Atlanta Mayor Kasim Reed supports cutting pensions for public employees. He’s been vocal about that. But his appearance today on NBC’s “Meet the Press” raises the question: Does he also support slashing Social Security?

He acknowledged that some cuts are inevitable and said he only wanted the Obama administration to let him and other leaders know how those cuts will play out and he’ll do what he needs to do. That sounds like cutting Social Security is fine with him.

Republicans and Tea Party members have criticized the budget as not cutting enough government spending and Reed’s fellow panelists pointed to the hefty tax dollars put into what are traditionally called “entitlements”—Social Security, Medicare, and Medicaid.

Reed didn’t comment on the attempt to cut Social Security specifically, but he also didn’t speak up to disagree. So, does he support cutting pensions and Social Security?

For the most part he stuck with what he knows: Politics. He pointed out that Obama will do well in the 2012 presidential election if unemployment drops to 8 percent, which would, he said show that the president had made the right decisions regarding bailing out the American automobile industry. Bailing out Detroit’s moguls was okay, but meeting the obligations one has to workers making $40,000 a year is not?

The show’s host, David Gregory, pointed out that Reed has “cut the city’s employee pensions in terms of vesting”—Reed pushed the vesting period from 10 years to 15 with support from the police union and others. The union support for the longer vesting period came as a compromise in hopes of protecting the pensions from cuts and also acknowledged that the 10 year period was encouraging attrition.

But Reed made it clear that he’s not done.

“We did what we could legally,” Reed said of the past year’s attempts at slashing the city employees’ retirement funds and added that he will try again this year.

Reed wants to cut pensions. His remarks today make it clear that he is not opposed to cutting Social Security if that’s what Washington wants.

This is not ethical or practical. Pensions require that employees sacrifice part of their paychecks for their retirement, and when they are hired they take a job with certain explicit expectations of how their pension contributions will be treated—to what extent they will be matched and about how much will be paid out upon retirement. The pension agreement is a binding contract between a worker and an employer.

Ironically, what most people may not realize is that the push to slash or even abolish pensions and Social Security may give way to something that puts the taxpayers on the hook for payments that are in no way tied to work, something like “guaranteed minimum income” or some other universal safety net that everyone gets regardless of whether they’ve worked for it.

It’s not too far-fetched a notion. Americans will not allow the elderly to starve to death. We will not stand by while those who have given their lives to work suffer in poverty. With Social Security and pensions under attack from a government so low on ideas for better budgeting that it has to raid the cupboards of millions of Old Mother Hubbards, something will have to be offered as an alternative. What will it be?

Social Security has become a convenient punching bag for those wealthy enough to live off their 401Ks or those who managed to retire before companies began trashing their retirement plans. But whatever replaces it will look a lot like it because Social Security is not the problem. In an American economy that works as it should, new groups of workers pay into the Social Security system so as the economy grows so does the safety net.

We need to focus on slashing the red tape around jobs creation, lightening the burden on small businesses and even, yes, legalizing illegal workers so they can pay into the system, thereby deepening the pockets of Social Security. They are already doing the work, let’s grow up and beyond racist arguments and tax them for it. We could even tax them at a higher rate through a work visa program.

In the meantime, there is no question that Washington needs to decrease our tax burden. As a single mom who has always worked for less than the national median income, it is puzzling to me that I have always had to scrape up thousands of dollars at tax time while wealthier folks actually get money back. I am paying them. There are those who will chime in that my money pays for public services. Well, I’m not on the dole. I don’t get Medicaid, Medicare or anything else, and yet I pay my share. If I do, then why don’t they? SR


  1. If I didn’t know better, I would have garnered the impression that Reed is a Republican from his Meet The Press performance

