New Rules for the Economy

We are at a historic moment in this country. We are living through an economic crisis that, by some measures, has not been seen in a century. Trillions of dollars in wealth have evaporated, hundreds of thousands of jobs disappeared and New Yorkers face an uncertain economic future.

At the same time, As New Yorkers, we should be full of optimism that the crisis has opened up a once-in-a-generation chance to change the rules of the economy.

It’s time for the people to make the rules. We’ve let corporations set the rules for too long-—and they’ve been helped by politicians, in both major political parties, who put special interests ahead of the interests of Main Street and the middle class.

Our campaign is fighting for an economy for the people, not one favoring abusive corporations who choose a low-road economy: competition based on price which leads to insecurity, rising inequality, poisonous labor relations, no commitment to our communities, environmental damage.

We’re not anti-business-—We’re against business as usual. Our campaign wants to change the world where a corporation decides, with virtually no restraints, what to do with our jobs—-the jobs for which our communities provide the sons and daughters who create the wealth of a corporation. We want a high-road economy: competition that encourages innovation, distinctiveness, and amazing performance, and leads to higher pay for workers, less environmental damage and builds a culture where corporations make a commitment to our families and children.

Our campaign believes that we have a responsibility to care for each other. We believe in freedom, opportunity and prosperity for every person in our country, which is the richest in the world. We believe in a government that stays out of peoples’ bedrooms, makes sure that businesses act ethically and acts every day to make sure that our democracy is not undermined by abusive corporate power.

Increase Social Security Benefits

The idea that Social Security is at risk is false. Social Security is solvent for many years to come and its long-term financial picture can be addressed, as has happened in the past, with relatively modest, long-term solutions. Indeed, even in the financial crisis we have been going through, there has only been a modest increase in the projected size of the 75-year shortfall (from 1.70 percent of payroll to 2.00 percent of payroll).

As Senator, I will propose increasing Social Security benefits by 15 percent for at least the next 20 years to make up for the trillions of dollars in wealth lost by average people in the recent financial and housing collapse. Over the next two decades, Social Security costs are expected to rise from 4 percent to 6 percent of Gross Domestic Product. So, by 2020, with a 15 percent hike, the cost would be $105 billion—-which we will pay for, in part, via the Financial Transactions Tax on Wall Street (which will raise about $140 billion). The choice is clear: shouldn’t we ask Wall Street to give a tiny amount of its profits to make sure that our people live in retirement with dignity and respect?

Pensions For All

What happened to the idea that some day every one of us could reach an age when we could sit back, fish, play a little golf, take up a new hobby, maybe watch our children and grandchildren play or just simply relax and watch the grass grow—-without worrying about whether we had money for food and rent?

We think that that each person in our community should live safely and fulfill a life of opportunity and prosperity at every stage of their lives. But, the U.S. pension system is under attack. Look at what’s happening to people who put money—-their money-—into corporate pensions? The money is disappearing—-corporations and bankruptcy courts are taking away the hard-earned fruits of our labor. That’s not right.

Even where we don’t see outright corporate abuse, the number of firms offering traditional defined benefit pensions is falling rapidly and many of the ones that still exist are badly under-funded. Only half of the people even have the opportunity to contribute to a 401(k) pension at their workplace. Since workers often change jobs frequently, many never vest in pensions at their jobs or they accumulate very little money in their pensions if they do vest.

We want to bring back the promise of a safe retirement with a pretty simple idea called Universal Voluntary Accounts.

Here’s how it would work: The government should create a universal system of universal voluntary accounts (UVA) that everyone can contribute to at their work place through a deduction from their paycheck. Employers would also contribute to these accounts on behalf of their workers-—a minimum of 3 percent of wages. The system will be comparable to the federal employees Thrift Savings Plan, which has extremely low administrative costs.

Right now, your IRA is being drained by Wall Street because of high costs. In a UVA system, your existing 401(k) plans would increase retirement savings by 10-15 percent. The plan will also allow for workers to convert their savings to annuities in retirement—-a life-long stream of income. Since a plan administered for the benefit of the community could issue annuities at very low costs, this would further increase retirement income by approximately 10 percent compared with the existing 401(k) system.

Here’s the biggest difference: our plan would not leave your retirement up to the casino-atmosphere of the stock market, where you have to worry where the stock market will be when you retire. The pension would be based on workers’ contributions, the age when they contributed and the age when they begin to draw their pensions. It would remove market risk for individual workers, since the UVA system could even out payments over up and down markets, taking advantage of the size of a community-wide system. The UVA system could even allow workers to chose to have a guaranteed defined benefit pension—-a set amount you can count on.