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At AARP Forum, Hassan Highlights Her Commitment to Protecting Social Security, Unlike Ayotte

MANCHESTER – Yesterday, Governor Maggie Hassan spoke at the AARP New Hampshire U.S. Senate Forum, highlighting her commitment to protecting and strengthening Social Security for years to come and preventing special interests from preying on seniors’ hard earned benefits.

“As Governor, I have always fought to support New Hampshire’s seniors, and in the United States Senate I will always fight to protect Social Security and strengthen the program for years to come,” said Governor Maggie Hassan. “Unfortunately, Senator Kelly Ayotte has stood with her corporate special interest backers in efforts to undermine Social Security and balance the budget on the backs of our seniors. Granite State seniors deserve better, and as Senator I will always fight for them and the benefits they have earned.”

Governor Maggie Hassan has a proven record of supporting seniors in New Hampshire. As Governor, Maggie signed a law that strengthened protections for seniors by making financial exploitation of elderly, disabled or impaired adults a criminal offense and another law requiring the state to develop an educational program on Alzheimer’s disease and provide training to law enforcement on Alzheimer’s. She also signed into law a seniors bill of rights, and required it to be posted in housing establishments for the elderly. And Governor Hassan signed the CARE Act, which improves patient care and supports caregivers who help make it possible for seniors to live independently at home. In 2015 the AARP honored Maggie as a Capitol Caregiver for her efforts.

As Senator, Maggie will stand up to those trying to turn Medicare into a voucher program, and she will fight any attempt to privatize or cut Social Security. She will also work to enhance Social Security by ensuring that caregivers can get credit toward their Social Security benefits when they take time off or reduce working hours to care for family members.

But in Washington, Senator Kelly Ayotte has stood with her special interest backers like the Koch Brothers in working to undermine Social Security. Ayotte has voted against protecting Social Security from privatization and benefit cuts, and has signaled her support to raise the retirement age for Social Security, even saying just weeks ago she was open to it.

“All the spin in the world won’t fool New Hampshire seniors who know Kelly Ayotte’s record of putting their retirement security on the chopping block to appease her corporate special interest backers,” said New Hampshire Democratic Party Press Secretary Melissa Miller. “We need a Senator who will put working families and seniors in New Hampshire first, not the Koch Brothers.”

See below for the facts about Ayotte’s record of siding with special interests to undermine retirement security for New Hampshire seniors:  

  • She stood with the Koch Brothers over New Hampshire seniors by voting for an extreme Republican plan that would have forced deep cuts to Medicare and Social Security. 
  • Ayotte voted against protecting Social Security from privatization and benefit cuts.
  • Ayotte cosponsored a bill opposed by AARP because it would have cut $1.3 trillion from Social Security and $859 billion from Medicare, slashing Social Security benefits by nearly 20% and increasing out of pocket costs for those on Medicare.
  • Ayotte also voted to increase the retirement age for Medicare and has said she’s open to such an increase for Social Security, both of which amount to a benefit cut. 
  • Ayotte sided with the Koch Brothers and voted for a plan to voucherize Medicare, a plan that the AARP has said would “increase costs for beneficiaries while removing Medicare’s promise of secure health coverage—a guarantee that future seniors have contributed to through a lifetime of hard work.” 

The Heritage Foundation Takes Aim At Federal Workers

Federal Workers beware. Republicans and the Heritage Foundation are coming to steal your pay and slash your benefits.

heritage-foundation-logoThe Heritage Foundation, a well known right-wing think tank started by the Koch brothers, released a new report that directly targets federal workers in the ongoing race to the bottom.

The majority of the savings would come from eliminating any defined contribution plan or pension, as part of a workers retirement package and forcing workers into the government’s defined contribution plan, a 401K called the Thrift Savings Plan (TSP).

From reporting by Government Executive online:

“New hires and workers with less than five years of experience should be shifted to a more generous defined contribution system exclusively — with a maximum government match of 8 percent of employees’ salaries into their Thrift Savings Plan accounts — while employees already retired, separated or with 25 years experience should be grandfathered into the current system, the think tank said.

Those with between five and 25 years of federal service would be given three different options enabling them to either keep the same basic structure while contributing more toward their pensions, or to freeze or stop their defined benefit in favor of a more generous TSP contribution.”

Their plan would steal a workers pension and in trade give them the option to add an additional 3% in contributions to their TSP.

Working people across the country are already struggling to pay their bills as wages have stagnated but the Heritage Foundation wants workers to fund their own retirements by taking more out of their paychecks.

The private sector shifted to 401K retirements over the last two decades as a way to reduce their operating costs and force the employee to plan and fund their own retirement. The loss of employer-funded pensions is also why many seniors are forced to work well past retirement age and rely more on Social Security to pay their bills.

