Contact: Rachel Wolf, firstname.lastname@example.org
September 26, 2013
The Plot Against Pensions: How Pew and the Arnold Foundation Plan to Undermine America’s Retirement Security
WASHINGTON – The Institute for America’s Future released a new report authored by David Sirota (The Plot Against Pensions: The Pew–Arnold campaign to undermine America’s retirement security – and leave taxpayers with the bill) that examines how former Enron executive John Arnold is partnering with Pew Charitable Trusts’ Public Sector Retirement Project to fund an effort to undermine retirement security and slash public pension benefits.
The report reveals how the Pew-Arnold partnership has distorted the conversation about public pensions and created a movement to convert traditional public pensions into riskier and costlier schemes.
The report exposes how:
- Conservative activists are manufacturing the perception of a public pension crisis in order to both slash modest retiree benefits and preserve expensive corporate subsidies and tax breaks.
- The amount states and cities spend on corporate subsidies and so-called tax expenditures is far more than the pension shortfalls they face. Yet, conservative activists and lawmakers are citing the pension shortfalls and not the subsidies as the cause of budget squeezes. They are then claiming that cutting retiree benefits is the solution rather than simply rolling back the more expensive tax breaks and subsidies.
- The pension “reforms” being pushed by conservative activists would slash retirement income for many pensioners who are not part of the Social Security system. Additionally, the specific reforms they are pushing are often more expensive and risky for taxpayers than existing pension plans.
- The Pew Charitable Trusts and the Laura and John Arnold Foundation—the latter run by conservative political operatives and funded by an Enron billionaire—are working together in states across the country to focus the debate over pensions primarily on slashing retiree benefits rather than on raising public revenues.
- The techniques used by conservative activists to gain public support to privatize the public pensions that public workers have instead of Social Security are, if successful, likely to be used in efforts to privatize Social Security in the future.
“The Arnold Foundation and Pew’s Public Sector Retirement Systems Project have together orchestrated a plot against pensions that creates the perception of a crisis, slashes retiree benefits, protects corporate subsidies and enriches Wall Street,” said report author David Sirota. “Backed by Arnold and Pew, this plot convinces states and cities to plead poverty to justify pension cuts, all while those states and cities spend massive amounts of taxpayer monies on stadiums, wasteful tax expenditures and other corporate subsidies. Those subsidies, in fact, are typically far larger than the public pension shortfalls – yet they are preserved and retiree benefits are cut.
“Ultimately, this immoral bait and switch effectively finances corporate handouts with pensioners hard-earned money – and in the process, changes to pensions often end up enriching the banking industry. This is not pension ‘reform’ – it is yet another stealth effort to force middle-class workers to subsidize the rich.”
“The methodology that Pew has promoted to assess pension liabilities has manufactured a crisis by grossly exaggerating the difficulties these funds face,” said Dean Baker, co-founder of the Center for Economic and Policy Research. “Pew’s warnings about excessive return assumptions would have been far more timely during the 1990s.”
“Here in Kentucky, we saw firsthand the deceptive work that Pew is undertaking in states across the country in order to promote their cash balance pension overhaul policy,” said Kentucky State Representative Jim Wayne. “As a legislator who recently fought this losing battle against Pew, I feel it my duty to warn legislators across the country about the ramifications of letting Pew into their states. Buyer beware.”
“At a time when Americans across the family are struggling to make ends meet in retirement, foundations like Pew ought to be advocating for policies that strengthen retirement security—not partnering with ultra-conservatives to push for policies that threaten to retire a generation of workers into poverty,” said Roger Hickey, co-director of the Institute for America’s Future. “The pension-crippling legislation that Pew and Arnold are pushing in states is terrible news for working families and for anyone who supports smart and fair public policies.”