Trump’s budget trades workers’ retirement security for CEO tax cuts
America is facing a retirement crisis. Just 14 percent of all U.S. employers even offer a 401(k) or similar defined contribution plan to their workers, and fewer than one-third of employees are able to save anything in a workplace retirement account.
The news is even more dire when it comes to traditional pensions – still the gold standard of retirement income security. According to a recent analysis by Pew Charitable Trusts, just 10 percent of workers over age 22 work for an employer that provides a traditional pension.
Simply put, most Americans have no retirement plan at all – and earn too little to be able to afford to save anything for life after work. Social Security is likely to be their only source of income in retirement.
Unfortunately, the federal budget President Trump delivered to Congress last week will only worsen this problem. In fact, the Trump administration wants to cut retirement benefits for the federal government’s own workforce.
The Trump plan would force federal workers to pay far more of their income toward their pension benefit – which is fully funded – even though almost all private employers who provide traditional pensions pay the entire cost of this benefit. At the same time, the administration proposes to slash the benefit that federal retirees receive.
Charging more and providing less in return – that is the administration’s grand plan for its workforce.
Making matters worse, the savings from cutting federal workers’ retirement would go toward a massive set of tax cuts to further enrich corporations and wealthy individuals.
How does a self-described friend of workers offer billions in tax cuts for the wealthy on one hand, while supporting savage cuts to middle-class workers’ pensions on the other?
Does a Border Patrol agent struggling to put his kids through college deserve to have his pension slashed so a Fortune 500 CEO can buy a second yacht? Does a VA nurse deserve to put her retirement plans on hold for another five years so a venture capitalist can tack another month onto his trip to Monte Carlo?
Of course not. The American people know what’s fair, and raiding the already modest retirement benefits of the people who inspect our food and keep dangerous criminals behind bars is beyond the pale. These proposals are a horrendous example of misplaced priorities that the American public should reject.
The average chief executive officer from private-sector companies on the S&P 500 Index was paid $13.1 million last year – 347 times more than the average rank-and-file worker, and a six percent increase from the previous year, according to a recent data analysis by the AFL-CIO.
The highest paid employee in the federal government earns $400,000 a year – and that’s the president of the United States. About 600,000 federal employees earn less than $50,000 per year, and about 900,000 federal employees make under $60,000 per year, according to the Office of Personnel Management.
Most federal employees are paid a modest salary that’s actually less than what they would earn doing comparable work in the private sector. And despite claims to the contrary, the benefits federal employees receive are no more generous than what private employers provide to workers who are similar to the government’s. The health insurance federal employees receive is not particularly generous – the government pays an average of 70 percent of premiums, although that varies from 55 percent to 75 percent.
President Trump’s budget would take the government on a race to the bottom, joining the worst employers who have utter disregard for their employees’ economic well-being.
Today, almost all federal employees earn a living wage and receive fairly decent benefits – and that’s nothing to apologize for. We should expect our government to provide affordable healthcare to the nurses who care for our veterans and a fair pension to the Border Patrol agents who risk their lives to keep drug runners and terrorists out of our country.
If more private-sector employers followed the government’s model, millions more workers would be better able to support themselves and their families. Instead, too many full-time workers must rely on public assistance programs like food stamps, Medicaid and subsidized housing just to survive – while corporate executives and shareholders earn record profits.
President Trump’s budget would eliminate or drastically reduce federal funding for many of those public assistance programs as well – even as his own policies will force more federal workers to rely on them.
Let’s not add federal employees to the group of Americans who won’t be able to retire with any kind of economic security. Let’s add everyone to the group of Americans who will.
J. David Cox Sr. is president of the American Federation of Government Employees, which represents 700,000 federal and D.C. government employees nationwide.
The views expressed by this author are their own and are not the views of The Hill.
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