U.S. CEOs push plan to raise full retirement age to 70
Jim McNerney, chairman of Boeing and the Business Roundtable, speaks on Dec. 5, 2012, in Washington. / Saul Loeb/AFP/Getty Images
WASHINGTON An influential group of business CEOs is pushing a plan to gradually increase the full retirement age to 70 for both Social Security and Medicare and to partially privatize the health insurance program for older Americans.
The Business Roundtable's plan would protect those 55 and older from cuts but younger workers would face significant changes. The plan unveiled Wednesday would result in smaller annual benefit increases for all Social Security recipients. Initial benefits for wealthy retirees would also be smaller.
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Medicare recipients would be able to enroll in the traditional program or in private plans that could adjust premiums based on age and health status.
"America can preserve the health and retirement safety net and rein in long-term spending growth by modernizing Medicare and Social Security in a way that addresses America's new fiscal and demographic realities," said Gary Loveman, chairman, president and chief executive of casino giant Caesars Entertainment (CZR).
Loveman, who chairs the Business Roundtable's health and retirement committee, said the business leaders will be meeting with members of Congress and the administration to press them to enact their plan.
The proposal comes as Republican leaders in Congress are calling for spending cuts as part of an agreement to increase the government's authority to borrow. Treasury Secretary Timothy Geithner says the U.S. will exhaust its borrowing authority as soon as mid-February, raising the possibility of a first-ever national default.
President Barack Obama has said he is willing to negotiate deficit reduction with GOP leaders but insists that those talks be separate from decisions to raise the $16.4 trillion debt ceiling. Obama has warned that if Congress does not raise the debt ceiling, the economy could crash and Social Security checks and veterans' benefits would be delayed.
The Business Roundtable is an association of CEOs of some of the largest U.S. companies. Member companies account for nearly a third of the total value of the U.S. stock market, according to the group.
The group has been an ally of Obama in the past, endorsing his proposal to raise taxes on high earners during negotiations over the so-called "fiscal cliff" in December. Obama has embraced some parts of the business group's plan for Social Security and Medicare, but he opposes any plan to privatize Medicare, and has backed away from his earlier support for raising the eligibility age.
The proposal to offer private plans as part of Medicare is similar to a proposal by Republican Mitt Romney when he ran for president last year. Obama and Democrats in Congress campaigned against it, making it unlikely to pass any time soon.
"These ideas were soundly rejected in the last election only a few months ago," said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
The CEOs' plan puts them at odds with many groups that lobby on behalf of older Americans.
In a speech this week, A. Barry Rand, AARP's CEO, denounced proposals to increase the eligibility age for Medicare, saying it would shift costs to employers, state governments and individuals.
"This is pure folly and very dangerous," Rand said.
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Retirees can now get reduced Social Security benefits starting at age 62. Retirees must wait until they are 66 to get full Social Security benefits, a threshold that is gradually rising to 67. The eligibility age for Medicare is 65. The business group's plan would make unspecified accommodations for people with physically demanding jobs.
Social Security and Medicare both face long-term financial problems as aging baby boomers reach retirement, leaving relatively fewer workers behind to fund the massive benefit programs.
The trustees who oversee Social Security say the trust funds that support the retirement and disability program will run out of money in 2033, unless Congress acts. At that point, payroll taxes would generate only enough money to pay about three-fourths of benefits.
Medicare is in worse shape. Its trust fund for inpatient care is projected to run dry in 2024, leaving the program unable to cover all its bills.
"The facts are clear: If we want future generations to have access to Social Security and Medicare, America can no longer afford to wait," said Randall L. Stephenson, Chairman and CEO of AT&T (T). "The time to act is now."
Among the CEOs' proposals—
- Adopt a new government inflation measure that would result in smaller annual increases in Social Security benefits.
- Make initial Social Security benefits more progressive by guaranteeing low-wage workers enough benefits to stay out of poverty, while lowering initial benefits for retirees with higher incomes.
- Require newly hired state and local workers to join Social Security. Some state and local agencies are not part of the system.
- Expand means testing for Medicare benefits so that wealthier recipients must pay more for services.
- Improve Medicare services for low-income people by better coordinating prevention and care for chronic conditions
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We are so stupid, they are very Clever, but Immoral.
Here are Mortality Facts that these CEO's who have the best health care and have not lifted enough to give their saggy butts any tightness.
When a person reaches age 65, 25% of everyone they are born with, are dead.
Of the 75% left, Half of those have Disabilities and Health Issues that prevent them from working full time. Insurance Companies will not issue disability insurance at age 62 and older because of the 50% disability factor.
Since the decimation of Pension funds by the Corporate raiders whose Corporate Executives benefited (from 40 times to 700 times), the money came from creative Accounting schemes). People have no money, it went to the Executives of the Companies they worked for that was raided. The Money went to them (the point 1% of the Richest in America, 49% are Corporate Executives and 19% are Financial people). The money came from the Pension funds, raided over the last 30 years.
So, for these "Butthead CEO's" to suggest raising the age of retirement to 70 is Immoral. They are Immoral. They need their taxes raised to Ordinary Income rates and not 15% to get their "heads screwed on straight".
The very idea, though, of extending the workforce age, before retirement becomes available, at 70 years is probably OK for people who sit in chairs and make decisions. It is lousy for people who work on their feet, or with their hands and arms. We are indeed living longer, but we no longer have the health and abilities to see, hear, or just put in an average 8 hours a day, day after day, as we did when younger, and at the age of 65 that is already showing to be difficult for many people.
The Social Security annual increase should be made more generous, not less.
It is because they have to pay the same amount into SS and Medicare that their employees do, for EACH employee, and they are very worried that if SS and Medicare start tanking, the Fed Gov't will possibly raise the % of the money that both employer and employee have to contribute.
I have a hunch this is their hidden worry. Otherwise, would it really matter to a corporation or CEO how long an employee keeps working? in their minds, they want you to leave when you are 55! It is better for them. Then they have less healthcare costs and lower salaries they have to pay.
I would not be surprised that they are worried about SS and medicare tanking soon, and getting socked by the Fed Govt for a huge % they have to start paying in for each employee.
Who knows ? Or maybe some other hidden accouting or financial reason as to why they want to raise the retirement age.
If they are worried about losing older more experienced (and responsible) workers, all they have to do is offer that worker enough money to stay instead of retiring. Or, as I know of several cases, employees who retire then return to the company on a consultant basis (no benefits) so it works out for both the retired employee and the company. These are folks that are by now in their late 60's or early 70's so it is not like they are going to be on the payroll for years and years. They are also not receiving any type of pension since most companies have done away with pensions.
If the people in DC and these corp types keep playing things will start to get ugly, we are the larger force in the end.
My opinion, retire when you want and take a percentage of your contributions based on a sliding scale. This would allow many to retire earlier opening up jobs for the younger generations who spend far more money then the older generation. They have homes to up-grade, children to feed and cloth and generally will contribute more to the tax base then we do. I'd retire right now and get involved volunteering, maybe start a small business or whatever. It's not that I don't enjoy what I do but I'm sure I would enjoy doing many other things also.
I can understand why Bronco Bummer wants to take the guns away now. They will only become more dangerous over time, not less.