Lately it would seem the public’s discontent with the federal government’s spending spree is growing proportionately to the $13 trillion national debt.
The leadership in Washington has acted as if government spending can solve the nation’s unemployment, health care, housing, energy and banking problems.
After offering $700 billion in tax dollars to bail out Wall Street and pumping out another $814 billion to jump-start the faltering economy, long-term unemployment is still stuck at 9.6 percent. When jobs are hard to find, wages aren’t rising and retirement savings are shrinking, taxpayers have more reason to worry when Washington just keeps growing.
Let’s tally up some other big-ticket items put on the taxpayers’ tab. Federalizing health care ($2.6 trillion); backing up home mortgages ($149 billion) for Fannie Mae and Freddie Mac; and purchasing a 61 percent stake in General Motors ($41 billion). As if that’s not enough, there’s the possibility for another federal bailout lurking around the corner.
The Pension Benefit Guaranty Corporation (PBGC) provides pension protection for 44 million Americans covered by defined benefit plans. Employers pay premiums to the PBGC to protect the pensions promised to their employees covered under these plans. As of September 30, 2009, PBGC reported a $21.9 billion deficit for its current pension insurance program. Now, a huge pension pool has its eyes on hitching its underfunded, over-promised benefits wagon to the PBGC.
The federal bailout binge seems to correlate with the growing disconnect between the American public and Washington. The mindset that over-reaches, overpromises and overspends to fix today’s problems is creating an overwhelming problem for tomorrow’s retirees and taxpayers.
The looming funding gaps in the nation’s pension systems, both private and public, reveal whopping shortfalls between pension assets and pension liabilities. The shortfall puts pension-holders and taxpayers at risk.
I worked on the Senate Finance Committee to make it easier for workers to build a retirement nest egg and prevent another Enron-like scandal from erasing the retirement savings of pension holders. I steered The Pension Protection Act of 2006 through Congress to help boost retirement savings and strengthen pension funding, including reforms that expand portability of retirement plan assets; allow automatic enrollment in 401(k) plans; and help small employers to offer better retirement savings vehicles for their employees.
My congressional oversight work includes matters that relate to pension security, on behalf of the employees, taxpayers and retirees who place their trust in the integrity of the nation’s pension system for their retirement security.
As the Ranking Member on the Senate Finance Committee, I’ve led a bipartisan review of the increasingly complex investment strategies and financial instruments used to manage pension funds. Through a series of bipartisan congressional hearings and a call for greater transparency that would require hedge funds to register with the Securities and Exchange Commission, I continue to put pension security under scrutiny.
This fall, the Government Accountability Office released a review I requested about who makes investment decisions for state and local defined benefit pension plans and what guides their decision making; how plans allocate assets and manage investments; and practices that plans are using to meet governance, investment or funding challenges.
The current effort builds on what I started more than a decade ago to help promote retirement income savings through the Saver Act of 1997. For example, I worked to strengthen the defined benefit pension system to help prevent defaults that harm pensioners and put taxpayers at risk, including my efforts to protect pension-holders and taxpayers when airlines reorganized under bankruptcy protection a few years ago. Still, the PBGC is facing funding shortfalls and battling internal mismanagement issues.
Congress needs to fix what’s broken before putting taxpayers on the hook for yet another bailout. A borrow-and-spend policy prescription has ramped up the national debt, not the national economy.