  2. Here are some thoughts on spending, i.e. Social Security, Medicare, Defense,
    Foreign Aid:
    1) Raise age limit on SS for those 55 and younger. Live longer, pay longer.
    2) Every government employee, at all levels, pays into Social Security. No free rides to retirement. This would be a HUGE long term savings.
    3) Every government employee, at all levels, pays into Medicare.
    4) Stop government 100% healthcare for federal employees, including elected officials, where all pay/buy into same kind of coverage as rest of American workers. This would be HUGE savings long term.
    5) Raise government retirement limits to 15 years, not the 10 now at county/local levels.
    6) Reduce or eliminate foreign aid to all countries across the board equally as a cost cutting measure …. until we have our deficit under control, with a surplus direction.
    7) STOP BLAMING OBAMA. He has kept us from going over the cliff, and it took money to do that. Enough of it! It was the out of control spending by W and years of Republicans for non funded programs, i.e. war, senior drug benefits, tax refunds, no questions asked blank check to Wall Street buddies in 2008, etc.,etc.
    8) Regulate further financial industry practices so taxpayers don’t foot the bill
    next go round.
    9) Tax all income, monies coming into this country.
    10) Eliminate Bush extended tax breaks for the wealthiest permanently.
    11) Increase tax breaks for singles, head of household who are at the highest per captia tax brackets.
    12) Stop payments for welfare recipients who continue to have babies. Irresponsible for taxpayers and for children growing up in poverty.
    13) Stop US involvement in war. The Bush Iraq war was for OIL (originally referred to by Cheney and Rumsfield as Operation Iraqi Liberation …. code for OIL). Haliburton is in Saudi now, tax free income.
    14) Stop Medicare fraud and waste, not cut benefits for seniors.
    15) Stop federal money to churches.
    16) Tax religion. It is in our politics in a big way, against “separation of church and state”, then churches and all religious “non-profits” should pay taxes on their income and investments, just as all US citizens. Religion is BIG BUSINESS, in real estate, stocks/bonds, investment groups, etc. while trying to run our government from the pulpits influencing our elections. Would generate billions of revenue.
    17) Reduce healthcare costs through customized policies based on circumstances, i.e. if over child bearing age why should a working woman pay for maternity benefits? Lower her healthcare premium for not being in that risk category?
    18) Pensions are perks, not rights of passage. If a company offers direct benefit pension plan and lower wages, might be worth working for them. If a company offers contribution to 401K higher vs. no pension, might be worth it to work for them. If no pensions offered, then save 20% of your income in IRAs or other safe savings until retirement.
    19) Get an education. It is available if you want it. Will increase productivity, way to higher wages, thus a cost cutting measure long term.
    20) Tax heavily illegal immigration and green card workers coming to this country AND any company hiring illegals. Generate revenue as US companies benefit in profits from this labor pool.
    Interested in other thoughts……….

    1. Putting municipal employees on Social Security will cost taxpayers more – not less. The reason municipalities were allowed to opt-out of Social Security is they can provide an equal or better retirement benefit for less dollars than paying into Social Security. Employees in municipal pensions pay more into their retirement plans than Social Security and invest those funds collectively to maximize returns. The problem in Atlanta is that the city didn’t make its contributions to the plans during the good years and deprived the funds of those compounded investment returns.

      Getting into Social Security would be much more expensive than a pension plan.

  3. Reed had his tap shoes on this morning just as he does in his hometown. I would not consider Atlanta a stellar run city for representation of big citires in this country.

  4. Did he mention that City employees don’t participate in Social Security? I’ll wager that he didn’t. For City employees, Social Security cuts are meaningless unless they pay on their second jobs.

    Did he mention that the City is supposed to contribute on average 39% of each employee’s salary to the pension plans? Did he mention that an employee can retire after 32 years of service at 80% of the average of his highest three earning years? I’ll wager that he didn’t. City pension plans are a lot more financially rewarding than what’s available in private industry.

    Mayor Reed and the President wouldn’t have the guts to effectively modify Social Security and Medicare because they know they would not be re-elected. The percentage of likely voters on Social Security and Medicare increases every year.

    1. The reason the city is contributing such a high amount now is elected officials in Atlanta failed to make their minimum contributions for decades during periods of high market returns and lost those compounded earnings. The average amount that governments pay into pension plans is around 2-3% of their budgets.

      1. Also BB,

        You mentioned that your wife collects a teacher’s pension – are you opposed to those as well?

        Personally, I think career teachers are sorely underpaid and deserve a dignified retirement.


        1. My wife’s pension is from a pension fund that is fully funded, not $1.5billion in the hole. She contributed 5-6% every year she taught, plus paid Social Security. She made the effort to do both and earned what she gets. For her to get a full 80% pension would require 40 years of service versus 32 years for City employees.

          I am not sympathetic to City employees who don’t pay Social Security (6.2% most years), pay 4-5% into their own pensiuon, and whine about it.