The Heritage Foundation also suggests that lawmakers make it easier to fire workers by reducing the “burden of proof necessary to fire” workers and expanding the probationary period for workers three fold.

On top of that the Heritage Foundation want Congress to cut federal workers vacation time (Annual Leave) and Sick Leave to replace it with a “paid time off” system. This means if a worker gets sick they would not longer have a bank of Sick Leave to draw from but would have to draw from their total PTO time. This is the same program that has screwed private sector workers out of their paid sick leave.

The report does not indicate whether or not a worker would be allowed to carry over any unused PTO like they can with Annual and Sick leave now.

Lastly the Heritage suggested that Congress should strip away all retirement health benefits from workers yet to be hired.

Right-wing think tanks like the Heritage Foundation like to tell everyone that federal workers are overpaid and have outrageous benefit packages but many others argue that is not the case.

“Federal employees remain significantly underpaid compared to their private sector counterparts, according to a review by a group advising the president on federal wages, with feds’ pay lagging 35 percent behind non-federal workers performing similar jobs,” wrote Government Executive in a 2015 article.

Jessica Klement, legislative director of the National Active and Retired Federal Employees Association told GovExec that, “federal pay lags behind industry in many sectors and large companies often offer benefits the government does not.”

“If anything, the federal government should start to emulate those practices, not move further away from attracting top talent to serve our nation,” Klement added.

David Cox, president of the American Federation of Government Employees, called the report a “vicious” attack on the federal workforce.

“It is disgusting to advocate for cutting the pay for the people who care for our veterans, patrol our borders, and inspect our food, while showering the wealthy with billions in tax cuts,” Cox said.

Private sector workers are already feeling the downward pressure of the ongoing race to the bottom. They have already begun to lose their healthcare benefits, the vacation time, and their pay. Now wealthy business elites, with the help of their “think tank” the Heritage Foundation, have turned their sights on federal workers.

We need to stop letting these wealthy business executives and greedy politicians pit worker against worker. The result will leave working people suffering while they reap all the benefits of our hard work.

Clinton-Kaine is an Excellent Fit for Retirees

Ticket is Ultimate Antidote to Worries that Trump-Pence would cut Social Security, Medicare

Robert Roach, Jr., President of the Alliance for Retired Americans, released the following statement regarding Hillary Clinton’s selection of Virginia Senator Tim Kaine as her Vice Presidential nominee:
Alliance For Retired Americans

“Senator Tim Kaine is a superb choice to be Vice President. The Alliance for Retired Americans was already energized about a Hillary Clinton presidency, and Senator Kaine is the icing on the cake. His 93% lifetime score from the Alliance for his pro-retiree votes is proof that he is the right person for the job.

“Secretary Clinton has been a champion for retirees throughout her distinguished career, and Senator Kaine has been throughout his. As a Governor and as a Senator, he has always had retirees’ best interests in mind. He has stated plainly that ‘we shouldn’t embrace radical reforms like the Ryan Plan or the privatization of Social Security,’ and that is music to our ears. Senator Kaine clearly opposes efforts to cut, privatize or shift Medicare costs to retirees.

“If you go down the list of what retirees want the most, Tim Kaine checks all the boxes. He has pledged to protect Social Security. Like Secretary Clinton, he would rein in prescription drug costs by allowing the Medicare program to negotiate with pharmaceutical companies for better prices, just as the Department of Veterans Affairs does.

“His life’s work exemplifies the Alliance’s mission to enhance the quality of life for all Americans. He will protect our traditional pension plans from attack.

“On the other hand, Donald Trump’s choice of Governor Mike Pence as his running mate locked in place a team that endangers the things that retirees care about the most: the protection and expansion of their earned Social Security and Medicare benefits. The contrast could not be starker. We are confident that the Clinton-Kaine team will give us the retirement security we need.

“The Alliance’s 4.4 million members and 1600 chapters will do all they can before Election Day to educate seniors on the differences between the Trump-Pence plans for seniors and the Clinton-Kaine plans. We look forward to working with a Clinton-Kaine Administration to expand our earned Social Security benefits.”

Progressives Rejoice As Obama Announces Support For Expanding Social Security

(Official White House Photo by Pete Souza)

(Official White House File Photo by Pete Souza)

Progressives are celebrating a huge win this week as President Obama announced his support for expanding Social Security as part of a larger economic agenda.

 

“To me, if we raise the minimum wage; if we make it easier, not harder, for people to unionize; if we negotiate trade deals that raise labor standards and environmental standards in other countries, instead of letting them sell here and we can’t sell there; if we make sure that we’re rebuilding our roads and our bridges and our infrastructure to put a bunch of folks in hardhats back to work; if we make Social Security stronger rather than cutting it — if we do those things, then we are going to see wages go up, labor markets tighten, and we will relieve a lot of the stress that people feel,” said President Obama at a town hall discussion in Elkhart, Indiana on June 2nd.

