By Brian Washington
For too many people, who have worked hard their whole lives, having enough money during their retirement will likely mean having to work a part-time job to make ends meet during the golden years. If certain state politicians have their way, educators who have dedicated their lives to serving children could be in the same situation. Education Votes recently interviewed U.S. Senator Tom Harkin, chairman of the Senate Health, Education, Labor and Pensions committee. Harkin, an outspoken advocate for students, public education, and the middle class, believes too many Americans are worried about their ability to retire with dignity and financial independence.
EV: Why is this issue, retirement security, one everyone should be concerned about?
Harkin: We are facing a real crisis. The statistics are frightening: half of all workers have less than $10,000 in savings, and the retirement deficit-the difference between what Americans have saved and what they should have saved for retirement by now-is more than six trillion dollars.
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That is going to have very real consequences. Retirees without adequate resources in retirement are going to rely more heavily on our social safety net programs and on their families, straining both government and family budgets.
EV: Young people are entering the workforce later, which means they are getting a late start on retirement savings. Meanwhile, those who are about to retire or have already retired are having their benefits cut. This seems like part of the perfect formula for that crisis you mentioned earlier?
Harkin: There’s no question that we are facing a real crisis. That’s why I have been working for the past few years to come up with common sense solutions to make retirement safer and more secure. Last year, I put out a report called “The Retirement Crisis and a Plan to Solve It.” In that report, I put forth a pair of proposals that would really help middle class families prepare for retirement.
First, I proposed making sure that those without a pension have easy access to a new type of retirement plan called a USA Retirement Fund. Those funds would be a middle ground between a pension and a 401(k), and they would ensure that everyone has the opportunity to earn a retirement benefit that they can’t outlive. The funds would also make it significantly easier for employers – especially small businesses – to offer a pension.
I have also proposed improving the most efficient and effective retirement program we have – Social Security. I put out a bill last year that would increase benefits for everyone in Social Security by about $60 per month, make sure that seniors see cost of living adjustments that really reflect the actual cost increases seniors face, and extend the life of the trust fund for almost two decades more. You can do all that – and really help millions of middle class families – just by lifting the cap on the payroll tax.
EV: Retirement benefits for educators and other public employees are under attack in many states across the country. What do you think is behind this?
Harkin: The attacks on teachers, firefighters, police officers, and other public servants are simply appalling. We are facing a retirement crisis, but instead of focusing on solutions, a handful of ideologues and demagogues are trying to score political points by attacking pensions and scapegoating public servants for state and local budget shortfalls. To be clear, pensions aren’t the cause of states’ fiscal problems, and retired public employees aren’t living high-on-the-hog on the taxpayers’ dime. Those are myths being spread by people who want to dismantle the pension system. I will be the first to admit that there are things that can be improved, but we should be finding ways to lift everyone up rather than trying to knock public servants down.
EV: Retirement security is not a “sexy” issue so how do you get people to care about it?
Harkin: People already care about retirement security. Polls routinely indicate that not having enough money in retirement is a major concern for almost everyone, and only 14% of Americans are “very confident” they will have enough money for retirement. My job is to make sure that Washington, D.C. gets the message from Main Street. That is why I have been holding hearings in the HELP Committee to highlight the retirement crisis. And that is why I put out a report last year discussing the retirement crisis and proposing some solutions. I’m hopeful that, over the next two years, we can take some common sense steps to solve the looming crisis and help the struggling middle class.