          1. City employees pay 9% toward their pension. So for 3% more, the school system taxpayers provided your wife with a pension AND social security.

            I guess its all about who’s ox is being gored.

          2. And the reason the city pension is underfunded is because the city (taxpayers) didn’t pay their share.

            Conversely, the reason your wife’s pension system is fully funded, is because the school system (taxpayers) did.

            The employee contribution is not optional and our board always achieves above average investment returns.

            Would you like to talk about your ‘underfunded’ social security next?

      2. It is the % of employee salary that is out of whack. Level the playing field with the private sector, have the employee contribute to their retirement as too much of a burden on the taxpayer. If you live and work inside the city, then there could be an incentive offered. Too many of city workers/management live outside the city, drive city vehicles to and from, and don’t reinvest in the well being of their employer, the health of the city. But, most likely because it is too expensive to live here……. all interconnected.

  5. Sophie, you are all over the place, can’t tell if you are R, D, or indepent. Agree with so much you say and then in the next breath disagree with a lot of it. Wow.

    1. Just thoughts Bill. We need $$$$change options across the board, not just partisan. It is the big picture, not status. It is the voter casting their ballot on emotion that is the problem with our government. I can’t identify with either party, especially in Georgia. Both sides are way off course, out of balance and religion has too much power …. non taxable power.

  6. OMG. Kasim Reed supports cuts to Social Security!

    This is the guy that got all the support from Georgia’s Democratic Party! They guy that painted Mary Norwood as a Republican! Mary would never do that to old folks.

    WAY TO GO GEORGIA DEMOCRAT PARTY! No wonder you’re shrinking every day.

  7. @ Jimbo

    1. You have a short memory. City employee contribution percentages have just increased to 9% from roughly half that %.
    2. When my wife was teaching she was paying 5-6% for pension plus 6.2% social security – a lot more than the present City 9% employee contribution and much more than the former 5%. She also had no choice as to whether she had to pay.
    3. The City taxpayers didn’t pay their share because the Mayor and Council didn’t have the guts to do what had to be done. Every time the unions demanded a raise and threatened if they didn’t get it, the Mayor and Council bought them off with a sweetened pension deal and passed the buck on to future Mayors and Councils. Just like our present Federal budget deficit.
    4. As for Social Security, it has been completely unfunded since the mid-1960s when the Congress decided to raid the piggy bank yearly and leave behind an IOU. I have had no choice about contributing. What is there to talk about? I have been saving for 41 years so I don’t have Social Security as my only source of retirement income. If it folds, I’ll be working in my 80s.

    You still haven’t convinced me that a City pension is not a sweeter deal than a private 401k plus Social Security.

    1. BB,

      You’re just wrong on the employee contribution – its never been 5%. It was lowered from 9% to 8% for about 8 years and then raised back. So my previous statement holds, your wife got a pension and Social Security for about 3% more. Social Security is about a 1.5% multiplier, so that’s a darn good deal.

      “Unions demanding raises and threatening if they didn’t get it…” Get real. Threatening what? City workers are legally barred from striking or engaging in any job action, they are not allowed to bargain collectively, have never had a contract, and cannot compel membership or spend dues on political action.

      The reason the pensions were improved is because studies showed that most city workers were going to retire below the poverty line because their salaries, on which their pensions are based, are so low.

      The money that was diverted away from city workers retirements was the taxpayers share – in addition to not paying any of Social Security. It’s very much like what has happened to Social Security.

      A lot of the erroneous assumptions you make seem designed to justify your vilification of city workers.

    2. The underlying cause of the pension, and pay, issue, is Atlanta is a broken business model. It’s a city of 450,000 trying to provide employment, transportation, convention, entertainment and government infrastructure to a metropolitan area of 6-8 million people. There are huge outflows of revenue from the city to the suburban and rural areas of the state and the State house likes it that way.

      Only one-quarter of an Atlanta property tax bill goes to the city, but whenever citizens want tax relief they lay siege to City Council – not Fulton County or the School Board. Their city taxes get lowered – in 7 of the last 10 years – but they loose services, which infuriates them, and employees fall further behind in market pay and pension funding.

      It’s a lovely situation.

      We need to find solutions to Atlanta’s structural underfunding problem instead of scapegoating the city employees.

