Title: Working Longer-Benefits
Date: 06/26/09
Program Number: 1816

HOST: BONNIE ERBE

PANELISTS:

DEL. ELEANOR HOLMES NORTON,
(D-DC)

GENEVIEVE WOOD,
THE HERITAGE FOUNDATION

SAM BENNETT,
WOMEN'S CAMPAIGN FORUM PRESIDENT

VICTORIA LIPNIC,
FORMER LABOR DEPT. ASSISTANT SECRETARY

SUNDAY, JUNE 28, 2009

TRANSCRIPT PROVIDED BY
DC TRANSCRIPTION - WWW.DCTMR.COM

MS. ERBE: This week on To the Contrary, up first, can President Obama provide healthcare for all women and children? We speak with his healthcare czar to find out whether he can. Behind the headlines, the benefits of working into retirement.

(Musical break.)

MS. ERBE: Hello. I'm Bonnie Erbe. Welcome to To the Contrary, a discussion of news and social trends from diverse perspectives.

Up first, an exclusive interview with healthcare czar Nancy Ann DeParle. All of Washington is embroiled in a healthcare debate as President Obama moved health insurance to the top of his agenda. He wants a healthcare reform bill from Congress on his desk by the fall.

(Begin videotape.)

NANCY ANN DEPARLE [Director, White House Office on Health Care Reform]: The president's plan will make sure that costs are lower for all families and businesses and the government, because the costs are really what's crushing American families right now. And we know that women - 21 million women and girls are uninsured. So we also want to make sure that they get access to affordable quality coverage. And we do know that they're very much looking to reduce the inequities that have been out there in the insurance market for women. Right now women are often charged twice - a young woman can be charged twice what a young man is charged for insurance. So I'm confident they're going to be looking to address a lot of those inequities in the insurance market.

MS. ERBE: There was a survey that came out this week that said the cost of this will be - could be a trillion dollars or more over ten years and it still won't provide insurance for everybody. What are your thoughts - what are your response -

MS. DEPARLE: Well, first, you're going to see a lot of numbers out there, but we do know this for sure, we know that right now we're spending more than $2 trillion a year on healthcare and we still have a number of people who don't have it. We know that 12,000 people every day are losing their insurance. So we just can't afford to stay with the status quo. It's unsustainable. So we know that that needs to be addressed. And so I'm confident that's what we'll do here.

MS. ERBE: And in terms of paying for this, what's your - I mean there are a lot of ideas being floated. I'm not sure what came through in the House draft. But what's your favorite way of paying for all of this?

MS. DEPARLE: Well, again, remember, we're spending about $2 trillion a year - more than $2 trillion a year right now, and yet we have 47 million or so uninsured people. The quality isn't that great. So what the president's trying to do is redirect some of the savings that we can get from inefficient uses of those dollars in the Medicare system, and also as we start to cover more people there will be less of a need for some of the payments that we make right now to hospitals, for example, to cover the uninsured. And as you know, the president put $950 billion in savings and a new revenue source from equalizing the itemized deduction back to the same level that it was during the Reagan years. He put that on the table to say, here this is and this is how we can pay for health reform. So I'm confident that we can do that.

MS. ERBE: Is this going to require continued sort of changes and nurturing as it goes along?

MS. DEPARLE: Of course, of course.

MS. ERBE: What do you see the problems coming out of this? And again, it's a lot of speculation I understand because you don't even have a bill yet, much less a presidential signature on it. But how do you think underserved families - will every single one - once this bill is signed and into law, will every uninsured single-mother-headed household in the country have health insurance?

MS. DEPARLE: I believe the vast majority of them will. It will take - we didn't get this way overnight and it will take a few years to fix that problem and to get everyone into the system, but I believe that they will. And the other thing - your question is very insightful because healthcare is dynamic, and that's a good thing. We want new treatments to become available. We want to modernize. There's so much that needs to be done. We'll learn new things. We are making - we'll be making a lot of delivery system reforms to improve the way care is delivered, improve the incentives in the system for doctors to keep you well as opposed to just treating sicknesses. So all of that will need to continue to be looked at as we go forward and those reforms take hold.

(End videotape.)