This is a complete change in direction for Obama as it was only a few years ago that he was willing to make cuts to Social Security as part of his “Grand Bargain” with Republicans.

“Progressives led, they people spoke out, and the politicians are now embracing change we can believe in: Expanding Social Security benefits — never cutting them,” said Adam Green & Stephanie Taylor, Co-Founders of the Progressive Change Campaign Committee. “This will be a defining issue in the 2016 election. Hillary Clinton, Bernie Sanders, and congressional candidates across the nation are for expanding benefits to keep up with the rising costs faced by our grandparents and veterans. Donald Trump and Republicans oppose increased benefits, and many support cuts.”

“I applaud President Obama for joining the growing movement in the Democratic Party to expand Social Security — for today’s seniors, workers, persons with severe disabilities, and for generations to come,” said Eric Kingson, Co-Founder of Social Security Works. “With two-thirds of today’s working persons, especially those in their late 40s and 50s, facing a personal retirement income crisis, yes, it’s time to expand benefits. With the Social Security benefits for today’s seniors averaging just $14,000, today’s older Americans need benefit increases, and they need fairer cost-of-living adjustments. With the United States being one of only three nations that do not provide paid maternity benefits at birth or adoption, it’s long past time to add up to 12 weeks paid family and sick leave to our Social Security.”

“The Alliance for Retired Americans welcomes President Obama’s statement in favor of expanding earned Social Security benefits,” said Richard Fiesta, Executive Director of the Alliance for Retired Americans. “The Alliance advocated the expansion of Social Security benefits for years and we are pleased that the President agrees with us.”

“Forty percent of Americans over the age of 50 say that Social Security will be their primary source of retirement income, and the current level of benefits is not keeping pace. It’s time for Congress to pass one of the many bills that has already been introduced to make a more secure retirement for current and future retirees,” added Fiesta.

Progressives like Senator Elizabeth Warren have tirelessly been taking the floor of the Senate to talk about how we need to do more to help our nation’s seniors.

“After a lifetime of work, people deserve to retire in dignity. Two-thirds of seniors rely on Social Security for the majority of their income, and for 15 million seniors — 15 MILLION — Social Security is the only thing standing between them and poverty,” said Senator Elizabeth Warren (D-MA). “I’m proud that President Obama spoke out Wednesday about protecting and expanding Social Security for millions of people who are struggling to get by.”

“For me, this is about whose side you stand on. We have a growing retirement crisis in this country. Democrats recognize that. The President supports expanding Social Security. Nearly every Senate Democrat voted for my budget amendment in support of expanding Social Security. Both Democratic Presidential candidates support expanding Social Security. And the vast majority of Americans support expanding Social Security. Republicans may still be living in the Stone Age of trying to cut benefits, but on Social Security, the American people stand with President Obama and the Democrats to take on the retirement crisis,” added Warren.

As Sen. Warren alluded to, the battle over Social Security is a defining issue in the Presidential election.

In typical Donald Trump fashion, Trump says he is going to save Social Security, and the millions of seniors who rely on it, by not doing anything.

“I will do everything within my power not to touch Social Security, to leave it the way it is,” Trump said at a campaign event in Miami, Florida (3-10-16).

Trump also claims that Social Security is full of fraud, waste and abuse.

“Waste, fraud and abuse is massive in Social Security and Medicaid,” Trump told MSNBC’s Morning Joe. In the same interview Trump attacked Secretary Clinton and Senator Sanders for wanting to increase Social Security.

The Democratic candidates strongly support expanding Social Security and the Presidents new initiative.

Secretary Clinton tweeted out her support for expanding Social Security saying, “We can never let Republicans cut or privatize Social Security — we should protect and expand it. Thanks, @POTUS.”

 

Before campaigning for President, Senator Bernie Sanders was one of the loudest voices in the fight to expand Social Security.

“Social Security is the most successful government program in our nation’s history. Before it was signed into law, nearly half of senior citizens lived in poverty,” said Senator Bernie Sanders. “Today, the elderly poverty rate is 10 percent. Although still much too high, that’s a dramatic improvement.”

“I applaud President Obama for making it clear that it is time to expand Social Security benefits. Millions of seniors, disabled veterans and people with disabilities are falling further and further behind on $10,000 or $11,000 a year Social Security,” added Sanders.

Senators Warren and Sanders, along with Rep Keith Ellison (MN-5) and Rep Raul Grijalva (AZ-3), the Co-Chairs of the Congressional Progressive Caucus, have been asking Congress to “scrap the cap” on Social Security.

