Posted on 10/24/2011 5:34:32 PM PDT by dragnet2
Retirement programs for former federal workers — civilian and military — are growing so fast they now face a multitrillion-dollar shortfall nearly as big as Social Security.
The federal government hasn't set aside money or created a revenue source similar to Social Security's payroll tax to help pay for the benefits, so the retirement costs must be paid every year through taxes and borrowing.
The government paid a record $268 billion in pension and health benefits last year to 10 million former civil servants, military personnel and their dependents, about $100 billion more than was paid a decade earlier after adjusting for inflation. And $7 billion more was deposited into tax-deferred accounts of current workers.
In addition, the federal government last year made more than a half-trillion dollars in future commitments, valued in 2010 dollars that will cost far more to pay in coming decades. Added last year:
$107 billion in retirement benefits accumulated by current workers.
$106 billion in new benefits granted to veterans. Retirement
More than $300 billion in the snowballing expense of previous retirement promises that have no source of funding.
The government committed more money to the 10 million former public servants last year than the $690 billion it paid to 54 million Social Security beneficiaries.
The retirement programs now have a $5.7 trillion unfunded liability, compared with a $6.5 trillion shortfall for Social Security.
Outgoing Defense Secretary Robert Gates told Congress in June in his final budget testimony that health care costs "are eating us alive."
Rep. Jim Cooper, D-Tenn., a member of the Armed Services Committee, says retirement benefits are an extremely sensitive issue. "We have a disconnect between all these sacred promises we've made and how they are not backed up by anything," he says.
(Excerpt) Read more at abcnews.go.com ...
The current federal retirement is SS., which replaced FERS
It really ticks me off. We stayed for the benefits. Desert Storm destroyed my husband’s sense of smell, I lost a baby after the war when I returned to the ME. Not sure if I would have lost it otherwise. 9 women lost their babies at the same time and rumor had it local women were miscarrying as well. Maybe the fires, I don’t know. We sacrificed so much and this is what we get. First in line to get screwed.
This is robbery, pure and simple and we will end it soon.
lol...
If you actually read my post you would recognize that I did not in any way disparage the contributions of the military nor attempt to equate the jobs of civilian workers with the military. There was also no intent to imply anyone who served is not deserving of their pay and benefits. I merely shared my observations about some of the trends going on in this world that may be resulting in our Congress reneging on our nation ‘s commitments to its veterans.
By speaking of my own experience in the business world I’m illustrating a point that our governing elites are breaking contracts with individuals in all segments of our society at the same time they choose to award undeserved benefits on favored groups and individuals. The pie is shrinking and the politicians and business leaders are choosing to cut back on obligations to people who contributed in the past in order to win the approval of younger people who may or in some cases may not produce in the present. It is not right to cut military benefits nor is it right for a private equity company to deliberately take a viable company through a structured bankruptcy so its pension plan assets can be liquidated leaving its retrees without their pensions while the bankers and owners make millions in bonuses.
In my opinion America is changing and not for the better. I may not have served my country in the armed forces but I have worked in the private sector economy for over 3 decades. I do know that part of our country’s strength is a healthy and growing private sector and I’m appalled by the policies of our political leaders which are destroying our free enterprise system from within. I’m also disgusted these same politicians line their pockets while sending our armed forces around the world to fight and die supporting third world dictators in the name of defending freedom and then on the edge of “victory” pull the troops out leaving those we supposedly fought to save behind to face the horrors of despotism. These adventures waste the lives and limbs of our soldiers not to mention wasting the economic resources of the homeland. Meanwhile these same politicians leave our borders undefended and expose the citizens of border states daily to violence and death from the armed invaders. Our leaders do not honor either our military or the civilian citizens of our nation. Reducing pay and benefits is one dimension of this greater issue.
I’m very aware of the sacrifices military veterans make and the lives they lead. I may not have pulled the trigger on a gun but I have stood on a tarmac and watched my father be taken off a military aircraft on a stretcher to be put in an ambulance after spending three months in a overseas hospital being sewn back together and then spending the next four months going to the US base hospital everyday to watch he and others go through the pain and suffering of rehabilitation. Several years later I sat at his bedside after the tumor attributed to agent orange had been cut out of his head. I’ve listened at night while he screamed at the nightmares of the horrors he and his fellow soldiers experienced. To this day I watch him limp from the shrapnel still buried in his legs and against his spinal chord. I have not experienced what he experienced firsthand but I do understand better than most civilians the consequences our foreign entanglements have on the lives of service people and their families.
I do know my father would never call any of the civilians he voluntarily served to protect in 2 wars a maggot, a pissant, worm food, or dingleberry. To do so would disrespect the people and flag he volunteered to defend. He loves his country, is proud to have served and sacrificed. He respects the rights of every citizen, even the peace demonstrators of the 1960’s who jeered at him while he proudly wore the uniform in public in or nation’s capital. He knows there is no honor in disparaging the people he volunteered to serve no matter what they say to him.
