Retirement Income in Jeopardy

Report Outline
Mounting Pension Problems
Power of Pension Funds
Recommendations for Change
Special Focus

Mounting Pension Problems

Retiree Apprehension Over Budget Cuts

Retired Americans and those nearing retirement age may have awaited President Reagan's Feb. 18 televised address to Congress with an extra measure of apprehension. For they, more than most of the rest of the population, depend on an array of $215 billion worth of federal social programs. And these programs seemed threatened by the budget-cutter's ax. The retirees were assured by the president that their support programs would not be victims of the $41.4 billion in reductions he asked Congress to make in fiscal year 1982, nor in future budget cuts that are expected to reach $125.9 billion in the next three years. He said:

We will continue to fulfill the obligations that spring from our national conscience. Those who through no fault of their own must depend on the rest of us, the poverty stricken, the disabled, the elderly, all those with true need, can rest assured that the social safety net of programs they depend on are exempt from any cuts….

Still, there were cautionary notes in the president's speech. Social Security benefits and other government programs that aid the aged are not set in concrete. They can be cut or eliminated by Congress, according to changing economic and social conditions. Reagan did, in fact, ask for the liquidation of two Social Security benefits: the minimum monthly payment of $122 for all Social Security annuitants; and the survivor's benefit for students from ages of 18 through 21. Elimination of the two benefits is expected to save $1.7 billion in fiscal year 1982.