“We thank President Obama for speaking up on behalf of seniors and people with disabilities by calling for an expansion of Social Security benefits,” said Rep Keith Ellison and Rep Raul Grijalva. “So many Americans rely on these vital, earned benefits that they have secured through a lifetime of hard work. Still, too many seniors struggle to make ends meet. Expanding benefits and scrapping the payroll tax cap, which prevents the wealthy from paying their fair share, is the responsible way to ensure full Social Security solvency in the long-term while protecting today’s seniors.”

“We applaud the president for reaffirming the importance of Social Security, and we believe his statement shows just how important the progressive movement is in shaping the policies that will drive our country forward,” added Ellison and Grijalva.

It has become painfully obvious to many people that Social Security benefits have not kept up with the needs of seniors. New Hampshire Executive Councilor, and Gubernatorial candidate, Colin Van Ostern, explains how critical Social Security is to New Hampshire seniors.

“I applaud President Obama in his call to expand Social Security for hardworking Americans,” said Executive Councilor Colin Van Ostern. “Here in New Hampshire one in five residents collect Social Security and without this critical program, nearly half of those individuals 65 years or older would have incomes below the poverty level. After years of too many calling to cut Social Security, this is a welcomed direction. Issues like this, and access to debt-free college are the path to a stronger future where everyone has a chance to succeed, not just those at the top.”

Expanding Social Security is a direct infusion to our local economies as seniors spend the majority of their Social Security check in their communities. Even though Social Security was designed to provide assistance to seniors as they retire, many now fully depend on Social Security as their sole source of income.

As part of expanding Social Security we should continue to push for higher payouts to seniors and to eliminate the payroll tax cap. We can add additional strength to the Social Security trust fund by increasing the minimum wage. By raising the minimum wage, workers would earn more in their paycheck and pay more in to the Social Security trust fund. Ultimately raising the minimum wage would provide higher payouts to workers 30-40 years from now when they retire as Social Security payouts are based on quarterly income rates.

Expanding Social Security is the only way to ensure that more seniors do not slip into poverty and can retire with the dignity and respect they deserve after a lifetime of hard work.

Millennials Identify Student Debt, Retirement Savings as Barriers to Entrepreneurship

blue bottle cafe (FLIKR Matt Biddulph)

blue bottle cafe (FLIKR Matt Biddulph)

Majority of millennials currently own or would like to own a business someday; identify student loan payments and lack of an employer-sponsored retirement plan as barriers to launching or growing a business

Washington, DC—A scientific opinion poll released today shows the majority of millennials (ages 18-34) who own a business or would like to start one at some point say student debt and lack of a retirement savings plan are barriers to entrepreneurship.

The poll, conducted Nov. 18-25, 2015, by North Star Opinion Research on behalf of Young Invincibles and Small Business Majority, found that the majority of millennials (51 percent) either own a business or organization, are planning to start a business, or would like to but do not currently have plans to do so.

When it comes to starting a business, millennials identify student debt and lack of an employer-sponsored retirement plan as financial barriers to entrepreneurship. Nearly half (48 percent) of millennials paying off student debt who currently own or have plans to own a business say their student loan payments have impacted their ability to start a business. And nearly 4 in 10 (38 percent) millennials who are interested in opening a business but have no current plans to do so say their student loan payments affect their ability to start a business.

“Right now, I cover upfront necessities for my business, like insurance and marketing materials, out of my own pocket,” said Amanda Golden, co-owner of Designing Local in Columbus, Ohio. “My loans are currently deferred, but as soon as they’re back on the table, using my own money to cover these costs will be out of the question. Student loans are really a burden that restrain my ability to run my own business. Millennials deserve a fighting chance to start small businesses, but student loans are holding us back.” 

Additionally, of those who are still paying off student loans, 43 percent of those who own or have current plans to own a business, and 38 percent who would like to own a business but have no current business plans, say their student debt affects their ability to invest in an organization or hire new employees.

What’s more, three-quarters (75 percent) of millennials who own, plan to own, or would like to own a business say the lack of an employer-sponsored retirement plan is a barrier to entrepreneurship.

“Millennials show exciting levels of interest in entrepreneurship, yet youth entrepreneurship remains comparatively low,” said Rory O’Sullivan, Deputy Director of Young Invincibles. “This poll makes clear that millennials see student debt as a barrier as they explore a pathway to building their own businesses.”

“Entrepreneurship represents the pathway to success for many millennials, but they face significant hurdles to launching and growing their businesses,” said Conan Knoll, Vice President, Entrepreneurship, for Small Business Majority. “As this poll shows, student debt and lack of a retirement savings plan are a real problem for millennial entrepreneurs. Considering the majority of millennials are or would like to become entrepreneurs, it’s important to address these issues that are holding young Americans back from launching their businesses and helping our economy thrive.”