  8. BB, I have been with the city 10 years and HAVE NEVER paid 4.5% It has always been higher. As for SS I have paid in other jobs, but not even an option here. Would I pay into it…I dont know. I actually take some of my salary and invest it privately. A little safer than SS I think. As for you #3 comment, Ummm you might want to look a little closer. Good ole Shirley got in office and FROZE raises and there hasent been a steady one since. The occasional one but no where near what we were supposed to get. The pension is under funded because the previous mayors, and city council used it as a piggy bank and stole money from it, and refused to fully fund it. That is why the unions sued, got control away from the city and they are under court order to finally pay there share. It seems by your posts not only in this article but others you are anti union, and anti pension. Your call, but dont blame us for the condition the city is in….espically when it is so painfully obvious that it is not our fault.

    1. City employee:
      1. Regardless of what you paid, it was a lot less than my wife paid as a teacher.
      2. Did you invest any of your salary, or will the 80% pension after 32 years be enough for you? From what other City employees stated, they never had enough left to save.
      3. Mayor Franklin didn’t give raises but she did sweeten the pension plan.
      4. I never stated that I am anti-union and anti-pension. I stated that the unions pressured the Mayor and Council numerous times for raises and were put off by sweetened pension plan provisions. I did state and prove that the City pension is a sweeter deal than a similar employee can get in private industry with Social Security and a 401k.

  9. BB….
    Ok so your wife paid 5-6% and I pay 9…..Missing the math on that one. I understand that she paid into SS, that however was not an option with the city.
    As for investing, yeah what little I have left over I do invest. Is it alot….no its not but I do what I can. I haven never made much and at times it has been tough….furloughs, etc but I do what I can.
    Well If you think a “sweeter” pension is a good idea….what are we facing now. 80% of a below par salary is still 80% of not much. I would much rather give back a little on the pension to get the 12-15% pay raise that I have missed all these years.
    You dont have to jump up and down and state something for people to get the idea. What you say Is clear enough. The city council gave us the pension improvements, but like I said what good does it do if they are trying to take them away? As for proving that my pension is better than a 401k and SS Im not seeing it. Your private sector job im sure pays, A LOT more than my public one. So lets just say you make 2x my salary you invest that in a 401 and other options, even with the downturn in the market you should be well ahead of my 80% of 40k. If not you need a better plan. Now add on top of that SS….and yeah I think you are better off than me. After all it looks as If my pension is going down, and my salary has been stagnant for the last 7 or so years.

    1. @ city employee

      1. I guess that I didn’t make myself clear – my wife paid 5-6% (amount varied) into the Teacher’s Retirement System plus 6.2% into Social Security – a total of 11.2-12.2%/year.
      2. Bravo and well done for saving and investing on your own account! Most of the other City employees who’ve commented here said that they couldn’t do it. You and I know that you can.
      3. I understand that 70% of a larger salary would be preferable to 80% of a smaller salary. That’s exactly where the previous Mayors and Councils have failed the taxpayers and employees by sweetening pension provisions instead of giving raises. They have just kicked the can down the road and left the problem for someone else to solve.
      4. My point is not about what I make versus what you make and what I can save versus your pension. My point is that a worker in private industry who contributes to a 401k and Social Security will get less retirement income than the same worker in government ( same pay, same years on the job, etc.) will get from a government pension. The worker in private industry contributes more, year in and year out, and gets less at retirement.
      5. I hope that the City doesn’t stick it to the present employees and retirees as they figure out how to climb out of the $1.5billion pension hole. God forbid that it turns out like the Enron employees who invested their 401k money in Enron stock and lost everything. I would have been facing the same thing myself had I retired before 2008, because my retirement savings took a big hit. I am working longer to replenish the savings, but a city employee doesn’t have that luxury because the system pushes you out the door after so many years, regardless of whether you’re ready or not.

