A TV interview with Goldman Sachs CEO Lloyd Blankfein has heightened the debate on how America will pay for its retirement benefits and other entitlements - although critics are blasting the source for his company's own recent history of accepting government assistance.
Blankfein, in an interview with CBS News' Scott Pelley, suggests that with mounting pressure on Social Security, solutions including a delayed U.S. retirement age and a general clawback of entitlement programs is in order.
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.
PELLEY: 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. … So there will be things that, you know, 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.
PELLEY: Because we can’t afford them going forward?
BLANKFEIN: Because we can’t afford them.
The interview set off a wave of responses on the Web, including Jordan Weissmann of The Atlantic, who notes just a little schadenfeude on the part of the multi-million-dollar-earning CEO ... and a bit of a disconnect on the larger issue of working much longer and providing much more support for the endangered Social Security system.
Instead, Weissmann notes current proposals that suggest that raising payroll taxes just a slight amount - CEOs of major corporations, and Average Joes included - could probably safely extend the viability of the Social Security safety net for a much longer period in the future.
And with general trends suggesting most Americans realize they will probably have to delay their retirement anyway given their limited 401(k) resources and the ongoing disappearance of the DB world, perhaps reducing benefits for high wage earners or changing the cap on taxable income might not be a bad Social Security fix in the meantime.
Weissmann also takes issue with Blankfein's comments on an extended retirement after a short career, suggesting that he may be confusing the relatively limited benefits provided by Social Security with the pension packages provided to some unionized workers.
"I think it's more likely he was just trying to express the idea that Social Security wasn't designed to be a cushy program in its early days," he said. "But there's a difference between offering every American a gold-plated pension and allowing people to finally take a rest at a reasonable age."