For the full poll report, please visit: http://www.smallbusinessmajority.org/small-business-research/entrepreneurship/millennials

Workers In Right To Work States Are Less Likely To Have Access To Retirement Plans

Pew Analysis Shows Access to Workplace Retirement Plans
Varies Widely Across States

Big differences among industries, incomes, ages, education, race and ethnicities

Wide differences in access to and participation in employer-based retirement plans exist across states, with variations by employer size and industry type as well as by workers’ income, age, education, race and ethnicity, according to a report released today by The Pew Charitable Trusts.

The report, Who’s In, Who’s Out: A Look at Access to Employer-Based Retirement Plans and Participation in the States, examines the rates of access to and participation in plans in all 50 states and assesses the challenges facing workers and employers in ensuring that Americans have sufficient resources to pay for their retirements.

Access and participation is higher in the Midwest, New England, and parts of the Pacific Northwest—and lower in the South and West. The report also finds that among Hispanic workers, access to a plan is around 25 percentage points below that for white non-Hispanic workers. Black and Asian workers also report lower rates of access than white workers.     

“Access to workplace retirement plans varies widely across the states,” said John Scott, director of Pew’s retirement savings project. “Recognizing the savings challenge faced by so many Americans, half of the states are looking at their own solutions.” 

There is a correlation between traditionally strong union states and access to retirement plans.  Workers in Right To Work (for less) states generally have much less access to retirement plans or pensions.

Below is an chart from the report that shows the percentage of workers who has access to some type of retirement plan.

Screen Shot 2016-01-13 at 11.45.19 AMBelow is the current map of Pro-Labor / Right To Work states.  Notice that the overwhelming majority of Right To Work states have drastically less access to retirement plans. (Note: Wisconsin became a RTW state in March of 2015, Michigan in March of 2013, and Indiana in February of 2012.)

righttowork_uschart2015

Overall, Pew’s analysis, based on a pooled version of the Census Bureau’s Current Population Survey (CPS), found that 58 percent of private sector workers have access to a plan, while 49 percent participate in one. Pew also found that more than 30 million full-time, full-year, private sector workers ages 18 to 64 lack access to an employer-based retirement plan, whether a traditional pension or a defined contribution plan such as a 401(k).

The report notes the numerous efforts at the state and federal levels to increase retirement savings. Illinois, for instance, adopted the Secure Choice Savings Program in 2015, which will start enrolling certain private sector workers in new payroll-deduction retirement accounts by 2017. In another example, the state of Washington created a marketplace in which small employers and the self-employed can shop for retirement plans. In addition, the federal government has rolled out the “myRA,” a new national savings program that is geared toward low-income savers. 

“Workplace retirement savings plans can be a critical piece of the retirement security puzzle,” said Scott. “But for millions of Americans, this piece is missing.”

The collective bargaining process has long been the key to ensuring a fair wage and access to retirement. As union membership declines we are continuing to see a reduction in our wages and access to benefits including retirement plans.  


More detailed information, including state-by-state breakdowns, is available in the report’s online interactive data visualization at www.pewtrusts.org/retirementaccess. 

Click here to download the full report.

Workers In Right To Work States Are Less Likely To Have Access To Retirement Plans

Pew Analysis Shows Access to Workplace Retirement Plans
Varies Widely Across States

Big differences among industries, incomes, ages, education, race and ethnicities

Wide differences in access to and participation in employer-based retirement plans exist across states, with variations by employer size and industry type as well as by workers’ income, age, education, race and ethnicity, according to a report released today by The Pew Charitable Trusts.

The report, Who’s In, Who’s Out: A Look at Access to Employer-Based Retirement Plans and Participation in the States, examines the rates of access to and participation in plans in all 50 states and assesses the challenges facing workers and employers in ensuring that Americans have sufficient resources to pay for their retirements.

Access and participation is higher in the Midwest, New England, and parts of the Pacific Northwest—and lower in the South and West. The report also finds that among Hispanic workers, access to a plan is around 25 percentage points below that for white non-Hispanic workers. Black and Asian workers also report lower rates of access than white workers.     

“Access to workplace retirement plans varies widely across the states,” said John Scott, director of Pew’s retirement savings project. “Recognizing the savings challenge faced by so many Americans, half of the states are looking at their own solutions.” 

There is a correlation between traditionally strong union states and access to retirement plans.  Workers in Right To Work (for less) states generally have much less access to retirement plans or pensions.

Below is an chart from the report that shows the percentage of workers who has access to some type of retirement plan.

