social Security, one thing suddenly struck me (probably struck a lot of others a long time ago). Those of us who are lucky enough to have business or union pensions (like Members of Congress and the Writers Guild of America, for just two examples), which almost always pay out vastly more money for our retirements than Social Security, know that those plans depend for their future stability on prudent stock investment. I don’t hear anyone complaining about that – from either side of the aisle.
One assumes that Thomas advocates paying out more money to black people, because blacks have shorter life expectancies. (This is what a private insurance company offering annunities would do, if insurance companies were allowed to consider race.)
Of course, one could extend this line of reasoning – why shouldn’t smokers get higher Social Security payments and marathoners lower Social Security payments?
Those of us who are lucky enough to have business or union pensions (like Members of Congress and the Writers Guild of America, for example), which almost always pay out vastly more money for our retirements than Social Security, know that those plans depend for their future stability on prudent stock investment. I don’t hear anyone complaining about that – from either side of the aisle.
… and people would complain loudly (and rightly so!) if the pension plans yielded only the 1 percent or so that we can, at best, hope for as a yield on our contributions; and they’d be downright outraged if their pension plans just went away if you die early, with the remainder going to the pension management company.
When my wife worked for a city-owned hospital, she didn’t have to pay Social Security taxes. Instead, the money that would’ve gone into SS was deposited into a 401K like account called PERA (Public Employees Retirement Association). The money was invested in her choice of mutual funds and grew quite rapidly.
I don’t know how common it is for government employees to be able to opt out of SS (I had to pay into SS when I was in the military), but if they can have choices, why can’t everyone else? Don’t get me wrong, I’m in no way suggesting that government employees should be forced into SS. Just the opposite, I want everyone else to have the same options as government employees. Why shouldn’t we?
Was this guy in the insurance business before he was in congress? In the insurance context, his comments fit – insururers for the most part deal with reality, not politics or political correctness.
For a politician, this does sound dumb. The government is only supposed to discriminate against non-protected minorities like small business owners (death tax) and those with a higher than median income.
There is a legitimate question of fairness regarding male/female projected life spans and benefit payouts. However, politically it would seem to be silly to even touch it.
Your pension arguments also apply to another issue: the attacks on big corporations by the left. Where do they think their teacher’s unions and government employees unions put their pension money? They are the largest owner of big companies as far as I know. CALPERS may be the single biggest one.
“Thomas was indeed putting forth the idea that women might get smaller checks because, on average, they live longer.”
Well, if you start harping on biological differences, that’s where you end up. Conservatives need to make up their minds.
FYI
…I suggested that maybe we could find an employe need that was commensurate to the available profits, considering that profits altogether rarely run to more than one-tenth or one-twelfth of the wage bill. But I didn’t know what the benefit could be.
A few months later Wilson asked me to meet him in New York. “I’ve thought about your suggestion that profit-sharing has to be applied where it can make an impact. What about employe pensions? There 4 or 5 percent can make a difference, and social security isn’t going to provide adequate employe pensions for people whose lifetime wages have been as high as those of automobile workers are likely to be.” “How will you invest those funds?” I asked. “In government bonds?” “Oh no,” he said, “in the stock market. Altogether they should be invested the way a prudent financial manager would invest them.” “But that would make the employes, within twenty-five years, the owners of American business,” I came back. “Exactly what they should be,” said Wilson, “and what they must be. For the income distribution in this country surely means that no one else can own American industry unless it be the government.”
Wilson waited until employe pensions became a union demand. But when they did, in 1950, he was ready. There had been, of course, employe pension plans that invested in common shares: the one at Sears Roebuck, started in 1916, owned, by 1950, one-third or more of Sears Roebuck common stock. But Wilson’s pension fund at GM was the first that invested according to sound principles of financial management, and that meant in the shares of any promising company except those of the company that employs the future pensioner, i.e., the company in which he has a big financial stake through his job.
I was not convinced, and said so. When Wilson put through his pension plan in 1950, I published an article in Harper’s Magazine in which I sharply criticized the “Mirage of Pensions,” as I called it. I pointed out that company pensions would restrain individual mobility, and that vesting them, i.e., giving employes a vested right to their pensions, would make the pension charges unbearably high. I pointed out that such a plan would give the employes of rich and successful companies an unfair advantage over the people employed in small, poor, and unsuccessful businesses. And I argued—I thought cogently—in favor of a universal government pension plan based on progressive taxation. All of my arguments, I submit, have been proven right…but irrelevant. Wilson’s scheme prevailed. By now the United States had 500,000 private pension plans. They have all the problems I anticipated. But they also control the American economy, own one-third of the equity capital of America’s big and medium-sized businesses, and will in the not-so-distant future make employe control a reality by giving employes or their representatives a major voice on the pension fund board. The pension funds may well go bankrupt, as I predicted in the Harper’s article of 1950; but they already have made America’s employes into America’s capitalist. And that, I suspect, rather than employe pensions, was what Charlie Wilson—patternmakers’ business agent, Eugene Debs Socialist, president of GM, and arch-capitalist—had in mind all along.
