A nation off track leaves its young a grim financial future

April 30, 2006|By OREN RAWLS

According to the latest polls, nearly seven out of 10 Americans think things in our country aren't heading in the right direction. Now, the pollsters never bothered to call me and ask my opinion, but I'd say I have a pretty good idea of when things are on the wrong track.

I'm not yet 30, but already I've got good reason to worry about what will happen when I get older. I earn a decent income, but 15.3 percent of it is taken out for Medicare and Social Security. Medicare faces insolvency in another 14 years, according to the people who run the program, and Social Security is projected to go broke when I'm 64. So, $1 out of every $6.54 I earn goes to pay for benefits that I might very well never see.

Maybe I could take some comfort in knowing that my hard-earned tax dollars are going to my parents and grandparents, who've already paid their dues to society. But one look at my family's situation and it's awfully hard to see how my elders are benefiting.

My mother is several years past the average retirement age, but she's not going to be clocking out of the work force anytime soon. She can't afford to, even though she's a professional and has been masterfully balancing the family checkbook longer than I've been alive.

Irrepressibly maternal, my mother would be the first to remind you of what you haven't got if you haven't got your health. But until she got on Medicare recently, she was the last to go to the doctor's office. It's not that she didn't need the occasional check-up; she just got cancer a couple of months ago. It was the cost.

That's not something I expect those running this country would understand all that well, as I don't imagine they have to worry too much about matters such as making ends meet. Yet there was President Bush this month in the town next door to my mother's, talking up his health savings accounts. The accounts, he says, make medical insurance less expensive and more accessible.

What might not have occurred to him is that the least expensive form of health care is none at all. Sure, not going to the doctor's office unless you really need to cuts down on access to medical care, but, hey, it's a heck of a lot cheaper. Sometime down the road, of course, there'll be a price to pay, but that's down the road.

In the meantime, I wonder, more than someone my age probably should, about how much of the tab will land on my shoulders. My wife and I are getting ready to start a family. It's occurred to us more than once that we may be supporting three generations before our kids even get to high school.

As it is, we occasionally sent checks to my grandfather and his wife until he died last week. A Southern gentleman if there ever was one, he had a proud streak running from the Mason-Dixon all the way down to his Florida retirement community. But he'd been in failing health, and, even with Medicare's new prescription drug benefit, he and his still-ailing widow kept coming up hundreds of dollars short for their medications.

My grandfather got through the Depression, World War II and other, more personal calamities, so perhaps the odds aren't as stacked against my future as I might imagine. But there's plenty of reason to think that my generation is getting the short end of the societal stick.

Who's to say that even if I plan my financial future as prudently as possible, the money will be there when I leave the office for the last time? Or more to the point, who's going to guarantee that my money will be there?

I'm not betting my 401(k) that it'll be the Pension Benefit Guaranty Corp., the federal agency that's supposed to insure the pensions of more than a quarter of the country's workers. Four years ago, the agency had an $8 billion surplus; today, it has a $22.8 billion deficit. Would you feel confident about letting those guys protect your piggy bank?

I wouldn't, and given the news coming out of Washington, I can't imagine who else would. Congress' solution for the cash-strapped PBGC? Both the House and Senate have passed bills that would cut corporate contributions to the pension agency by as much as $160 billion over the next three years.

I'm no economist, but I know enough to figure out that if my bank account is short a couple of bucks, the way to balance it is not to stop making deposits. So until someone in Washington can explain to me why the only way the cash seems to be flowing is out, my two cents (if any of the pollsters care to hear it) says things in our country are heading in anywhere but the right direction.

Oren Rawls is the opinion editor and European bureau chief of The Forward. His e-mail is rawls@forward.com.

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