Screen Shot 2016-01-13 at 11.45.19 AMBelow is the current map of Pro-Labor / Right To Work states.  Notice that the overwhelming majority of Right To Work states have drastically less access to retirement plans. (Note: Wisconsin became a RTW state in March of 2015, Michigan in March of 2013, and Indiana in February of 2012.)

righttowork_uschart2015

Overall, Pew’s analysis, based on a pooled version of the Census Bureau’s Current Population Survey (CPS), found that 58 percent of private sector workers have access to a plan, while 49 percent participate in one. Pew also found that more than 30 million full-time, full-year, private sector workers ages 18 to 64 lack access to an employer-based retirement plan, whether a traditional pension or a defined contribution plan such as a 401(k).

The report notes the numerous efforts at the state and federal levels to increase retirement savings. Illinois, for instance, adopted the Secure Choice Savings Program in 2015, which will start enrolling certain private sector workers in new payroll-deduction retirement accounts by 2017. In another example, the state of Washington created a marketplace in which small employers and the self-employed can shop for retirement plans. In addition, the federal government has rolled out the “myRA,” a new national savings program that is geared toward low-income savers. 

“Workplace retirement savings plans can be a critical piece of the retirement security puzzle,” said Scott. “But for millions of Americans, this piece is missing.”

The collective bargaining process has long been the key to ensuring a fair wage and access to retirement. As union membership declines we are continuing to see a reduction in our wages and access to benefits including retirement plans.  


More detailed information, including state-by-state breakdowns, is available in the report’s online interactive data visualization at www.pewtrusts.org/retirementaccess. 

Click here to download the full report.

State of the Union Highlights Importance of America’s Entrepreneurial Spirit

Statement by John Arensmeyer, Founder & CEO of Small Business Majority,
on President Obama’s final State of the Union address

We’re glad the president highlighted the importance of entrepreneurship and innovation to a thriving private sector in his final State of the Union address tonight, and we agree that small businesses need to have their voices heard in our growing economy.

As noted in his speech, our economy is truly on a path to recovery, with more than 14 million new jobs and our unemployment rate reduced by half. We agree that creating smart policies that support working families and the middle class—small businesses’ primary customer base—is the most common sense way to ensure our economy continues down this pathway to prosperity.

In order to truly ensure small businesses and our economy thrive, we need policies like those discussed tonight on closing corporate tax loopholes, expanding retirement savings, mobile benefits and paid leave programs, and supporting an innovative economy. This will bolster our nation’s entrepreneurs and their middle class customer base. This includes:

  • Closing corporate tax loopholes that put small businesses at a disadvantage, and cutting the top corporate tax rates. Small Business Majority’s opinion polling found 75 percent of entrepreneurs believe their small business is harmed when big corporations use loopholes to avoid taxes, and 90 percent believe big corporations use loopholes to avoid taxes that small businesses have to pay.
  • Supporting the growing freelance economy and identifying and fixing tax issues unique to freelancers. A healthy freelance ecosystem can provide an innovative and singular pathway for women, minorities, youth, veterans, disabled people and immigrants to enter the mainstream American economy and build income and independence.
  • Providing access to affordable health insurance for small businesses by upholding and implementing the healthcare law in full. The law creates more avenues for small business owners and the self-employed to secure affordable coverage and reduce costs, which encourages entrepreneurship and small business growth.
  • Moving forward with policies that help small businesses provide paid leave to their employees and raising the minimum wage. These changes can improve employee productivity, reduce turnover and increase spending at small businesses to strengthen our economy overall.
  • Supporting easy-to-implement mechanisms for entrepreneurs and small business employees to access retirement benefits, such as the myRA program.
  • Implementing the president’s plan to make two years of community college and technical school free to responsible students, which would help address our nation’s crippling youth unemployment, and small business owners’ struggle to find qualified workers.

These policies can play a valuable role in promoting an environment where small business can grow, but Washington needs to act on them. It’s vital that policymakers make it a priority to level the playing field for small businesses and break down barriers to innovation and entrepreneurship through smart economic policies. By taking action on these issues and more, we can help small businesses thrive and strengthen our economy.


About Small Business Majority

Small Business Majority was founded and is run by small business owners to focus on solving the biggest problems facing small businesses today. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong economy. We regularly engage our network of 45,000 small business owners and more than 2,000 business organizations, along with a formal strategic partnership program of more than 125 business organizations, enabling us to reach more than 500,000 entrepreneurs. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers, including access to capital, taxes, healthcare, retirement, entrepreneurship and workforce development. 

NH Politicians Continue Assault On State Retirees’ Health Benefits

Senator Gerald Little and Representative Ken Weyler
Lead Crusade against State Retirees’ Health Benefits

Earlier today, the NH Fiscal Committee voted to increase the monthly cost share (premium) of retirees who are under age 65. The amount is a 5% increase, which, when announced, caused an audible collective gasp from a room packed with State retirees.  These are the people who have served the State for decades and had planned their lives and retirement according to promises that had been made at the time of employment and are being broken today by state politicians.