  10. BB, You are comparing apples and oranges to apples…..
    You said that your wife contributed 5-6% to my 8-9%. SS is not part of the equation, for pension purposes. Well at least the way I see it, SS is not an option to us.
    As for my savings, I had to have a room mate, and split costs with someone that is the ONLY way I was able to save some. That and I have done without things.
    Yea the council, and mayor have done this to us, and themselves but what they also did, was UNDERFUND the pension for years!!! APD and AFD had to file a lawsuit to get the pension away from the city, and forced them to fund it. That is why the city is in the spot that it is in. Also they talk about unfunded liability whic is what they are on the hook for if every employee retires tomorrow. What is the likelihood of that?
    As for the private person getting more at the end….Im not so sure about that. If you take the same 8% and invest it over say 30 yrs dont you think you would get a better return than say a 60k salary at the end? Im no investment guru but I could probably manage to do better than what my pension would pay out, If I had the option, and the SS. Dont you agree???? The beauty of the pension is that it is a guarantee…..or so we thought.
    Im thinking the city is going to come along and raise the retirement age, raise the contribution and lower the payout. That of course is going to lead to a lawsuit and cost the city millions. In the end the pension will stay the same and all that time and money will have gone down the toilet. The truly frustrating thing is that it could have all been avoided if the city had just done what it was supposed to do in the beginning.
    If the city had funded the pension, like it should have even with the market doing what it did we would have been ok. Instead they gambled that the markets would pay off and fund it for them…..it didnt and look where we are.

    1. City worker, you keep changing the questions. Let’s try this again.
      1. If my wife had paid 5-6% a year for 30 years into the Teacher’s Retirement System plus paid 6.2% into Social Security for 30 years, she would still have drawn a smaller amount than a City employee making exactly the same salary for the same 30 years. She was paying 11.2-12.2% out of her own pocket, a higher % than any City employee pays. Plus, she couldn’t start drawing Social Security until she was at least 62.
      2. I agree that past (and present) Mayors and Councils underfunded the pensions.
      3. I can assure you that putting 8% of your salary into a 401k for 30 years doesn’t produce anywhere near the retirement income of a City pension. I have run the numbers and know my way around a spreadsheet. But, you don’t need to. Think of it this way: under the City pension plan the City plus employee contribution is supposed to be about 48% a year while the person with a 401k is contributing 8% of his own money plus MAYBE getting an employer contribution of 3%. So the City pension contribution is 48% while the 401k is 11% – the 401k contribution is less than 1/4 of the City. You really think that you can get greater returns with less than 1/4 of the contributions?
      4. I agree that the City should have funded the pensions. That and a buck will get you a cup of coffee at Waffle House. But don’t be too hard on the folks investing the pension money – nobody’s investments came through 2007-2009 without sdome serious loses, mine included.

  11. BB…I think that we are not going to agree on this one. You are counting her pension contribution 6% and her SS contribution 6% for a total of 12%. I am talking about just the pension contribution 9% for the city. We are not allowed to contribute to SS therefore I don’t see how it could be counted. What was the % of her salary that she draws when she retired? 50-80%?
    In your example, say 48% that is a fixed income. Really fixed by the city not giving raises….so in say 30 yrs I would draw 80% of say 70k. Now If I were to contribute 8% of my income to a 401k for 30 years, 10% I believe is the “average” rate of return, prior to the last few years. Multiply contributions plus compounding returns…yeah I think in 30 years I would do better that 80% of 70k. Now throw on top of that SS If I was able to contribute…..I think I would do ok. The reason behind the pension is that money that is supposed to be guaranteed. Kind of a reward for doing the job for so long.
    Im not coming down on the people doing the investing, hell I think they have done a pretty good job. From what I understand the police and fire pension is pretty solid. I am frustrated that the city is going to try and stick it to the workers….yet again. Oh yeah waffle house does have a pretty good cup of coffee.

    1. City worker:
      1. My point is that a teacher contributes more of her paycheck (11-12%) than a City employee (8-9%?) and ends up getting less retirement income than the City employee. The City employee after 32 years gets 80% of the last 3 year’s average salary while the teacher would get 64% of the last 3 year’s annual salary, plus Social Security. The teacher couldn’t draw Social Security before age 62, perhaps 10 years after she retired. Even after age 62, her teacher’s pension plus Social Security would be less than the City pension. So, she paid 33% to 50% more than the City employee and received less for it. The City pension is the sweeter deal.

      2. My wife has a chronic illness and chose to retire after 15 years, so she gets a small pension.

      3.Go back and check with some investment folks and you’ll find that 10%/year average return on a 401k is not realistic. 6% average over the years is optimistic and 4% more realistic. Some years you do better than that and some years you do worse. In the past 24 months my 401k has returned 38%, but it dropped 40% in the previous two years, so my net return over 4 years is -17%.

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