Friday, July 17, 2009


A few extraordinary items fairly jumped off the news pages this week, and every one of them had to do with money. No big surprise there, but what is most astounding is how blatant some of the fiscal recklessness has been lately. Consider:

The Social Security Administration held a conference in Phoenix last week. This wasn’t just any old conference; officials say this one was held to help SSA employees de-stress, since their jobs are so stressful that they just needed to get away. So they did, to the tune of $700,000 – that would be $700,000 in taxpayer money. And not only did they do a little de-stressing at a four-star resort, but they even got to bring some of their relatives. And there’s more: As it turns out, their getaway was just one of many such regional SSA gatherings in the past year, which have amounted to about $1 million in costs. So proud of his employees is he, that SSA administrator Michael Astrue personally attended. Here – see for yourself:

So, why is this an issue? Here’s why: In May, trustees reported that Social Security will start paying out more in benefits than it collects in taxes in 2016, a year sooner than projected last year, and the giant trust fund will be depleted by 2037. (The government has to start relying on the trust fund when it starts paying out more than it takes in in taxes). So, the solvency of the system is already in question. Why then, would the agency that represents a potential insolvent government fund be spending government dollars to have de-stressing resort gatherings.

Last week I received a Social Security statement that is sent out periodically to American workers, which indicates that to receive even approximately $2,200/month from Social Security, I will have to continue working at least until I am 70 years old. My gut tells me that the above-mentioned trust fund will be depleted by that time, even though it won’t be 2037 yet. You want to talk about stress? I’ll give you stress.

I do know of one guy who really won’t be needing much from Social Security. His name is Rick Wagoner, and until March he was the CEO of General Motors. And although Mr. Obama essentially gave him the bum’s rush last Spring, don’t cry too many tears for Mr. W. It seems that he will officially retire in August with a tidy golden parachute worth $8.6 million in the first five years. Based on 32 years service to GM, Wagoner is entitled to an annual $74,030 under the salaried retirement program and five installments of about $1.64 million under the executive retirement plan. So, let’s review: General Motors declares bankruptcy and ousts its CEO, who hightails with millions. What’s wrong with this picture? He is 56 years old with an MBA from Harvard and a pretty decent resume. Presumably he is healthy enough to go make a living. More dollars and nonsense, right?

That would be enough dollars and nonsense, were it not for one of our old favorite blogging subjects, AIG. You remember AIG, the mega-insurance giant that the government bailed out to the tune of $85 billion in 2008? Come on, you remember – AIG, the company that AIG took its executives to a lavish California retreat at a cost of $444,000 (complete with spa treatments, banquets, and golf) about a week after the bailout? Well, it seems now that AIG is in talks with the Feds about plans to pay millions of dollars in retention incentives and bonuses. AIG, it would seem, has decided that it is business as usual, although the government reports it has extended taxpayer assistance to AIG in one form or another of about $180 billion to date. Oh, and by the way, why aren't your Congressional representatives hooting and hollering about this? What’s wrong with this picture?
Listen…is it just me, or…..


Joan Eisenstodt said...

WHOA Paul .. about the Soc. Security meeting. I normally agree w/ you and on this, tho', NOT. A few colleagues who do govt. meetings pointed out the costs of the meeting by breaking it all down -- for travel for example. IF there are no meetings, my industry (hospitality) will die-- and we've already seen massive layoffs of those who work in hotels, restaurants, etc., because meetings have canceled. City & state revenues are hurting horribly bec. the bed & other taxes are so far down. Please do NOT equate social security payments and meetings. They are not the same budget and they are not the same issue. Oh and on a personal level? Even the cut back in meetings means I've lost work and may become homeless. I'm not the only one.

Paul A. Greenberg said...

Joan, you are speaking as a meeting planner. I am speaking as an American citizen who is outraged at costs that are incurred unnecessarily by the U.S.Government. If the SSA has legitimate business to conduct with its employees,then a conference is justifiable. However, the justification that the SSA offered had only to do with stress. I, too, experience periods of high stress related to my occupation,but it is my choice to work in the industry in which I do, and it is therefore my resonsibility to mediate my own stress levels. It is not the resonsibility of my employer. I stand by my words, because I believe I am right.

As for associating meeting costs with social security trust funds, indeed I do. The workers who are still employed in your industry face a bankrupt Social Security fund in short order. So, what is worse -- individuals who must realign their careers while they are still young enough to find work, or individuals who are considered unemployable because of their age and who have no government assistance? I contend the latter is more critical.

Were I the head of the SSA, what I would do would be to build in team building and destressing exercises into legitimate business conventions. That was not done here, and as an American citizen I resent it. It is understandable to me that you would say what you said, but I respectfully disagree.