Alex Blaze

Beyond marriage? Let's move beyond progress

Filed By Alex Blaze | December 31, 2008 3:20 PM | comments

Filed in: Living, Marriage Equality, Politics, The Movement
Tags: beyond marriage, finance industry, France, gay marriage, ira, LGBT, marriage, pensions, progressivism, retirement, social security

American workers have had their retirements under assault for over three decades. They've been losing as companies moved from defined-benefit programs over to defined-compensation and plans that were basically a tool to move worthless or soon-to-be worthless stock onto workers. And this past year, as the economy crashed due to lack of oversight and regulation (as well as due to the completely predictable "never-ending economic development" bubble bursting), even more people have lost significant parts of their retirements and will be forced to re-join the workforce in their 60's, 70's, and 80's or not have enough to eat.

The situation for retirees is pretty bleak, but Bush did just sign the Worker, Retiree and Employer Recovery Act of 2008 (WRERA) into law. The largest part of the act lifts the penalties on those over 70.5-years-old not meeting the minimum required distribution on IRA's, 401(k)s, and 403(b)s in 2009, which means that seniors who want to take out less (and have even less to get by on), won't be penalized and can wait and see if the market improves in 2010.

Also included in the act is the part that gay activists have been celebrating securing "much-needed protection for lesbian and gay couples," some even going so far as to call the WRERA a "gay rights bill," because of a provision that requires that rolling an IRA over to a non-spouse beneficiary (which would include a same-sex partner) be made available to employees.

A "beyond marriage" victory? A case of identity trumping solid policy? More after the jump.

The Pillaging of the Elderly

I would hesitate to call this a "victory" or "progress" or even a "step in the right direction." The traditional three legs of the retirement table - defined-benefit (DB) pension plans, Social Security payments, and personal savings - is an outdated model for looking at retirement. Ever since the ERISA allowed employers to pass the risk that comes with a pension plan onto their workers, DB plans, which pay retired workers based on a fixed rate based generally on seniority and company loyalty, have been in decline. Marketed under the ruse of controlling your own retirement and creating an "ownership society," newer retirement tools have been a significant boon for employers trying to reduce the amount of money spent on employee compensation.

Just two years ago, the dubiously named Pension Protection Act of 2006, passed by the Republican Congress and signed into law by President Bush, continued this assault on DB pensions by making 401(k)s even more attractive to employers. In fact, within a month after it passing, three major employers reduced their DB program. One finance expert called it the "tombstone for defined-benefit plans and resurrection of defined-contribution plans."

Even most industry insiders, except for the most delusional, know that 401(k)s and IRAs, for most workers, are inferior to DB plans.

A Beyond Marriage Victory?

The WRERA was meant to provide some tax relief to seniors who try to get by with even less and clarify a few technical aspects of the PPA, including requiring that employers allow employees to roll over their IRA's into those of non-spousal beneficiaries. This is a big tax break for same-sex partners, caregivers, and other people could benefit from that was originally reserved for only married couples.

In a sense, this could be read as a "beyond marriage" victory - people can leave their IRA's to people who are not necessarily their spouses. That's a good thing for seniors, who might be afraid of losing other means of income and health care benefits should they re-marry. It's also good for LGBT people, who might not be able to marry their significant others with whom they're financially interdependent. And it's good for anyone else who defines their closest family differently than a married spouse.

So it's good that HRC's supported this one - while marriage has become the Holy Grail of the gay rights movement, "beyond marriage" laws can provide parts of the same protections to a greater number of families who need them. They reflect the way kinship patterns have changed since the Eisenhower era. And apparently they can get signed into law by a reactionary president without any fuss.

Not a Step in the Right Direction

But one thing's for certain about this: we're not moving in the right direction.

Progressivism is a limited lens through which to look at policy making, but it's definitely popular in America. The left often gets stuck on the idea that American society, heck, even the world in general, depending on whom you ask, is moving towards an eventual goal where we'll all be equal, free, and provided-for. In that context, pretty much any law that improves people's lives gets labeled as a "step in the right direction," no matter how obvious it is that we're not moving in the right direction.

And when it comes to retirement benefits for the working class, America's definitely not moving in the right direction, and Bush and his ideological colleagues are doing everything they can to move us in the wrong direction.

Which is why I remain unimpressed with this law. Sure, it'll improve people's lives. But it accepts as a given a system that works against the working-class elderly. And without any sort of material commitment to improving their lives, there's no reason to think this will compound with other legislation to eventually reach the goal of safe retirements for all Americans.

One of the biggest instances of culture shock French tourists in the US realize is seeing people in their 70's and 80's working in supermarkets. While they've just started their conservative backlash against the working class with the election of Nicolas Sarkozy two years ago, they still have a great nationalized pension program compared to American workers.

But the French aren't "ahead" of America, or more "advanced" than we are. It's 2008 in both countries, with the same technology available to both societies. They simply have a greater commitment to economic equality than we do, something which we could try to emulate instead of putting hoping our current mentality will eventually produce social justice.

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Alex - Thanks for this thoughtful analysis, and for reminding us that the path to social justice is not linear, and especially is not a matter of reforming an unjust system one step-in-the-same-direction after another ...

I really appreciate this post, Alex. The fact that the new law, like the Pension Protection Act, eliminates marriage as the dividing line for who can benefit from the rollover is definitely a plus in the "beyond marriage" column. I do object to gay rights groups hailing this as a victory for same-sex COUPLES, when it actually removes the "couple" (read romantic or sexual) requirement and equally benefits all relationships. And you are absolutely right that the larger picture of income security for older Americans is totally obscured by hailing this as a gay rights victory. Also, both the PPA and this law support the transmission of private wealth across generations since you can roll it over to your children or grandchildren. I share with you a goal of social and economic justice for all. That will have to wait for another day/year/whenever....

Marla R. Stevens Marla R. Stevens | January 3, 2009 6:13 PM

I second that and commend your lamentation of the loss of DB plans, substituting 401Ks instead, which leave complex investment decisions to people quite unqualified to make them. One CEO, after touting the marvels of such choice, had to admit the folly of it when asked if he would, as a test of the soundness of his assertions about 401Ks, put his own company's financial investment decisions into the hands of the vast bulk of his employees -- even with the "support" his company provides employees -- for just a month. He blanched as he refused to do so. His employees are being asked to be their own financial planners and investment experts at a make-or-break level for the funds they use for their health, their shelter, and their basic sustenance -- for the rest of their lives.

Marla R. Stevens Marla R. Stevens | January 3, 2009 7:03 PM

P.S. The hard data supports the anecdote, too, with only those at the top of the pay scale doing as well or better using 401Ks than DB programs. Most people do exceedingly worse. Why the big push toward them, then? Well someone had to be poised to lose big in the market to shore up the speculators' investment schemes from the dot coms to the mortgage nonsense.