—Peter F. Drucker, Adventures of a Bystander (1978)
LarryJ
I believe it’s very common for government workers to be able to opt out of SS. Actually, I don’t think they opt out, they just have their own thing going.
My son’s in the PD here in Los Angeles and money goes into a separate retirement fund. I believe a buddy of mine who worked for LA County also had the same deal.
The SEIU out here doesn’t seem to be protesting the unfair SS advantage of government workers.
Patrick,
Drucker also said:
To me, this seems to be the direction of capital (public and private) that will ensure the stability of society in a Democracy, a natural “evolution” promised by the “ownership society” not yet completely verbalised by President Bush.
Ugh,
I am going to quote from my 1967 tax statement from when I was in the Army.
Total wages $1664.73
Federal taxes $141.48
FICA $73.22
What a rip.
This Thomas seems odd to say the least. I have seen this guy on something else and wondered how he got elected. simple: California.
But I will say that my mother took her SS early due to helath reasons and got less a month than she would have had she waited a couple of years longer. So maybe his comments have something to do with that.
Since I already responded to this topic on the discriminations blog, I am reposting my comments here.
By the way, if you think this concept has not already been implemented you are sadly mistaken. TIAA/CREF is the pension plan for universities/non-profits. The amount of money in your retirement account is based solely on the actual amount of contributions put in by you and your university. Thus, when TIAA/CREF calculates an annuity, since it is based on life expectancy, a man would get more money per year than a woman. However, since women live longer, the total payout would be the same for a man and a woman. Seems fair, right? This is the way the insurance industry works, correct? Well if you think that, it is only because you are a man.
The women professors had a different idea of what was fair. They sued TIAA/CREF to prevent women from being “discriminated against”. The suit went all the way to the Supreme Court and surprise, the court agreed with the women. Thus, men and woman now get the same amount per year on their annuity, even though women will live an average of 6-7 years longer. To paraphrase Animal Farm, men and women are equal, but women are more equal than men.
Richard Nieporent: “…women are more equal than men.”
It took Orwell AND the Supreme Court to realize this?
So sorry for the OT “Que Pasa, Hombre”. I just tried Tim Blair’s site and got a “This Account Has Been Suspended. Please contact the billing/support department as soon as possible.”
Seems less “accidental” this time…
Charlotte, according to Instaundit Tim’s site is down for overrunning the bandwidth on his server, and is being moved to another Hosting Matters server to deal with it.
If I were Tim, I’d be a little pissed off about the “account cutoff” page, but it’s not apparently anything particularly nefarious.
Charlie,
I tried Instapundit and others before they declared the admin prob, and all I can say is hmmm. Maybe TB’s site showing “account suspended” is not “nefarious”, but surely it’s hilariously precarious these days.
I smell trolls.
It took Orwell AND the Supreme Court to realize this?
Great retort, Charlotte. We always knew that women were more equal than us. However, before it was de facto and now it is de jure.
Charlotte, Charlie(Colorado) ó Latest word from TB is, comment spammers.
“It’s hard to tell what he was talking about in the race area”
It may have been this:
Editorial: Social Security/Blacks get more, not less, from it
January 17, 2005 ED0117
Link
Bush repeated last Tuesday “African-American males die sooner than other males do, which means the [Social Security] system is inherently unfair to a certain group of people. And that needs to be fixed.” That is an entirely phony assertion; it has been debunked by the Social Security Administration, by the Government Accountability Office and by other experts. Bush and those around him know that. For them to repeat what they know to be a blatant lie is despicable fear-mongering.
Bush didn’t make up this phony line on his own; it comes from the Heritage Foundation, which a number of years ago did a study purporting to show that because African-Americans have a shorter life expectancy than whites, they get less in return for the taxes they pay into the Social Security system.
Heritage failed to factor in the progressivity of Social Security benefits; on a taxes-paid to benefits-received ratio, those with lower incomes get more back. Blacks tend to earn less than whites, and thus their Social Security benefits are larger in comparison to taxes they pay.
Social Security is more than retirement benefits. It also includes survivor and disability benefits. Blacks benefit disproportionately from those programs. While blacks are 11 percent of the workforce, for example, they are 18 percent of those receiving disability benefits. Almost half the blacks receiving Social Security — 47 percent — are getting disability benefits or survivor benefits.
The Social Security actuaries found that Heritage had exaggerated substantially the amount blacks pay in Social Security taxes and low-balled the benefits they receive. “In fact,” the actuaries said, “results from more careful research reflecting actual work histories for workers by race indicate that the non-white population actually enjoys the same or better expected rates of return from Social Security than for the white population.”
The GAO reached the same conclusion. It said that, “In the aggregate, blacks and Hispanics have higher disability rates and lower lifetime earnings, and thus receive greater benefits relative to taxes [paid] than whites.”
However, before it was de facto and now it is de jure.
As long as it isn’t de minimis!