The increase moves the monthly cost from 12.5% to 17.5% of the premium, which currently means retirees under age 65 will be paying an additional $46 per individual covered each month.

“This vote is a continuation of breaking promises that were made to people who spent their careers serving this state,” said Rich Gulla, president of SEA/SEIU Local 1984. “Today, a handful of politicians decided the fate of over 3,000 devoted, hard-working former employees and their dependents.  The committee kept talking about no other alternatives. There were plenty of alternative ways to fill the deficit in the retirees’ health benefit plan. They just took the easy way out today – on the backs of retirees.”

Committee members repeatedly attempted a blame game. They tried to blame the Governor, they tried to blame increasing medical costs; they tried to blame everything and everyone other than themselves. However, after all the grandstanding, they were the ones who voted for today’s state retiree’s health plan changes. They could have found another way to plug the budget hole including opening up the State budget and finding the dollars someplace else.

It was apparent to attendees that the outcome of the meeting was pre-determined prior to its convening. “They knew full well how they were going to vote, even before today’s meeting began. They had already made up their minds to put the screws to the retirees who are under age 65,” said Gulla.

Last month, the committee voted to increase the co-payment for prescriptions for all retirees. “In combination, these increases are going to present a significant hardship for our retirees. The average pension for a NH State retiree is about $13,000/year.  Our retirees will literally be deciding between paying their heating and grocery bills or paying for medical care. It just sickens me,” said Gulla.

“The only way to stop this assault on our retirees is to vote out those Representatives and Senators who voted for this atrocity today,” said Gulla.  Senator Little made the motion to accept today’s plan and Representative Weyler seconded the motion.

It is also important to know that Senators Lou D’Allesandro and Andy Sanborn and Representatives Daniel Eaton and Cindy Rosenwald voted against the increases and in favor and respect of our state retirees. “For that, we thank them,” said Gulla.  The remaining Fiscal Committee members voted against the retired workers.  “Our members will not forget this; you can be sure they will remember exactly who was with them and against them next fall as they cast their ballots.”

Buying (and Selling) the Future on Wall Street

Verizon as a case study of why our economy doesn’t work, part six

The “ah-ha!” moment came during a conversation with a friend. What we realized: the way we usually talk about the stock market doesn’t match the reality of our modern economy. Things we assume about stock ownership often aren’t really true.

NYSE_09_26_1963_US_News_World_Report

New York Stock Exchange, 1963 (Photo by US News and World Report via Library of Congress)

Start with the basics: what is a share of stock? Most of us think “Investors give a business money and get back shares of stock that give them a fractional ownership of the company.”

But try applying that concept to Verizon, and it doesn’t fit. Verizon stockholders buy and sell shares on the open market – and none of that money goes back to the corporation. The money that investors pay when they buy stock… goes to the investors who sold the stock.

So buying stock isn’t “an investment in the company”… it’s an investment in the stock itself. If you later sell that stock for more than you paid for it, that profit is what’s known as a “capital gain.” If you sell it for less than you paid for it, that’s a “capital loss.”

Stock ownership does give shareholders a “fractional ownership of the company.” But what does that mean? There are more than 4 billion shares of Verizon stock outstanding.  If you own one of those shares, you don’t have rights to any particular network router or mile of transmission line.  Instead, you own slightly less than one-four-billionth of the corporation’s “stockholder’s equity.”  That means if the corporation were to be liquidated tomorrow, you – along with all the other stockholders – would share whatever remained after the corporation’s assets were sold and its other debts were paid.

And that’s probably when, if you were a stockholder, you would start remembering the $49 billion in long-term debt that Verizon acquired in 2013.

And that’s probably when you’d realize that Verizon’s corporate balance sheet shows less than $12.3 billion in “total stockholder equity.” And there are more than 4 billion shares of stock outstanding.

Which means each share of stock represents less than $3 in stockholder equity.

VZ stock chart

Verizon Share Price

Verizon has been trading above $40 a share since… April Fool’s Day 2012. (Back when there were less than 3 billion shares outstanding and the balance sheet showed stockholder’s equity of about $11.76 per share.)

That’s a huge difference between the per-share value of stockholder equity and the per-share price stockholders have been paying… for years now.

So… what else are stockholders buying? (in addition to that minuscule percentage of a relatively small amount of stockholder equity)

Each share also confers the right to receive a dividend, when and if the corporation issues dividends.  And – no surprise – Verizon has been issuing steadily-increasing dividends for more than a decade.  At this point, it’s issuing dividends that total more than $2.20 a year.  With shares trading between $40 and $45, that means stock purchasers can expect to make back – in dividends – about 5% a year on their investment. Which is way more than the rest of us can get in bank interest right now, if we put money into a savings account.