MS. ERBE: Congresswoman Norton, will the president's plan as proposed by the White House help or hurt women?

DEL NORTON: Oh, goodness. The point is to help women and everybody else. If women get hurt, the bill is a nonstarter.

MS. WOOD: Well, unfortunately, President Obama's plan as it currently stands puts more power on decision-making in healthcare in the hands of federal bureaucrats. That is not going to be good for women. It's not going to be good for families. It's not going to be good for senior citizens. Anybody who really cares about quality and cost should be very concerned.

MS. BENNETT [Women's Campaign Forum]: And I think it's a misnomer that there - if we look at what's happening in this country today, the 47 million that are uninsured, they're going to emergency rooms and getting their care - the most expensive place that you can get that care. Those are the dollars that can be redirected in a more efficient way to benefit women and their children.

MS. LIPNIC [Former Labor Department Assistant Secretary]: Well, Capitol Hill reform ultimately will benefit women but it depends on what that reform looks like, and we're still waiting to see what that is. I mean, we're in sticker shock right now because of the Congressional Budget Office report about the over $1 trillion that this plan is going to cost.

MS. ERBE: First of all, Congresswoman, as a veteran of the Clinton attempt to reform healthcare, why did President Obama send a package with so many holes in it to Congress? Why didn't he send his version of a plan, take it or leave it or amend it slightly, as opposed to leaving most of the major decisions to Congress? Because to the public it's coming off as like we don't know what's in this one. We don't know whether to support it or not because we don't know anything about what it's going to look like when it's done.

DEL. NORTON: You see a problem, a real problem that lots of us see, but I think I know the reason it's there. He knows that you don't have anything like a majority that can pass the bill for any configuration of a plan he would put forward. So instead of jumping in himself, he has figured out, this is his notion that as it comes together if he comes in on what looks strongest, maybe he can get that through, and that may be the best way to use him.

MS. WOOD: Look, you know, it's one of these things - I mean, I work for an organization, the Heritage Foundation, that's been wanting to push healthcare reform for well over - beyond even before Hillary Clinton was talking about it in '93 - for years. And I think everybody, no matter what side of the aisle you're on, liberal, conservative, agrees we need healthcare reform in this country. The question is how do you go about doing it?

I mean, we have a system that was built on kind of a 1940s model of everybody goes to one employer and works there for the next 50 years of their life. That is not America today. And so we need to be looking at proposals that allow people to take their healthcare with them, allow for a lot more competition. I mean, we hear a lot from the White House right now about choice and so forth, but using free market language doesn't make it free market. And the reality is we ought to be looking at reforms that allow more choice, that allow people to go across state lines, that allow people to pick what they want in their healthcare plan so I'm not having to cover everything that everybody else wants, which costs more. But we need to have a real discussion. And if you just put one thing on the table and say, this is going to be the debate, it's not going to work. It needs to be bipartisan, not just one side versus the other.

MS. ERBE: Is it possible, Sam Bennett - and welcome to the program -

MS. BENNETT: Thanks.

MS. ERBE: Is it possible to provide health insurance for every single-mother-headed household and children in the country and not raise taxes on the middle class?

MS. BENNETT: I think there absolutely is a way. There's enough money in the system right now. I had the honor of running for U.S. Congress in my home district last cycle, and healthcare was, you know, first on everybody's list of things to talk about.

My stepfather was the hospital administrator of Duke University Medical Center. I lived around hospital administration for years. He ran a plastic surgery unit in Saigon that treated war-injured children.

And the thing that's really notable with the American system right now, there is no lack of money. We spend more per capita than any country on healthcare, but yet, as I said earlier, we're ranked 37th in the quality of care delivered to our citizens, and the number one reason is only a fraction of what we spend on healthcare, Bonnie, goes to prevention. We spend the bulk of our dollars on the most expensive end of care, emergency room care for the uninsured, and end-of-life care for ordinary citizens. By reallocating money towards prevention the biggest beneficiaries of that are going to be women who urgently need good preventative care, particularly when they're pregnant and particularly when children are young. There is absolutely enough money in the system, it's just a question of skillful allocation.

And to get a bill passed, to be honest, given all the different factions involved, I think Obama's plan, though a little messy right now to the outside eye, I think is the way to go about this.

