By Al Norman
In the fall of 2008, the Goldman Sachs Group, which describes itself as “a leading global investment banking, securities and investment management firm,” received nearly $13 billion in a U.S. taxpayer’s bailout for securities it held in failed insurance company AIG.
The CEO of Goldman Sachs, Lloyd Blankfein, had his salary tripled in January of 2011, and received a stock bonus of $12.6 million — despite the fact that his company’s income had plunged, and more than 1,000 GSG workers had been laid off, their jobs outsourced to Asia.
CBS News interviewed Blankfein on Nov. 19. He was asked about the “fiscal cliff” facing Congress and the president. Here’s what this wealthy banker had to say:
Blankfein: You’re going to have to undoubtedly do something to lower people’s expectations — the entitlements and what people think that they’re going to get, because it’s not going to — they’re not going to get it.
CBS: Social Security, Medicare, Medicaid?
Blankfein: You can look at history of these things, and Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career … The retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained. Because we can’t afford them.
A week later, White House spokesman Jay Carney told CBS News that Social Security was not part of the fiscal cliff problem. “We should address the drivers of the deficit and Social Security currently is not a driver of the deficit.” Social Security is solvent for another 21 years.
That position was reflected in the comments of Sen. Richard Durbin, D-Ill, the number two Democrat in the Senate. “Social Security does not add one penny to our debt — not a penny,” he told ABC News. “It’s a separate funded operation, and we can do things that I believe we should now, smaller things, played out over the long term that gives it solvency.”
But for some lawmakers, Social Security is just too big to ignore. “I don’t think you can look at entitlement reform without adjusting the age for retirement,” Sen. Lindsey Graham, R-S.C. said.
So what’s going on here?
Social Security is not an entitlement. It is a trust fund. If a worker does not pay into it, he cannot draw out of it. The reason people like Blankfein are eager to change Social Security is because they view Social Security as a mandated tax on business. They would rather not have their companies pay into the trust fund. But if workers did not have their employers matching their payroll contributions, the benfits paid out by Social Security would be cut in half. So Big Business does not want to chip in towards their workers’ retirement. Millionaires like Blankfein pay only a very small percentage of their salary into the trust fund. And he will not rely on it for his comfortable retirement. But as a mandated payroll tax, it’s something Blankfein would prefer not to pay. Goldman Sachs wants to “lower expectations” by delaying retirement, or cutting the cost of living adjustment.
Seniors are not asking for a bailout, like Mr. Blankfein’s company. All they want is some return on the money they contributed over many years to help other retirees. Social Security has nothing to do with the fiscal cliff. Wall Street bankers should get their house in order, and keep their hands off Social Security.
Al Norman is the Executive Director of Mass Home Care. He can be reached at 978-502-3794, or at: info@masshomecare.org