But although those dividends represent a whopping big “return on investment” – there’s still the risk that you could lose money on the stock itself.  Think about it: if you bought a share of Verizon stock last October, you paid about $49 a share. Since then, you’ve received about $2.20 in dividends. But the price of each share of stock has dropped to about $44. So even though you’ve received 5% in dividends… if you sold the stock now, you would still have “lost” about $2.80 per share.

So corporate executives pay a whole lot of attention to share prices.

VZ_Exec_Comp_Program_from_ProxyFor two reasons. First, because executives’ compensation is largely “pay for performance.” For Verizon executives, 90% of compensation is “incentive-based pay.” And what’s the objective? “Align executives’ and shareholders’ interests.”

Second reason: because most corporate executives own a lot of stock in their company.

VERIZON SHARES OWNED by executivesAs of this past February, when stock incentives were awarded, Verizon’s top 10 executives reported owning a total of more than 645,000 shares of corporate stock – worth, at the time, $49.31 per share… or, more than $31.8 million.

But Verizon stock is now trading at about $44 per share. That means those same executives’ shares are now worth only about $28.4 million.

So is it really a surprise that corporations spend trillions of dollars buying back their own stock, to bump up share prices?  Is it really a surprise that corporations borrow money to pay dividends and fund buybacks?

I don’t see anything here that provides an incentive for corporate executives to grow a company long-term.  Nothing that provides an incentive to pay employees a fair wage.  Nothing that provides any incentive to “create jobs” (no matter how low the tax rate goes).

The only incentives are: to keep stock prices high and to pay dividends. (And an incentive for corporate executives to take as much money as they can, however they can, while it’s still available.)

And so for the rest of us, the economy doesn’t work.

— — — — —

retirement eggWondering why you should find time to care about this, with everything else that’s going on right now?

Because of that huge difference between the per-share value of shareholder’s equity and the actual price per share.

And what happens during recessions.

And the fact that almost everybody’s retirement money is – in one way or another – invested in the stock market.

Here in the Granite State, the NH Retirement System lost 25% of its value in the last recession.

In June 2007, before the Wall Street meltdown, the NHRS had $5.9 billion in investments, including
•  $29.7 million of stock in Citigroup, Inc.
•  $23.5 million of stock in American International Group, Inc. (AIG)
•  $14.0 million of bonds issued by Federal Home Loan Mortgage Corp. (Freddie Mac)
•  $13 million of bonds issued by Federal National Mortgage Association (Fannie Mae)

Two years later, when the recession was in full force,
•  Citigroup stock had plunged to only about 6% of its former value
•  AIG stock was worth only about a penny on the dollar and
•  Freddie Mac and Fannie Mae had both been placed into federal conservatorship

That’s what happens to stock values, during recessions.

Remember hearing about the Detroit bankruptcy? Which supposedly was triggered by unsustainable public employee pension costs? The Detroit pension systems were fully funded, as of June 2008. Then the recession hit.

All those defined-contribution 401(k)s? Across the country, families lost an estimated $2 trillion (with a T) of their retirement savings when stock values plummeted during the last recession.

Artificially-high stock prices hurt almost everybody, in the long run.

— — — — —

Yes, there’s more.

Smashed Piggy Bank RetirementVerizon’s balance sheet includes $24.6 billion of “goodwill” and $81 billion of “intangible assets.” And if you factor those out, Verizon has “net tangible assets” of minus $93.4 billion. That’s what most of us would think of as a negative net worth… of about minus $23.35 per share. While investors are paying about $44 per share to buy the stock.

The good news, from the investors’ perspective: they’re not personally liable for that $116 billion in long-term corporate debt. If – and this is purely hypothetical – if Verizon were to declare bankruptcy and default on that debt, stockholders would not be expected to pitch in $23.35 per share to satisfy the corporations’ creditors.

The bad news is, somebody out there would take that loss… and retirement systems across America invest in corporate bonds. (At last report, the NH Retirement System owned more than $433 million worth of corporate bonds.  Can’t tell, from here, whether any of those include Verizon.)

— — — — —

Photo by Stand Up to Verizon via Flickr

Photo by Stand Up to Verizon via Flickr

If you want to support the 39,000 Verizon employees who have been working without a union contract since August 1st, you can sign the petition here.

Stand Up to Verizon is on Facebook here.

Part one of this “Verizon as a case study” series is here.  It focuses on Verizon’s $5 billion stock buyback last February, and the short-term bump in stock prices which followed.

Part two of the series, showing how Verizon executives benefited from that $5 billion buyback, is here.

Part three, looking at the disconnect between Verizon’s reported profits and the dividends it pays its stockholders, is here.

Part four, about phantom stock and how Verizon executives are avoiding taxes by investing in imaginary assets, is here.

Part five, about how Verizon is borrowing money to pay stockholders and executives while demanding givebacks from unions, is here.

This is part six.  And yes, there will be more.

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