My father is an officer, a gentleman and a humble Christian. I’m incredibly proud and eternally grateful for the sacrifices he and the other distinguished members of the armed services I’ve had the pleasure to know have made for my family and our country. I don’t know you so I cannot begin to judge your character. I do discern from the tone of your post and your name calling you are somehow different from the service people I personally know. I thank you for your service and appreciate everyday the freedoms you and others voluntarily, and in some cases involuntarily served to defend.
As I keep asking myself, what does the government have to do before people realize its broke, both financially and morally?
IBTZ
The Fed retiree leeches never even paid for their retirement - they paid ZERO social security and very little for their retirement plan, amazing that they were exempt from what the rest of us had to pay, isn’t it. Then, they get to retire much earlier and at a higher rate of pay than the rest of us. They should take any money they paid and put it all into the social security and let them live off of that.
Social Security didn’t replace FERS under the Federal retirement system. FERS is the retirement system that replaced CSRS. FERS consists of Social Security and a 401K plan (called Thrift Savings Plan) to which the employee contributes and wherein the government matches a portion of the employee’s contributions.
I’m a Federal employee and don’t consider myself a leech, although I know of many that I would consider leeches. I am just as frustrated as you, but I can’t do a thing about it. I don’t understand why people insist on singling out Federal employees as lazy incompetents; probably because you only hear about the bad ones and then make a broad generalization about all Federal employees.
You lie when you say that “Fed retiree leeches never even paid for their retirement”. All Federal retirees pay a percentage of their gross earnings into the Civil Service Retirement System. You’re correct in that we CSRS employees paid ZERO social security. That was not an option for us, so how could we pay social security when we were requuired to contribute to a different retirement system? I didn’t make the rules about Federal retirement.
When I hired on with the Federal government, the retirement system wasn’t a consideration. My desire was to work in the private sector, but at the time, those jobs were scarce, so I took a job with the Federal government. Those of us who work for the Federal government and do a good job have nothing to feel guilty for. You should be directing your venom towards the Federal government for they way that they take Federal retirement contributions and SS contributions and spend them on other Federal programs instead of investing them to grow the funds.
...You CANNOT TRUST the government to keep any promises...”
You are absolutely correct and it’s been going on for a longer than most folks realize; Just ask the Sioux nation.
Politicians are for the most part useless lawyers that couldn’t make it in the real world of lawyerdom. They are, in essence, the lowest of the low. Literally bottom dwellers and crooks. In order to feel good about themselves, they have to exert control and power over those that cannot, or will not, do anything about it. Politics is the perfect answer for them. In politics, they can lie, cheat, steal, even murder, with impunity while making the rest of us in the country suffer for it. Then, they smile, pat each other on the back for a job well done and run for re-election. Despicable creatures to say the least. Their promises are just hollow words.
Good Points, all. The The liberal politicians and bureaucrats are destroying the financial health of this nation. I just wonder when the anvil will fall on America.
Concerning Ron Paul: Libertarians don’t believe in the military. Yet, they lock their cars and homes. They don’t make sense.
This is no longer true. Fed employees contribute to SS, have a 401k equivalent plan, and a 1% pension. This has been so since the 1980s.
"It is a popular delusion that the government wastes vast amounts of money through inefficiency and sloth. Enormous effort and careful planning are required to waste this much money."
- P. J. O'Rourke
Great quote. Thanks.
For each year, I used the average yield for the longest-term Treasury bond that was available then (usually, 30 years). I simplified it by assuming that my Social Security contributions were invested in that bond at the end of the calendar year.
Each year, I took all the dividends from the bonds I had bought the previous years, and combined it with my contributions and invested them in a new Treasury bond at the average rate for that year.
In just a bit less than 40 years of working, I would have about $800,000 in the bank right now. That's not theoretical: it's historical, based on what is allegedly being done with excess Social Security contribution: invested in long-term bonds.
If I hold the existing bonds to maturity, and continue to purchase bonds at the existing (albeit low) yields, I'd have $1,600,000 at my full retirement age, and $1,850,000 at age 70 if I wait until then to start withdrawing (I have other assets and income I could draw down before then).
Plug that data into www.immediateannuities.com, and you would have lifetime guaranteed income of $13,042/month. Keep in mind that it would be a fixed amount, with no CPI adjustment.
By comparison, Social Security promises to pay me about $5,000 a month, if I wait until age 70 and inflation averages about 3%/year. There won't be enough money to do so, but that's another issue....
But, let's do a direct comparison: at 3%/year inflation after I turn age 70, I'd have to live to age 112 before my inflation-adjusted Social Security benefits would even match the annuity payment. I'd have to live until age 174 in order for the value of the Social Security benefits to exceed the value of the annuity payments.
You’re right, of course. Senior moment, I guess.
Sir,
I owe you an apology. Lately, I am overly sensitive to comparisons between military service and civilian employment. Your post is a helpful comparison. My attack on you was completely uncalled for. The tone, content and name-calling on my part was completely unwarranted. You are a gentlemen.
I am sorry and ask you to accept my apology.
What do think the bailout of 08 and Phoney-Care is about all along?
And where do you think they park these pensions?
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