AARP Eye Center
The Takeaway: Obama's Debt Plan, Anti-Customer Bank Plans and Employers Raiding Retirement Plans
By Elizabeth Nolan Brown, September 19, 2011 08:44 AM
Let's Make a Deal: The Big News today is that President Obama plans to unveil his deficit-reduction plan. While we don't yet know all the specifics, we do know that the plan will cut government spending by more than $3 trillion over the next 10 years. To manage this, Obama is proposing tax increases, war spending decreases, and cuts to programs such as Social Security and Medicare. Even health and pension benefits for retired veterans could be on the table. Whatever particulars Obama lays out, it's only the first move in what's sure to be some long, contentious (and some might say tedious) negotiations on deficit reduction from the joint House-Senate committee. A deal must be struck by December 23, or cuts will automatically be instituted.
Update: AARP statement on the President's debt reduction plan.
"We appreciate that the President has heard the voices of the millions of AARP members and other older Americans who have been urging elected officials in Washington not to include cuts to Social Security in any deficit reduction deal," says AARP Executive Vice President Nancy LeaMond. "As we thoroughly review the President's plan in the coming days, we remain concerned about proposals that could impose arbitrary, harmful cuts to the Medicare program or shift additional costs onto Medicare beneficiaries."
No New Business: We're loving banks more and more, they're loving us less and less. As recession-2.0 wary Americans pump money into checking, savings, and money market accounts, banks are slashing interest rates and imposing more fees on checking accounts. Wells Fargo & Co., for instance, halved its payments on one-year certificates of deposits to 0.1 percent; Citigroup, which paid 2 percent in 2009, dropped its payment to 0.3 percent. "Banks and credit unions are doing everything they can to get rid of the cash except make loans," Mike Moebs, a Lake Bluff, Ill., banking consultant, told the Los Angeles Times.
Retirement Heist: A new book by investigative reporter Ellen E. Schultz suggests that it was greed, not the economy, that led companies to slash employee benefits and raid workers' retirement funds.
About 12 years ago, companies were changing their pension plans. They claimed they were doing it to make the plans more modern. Not a single company acknowledged they were making these changes to reduce benefits and to save money," Schultz says.
We've got an excerpt from the book, Retirement Heist, available here.
Monday Quick Hits: Los Angeles Times opinion writer Michael Hiltzik says Rick Perry is wrong about Social Security ( and here's why) ... Lifeguards going gray: About 10 percent of the lifeguards who work New York's public beaches and parks are over the age of 50 ... An apple or pear a day could keep strokes at bay ... And researchers are developing a Facebook-style social media platform for elderly adults and people with dementia.
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