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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Dems Self-Inflicted Wound: Weak Leadership for Retirement Reform

If you had to pick the Democratic Party’s most harmful blind spot, a good choice would be its general indifference to retirement policy. We’re so busy chasing after young voters and other constituencies that we have apparently ceded the senior vote to the conservatives, who gleefully accept it as a freebie, offering seniors nothing but fear-mongering about government spending and tax cuts for the wealthy in return.
Yes, I know senior voters tend to cast their ballots for the GOP, at least the ones who show up. And show up they do in the midterm elections in more impressive numbers than any other constituency, providing a major reason why Dems usually get creamed in non-presidential election years.
Into the 2014 midterm fray writes Jane White, author of America, Welcome to the Poor House. in her HuffPo post, “Why Are Many Members of Congress Among the Few Americans That Can Retire?,” White observes:

Sen. Tom Harkin (D-Iowa) deserves praise for attempting to tackle our retirement crisis — one of the few politicians to do so. However, rather than mandate that all employers offer a retirement plan and contribute the equivalent of at least 3 percent of pay, as is the case with the U.K. starting in 2018, Harkin’s legislation would simply allow employees who aren’t covered by a plan to contribute 6 percent of their own paycheck to a retirement account. Except that individuals can already do this if they invest in a mutual fund on their own!
The lack of mandates for an adequate retirement plan is ironic given that most long-serving members of Congress look forward to more generous pensions than the vast majority of their constituents. A member of Congress retiring with 20 years of service under Federal Employees’ Retirement System and a high three-year average salary of $174,000 will get an initial annual FERS pension of more than $59,000 — on top of Social Security.
Compare that pension paycheck to the typical American worker. According to the Federal Reserve Board, the median amount saved in 401(k) accounts and other savings for those age 55 to 64 was $100,000 in 2010. Observing the 4 percent withdrawal rule, a nest egg of $100,000 turns into a measly annual income of $4,000, or about $77 a week. Even those Americans covered by a regular pension are likely facing pension poverty, as the New York Times recently reported as a result of the stock market crash and benefit cutbacks. The U.S. has one of the least generous pension systems in the advanced world; only six member countries of the OECD have lower pension wealth.

It’s not hard to understand why there is a hell of a lot of anger among senior voters, especially when you take into account all of the pension rip-offs that have occurred over the last two decades. What is harder to understand is why Democrats are not raising more hell about it. Can it be that seniors expect the GOP to be indifferent to their retirement living standards, while reserving most of their anger for Democrats, who they feel have betrayed them with inaction? I have to wonder.
White cites a media blackout as part of the problem, and she is correct that there are not many thoughtful articles that explore the politics of retirement in America, other than the usual screeds about Social Security privatization. She adds:

Unfortunately, outside of the SEIU, the brains behind the advocacy group Retirement USA, there has been no hue and cry on Capitol Hill regarding the retirement crisis. Here’s a link to their report on our $6.6 trillion retirement deficit. As I’ve said before, we’re looking at a perfect storm of economic catastrophe. If the vast majority of baby boomers can’t afford to retire, that bodes ill for the next generations’ ability to find work. If you agree, please contact your Congressperson to ask Sen. Harkin to hold hearings on this topic. If we can’t reform our system, we at least need to communicate to boomers that they need to stay at their decently-paying jobs at least another decade, rather than “retiring” and ending up taking part-time, benefit-less minimum-wage jobs to try to make ends meet.

Credit Harkin with having the mettle to at least address the problem head-on, even if you agree that his reform proposals don’t go far enough. But, is it too much of a stretch to envision some sharp Democratic candidates with large senior constituencies pulling off a few 2014 upsets with a bold, visionary palette of retirement reforms? Really?

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