America has a retirement security crisis—not a Social Security crisis, the AFL-CIO Executive Council said today in its annual winter meeting in Lake Buena Vista, Fla. And the answer is an across-the-board increase in Social Security benefits.
Half of working Americans have no retirement plan at all at work. Most of those who have a retirement plan are in 401(k) savings accounts where the median balances are less than $30,000. Taking into account all sources of income, it is estimated that the gap between what working Americans need to maintain their standard of living in retirement and what they actually have is $6.6 trillion….Fewer and fewer workers are now covered by defined-benefit pension plans. Retirement savings have been decimated by losses in the stock market. Working families have lost trillions of dollars of home equity with the collapse of the real estate bubble. The stagnation of wages has made it harder for workers to save for retirement. And the inexorable rise of health care costs is taking a bigger and bigger bite out of retirement income.
If America were to craft a solution to the retirement crisis, it would have the same components as Social Security—shared responsibility, pooled resources, portability and security, for example. But instead of increasing Social Security benefits to meet the real needs of real working families, foes of Social Security are attempting to cut it and "have spent enormous amounts of money spreading misinformation about the program."
The truth is that Social Security is not in crisis. It can pay all scheduled benefits through the year 2036 and three-quarters of all scheduled benefits thereafter. If Social Security were a pension plan, it would be in the “green zone”—the healthy zone—under the Pension Protection Act. Social Security does not contribute one dime to the deficit, it is legally prohibited from borrowing or going into debt and it is not a significant driver of long-term fiscal imbalances.
The terms of this debate must be changed, the council said, by focusing on finding a solution to the crisis of retirement security, "because this is a debate in which benefit cuts have no place."