MS. LIPNIC: Well, skillful allocation I think is, you know, the operative term here in terms of how you're going to allocate those dollars and that's really, you know, the $64,000 - or maybe I should say $64-trillion question. No one knows. And, you know, there are plenty of studies that show, sure, preventative care is - we're all in favor of it, but the more there is preventative care the more people consume healthcare. And the more you consume healthcare the more the costs go up. So trying to, you know, do this reallocation and keep the costs down, it -

(Cross talk.)

MS. ERBE: But Nancy DeParle talked, for example, about the reorganization of some tax exemption that I think - to pay for part of the healthcare plan that Congress is considering. And between that and possibly taxing, although she - in part of the interview we didn't run she wrote that off, the business about possibly taxing middle class Americans who are getting healthcare for free from their employers - isn't he going to have to raise taxes on middle class people to essentially pay for poor people's health insurance?

DEL NORTON: Well, there is open talk about taxing certain kinds of health plans that are very luxurious or for people who are getting really subsidized, even though they have a very high income, by their employers. The problem we're facing, and here the president has been absolutely candid, nobody would build a system like this. The only reason the system was built this way, Bonnie. was that during World War II when there were wage controls the only way that people could get any increases were through these plans, so we got stuck with it.

So what you're seeing here is - Obama said when we asked for a single payer plan, he says he recognizes that 30 or 40 percent of your healthcare dollar goes to administrative costs. What he doesn't say as candidly is that he can't take down the insurance industry. You know, there are a lot of jobs there.

So we're left with what most countries don't have. You're paying for something, a huge amount, for what doesn't have anything to do with your healthcare. And the net result is - and this is my concern. I am concerned with these promises for everybody that you're going to get everything. I don't think we deserve everything. I would much rather have a basic - (amount?) - that every is entitled to because they're human beings -

MS. LIPNIC (?): Correct.

DEL. NORTON: - and then say to the rest of us, pay above it. But this notion that we can - you're going to have exactly what you had before and we're going to be able to pay for it and the rest, when that falls through there could be a terrible price to pay for that.

MS. ERBE: All right. Well, we are -

MS. WOOD: And the question is what are we getting for choices?

MS. ERBE: We are out of time. Sorry.

MS. WOOD: All right.

MS. ERBE: Behind the headlines, working longer, longer life expectancies, shrinking corporate pensions and rising medical costs are creating the need for most Americans to work longer and save more for retirement, especially during a deep recession. In the first of a two-part series, To the Contrary examines the financial and psychological benefits for women who work longer.

(Begin videotape.)

MS. ERBE: Mary Turner is 63. Although she could have started receiving retirement benefits as long as a year ago, this mother of eight still works part-time and does not take retirement benefits.

MARY TURNER: (From tape.) I need the money. Bills. I really have to to survive.

MS. ERBE: Today more women like Turner are choosing to work into their retirement. In her book Working Longer, Professor Alicia Munnell argues that current demographic and financial trends prove American women and men must work longer to avoid poverty in old age.

ALICIA MUNNELL [Drucker Professor of Management Sciences, Boston College]: The case for working is really strong. It does three good things. One, it shortens the period over which you have to use your retirement assets to support yourself. Also, it means that you don't have to claim Social Security benefits early. And if you claim Social Security later you got a lot more. For example, if you claim at 70 instead of 62 you get 75 percent more. And third, it allows in good times for your 401(k) accumulations to grow and earn interest. In bad times like this it allows for - sometimes for asset values to bounce back.

CHAI R. FELDBLUM [Professor, Georgetown Univ. Law Center]: So when we had 65 as the age that we were retiring, many of us were dead at 75. Now many of us are going to live till 85 and 90. So it's a longer period of time in which one might be mentally active and physically active and could work, and it's a much longer time in which one needs to have finances.

MS. ERBE: And there are huge psychological and health benefits to working longer too. A 2005 study in the British Medical Journal followed 3,500 Shell Oil employees. Those who retired at 55 were twice as likely to die during the next ten years as people the same age who continued to work.

MS. TURNER: (From tape.) The benefits of working, I think is just make you feel - make me feel good, you know, to be around different people and just - you know, it's just something to do. Just, you know, your mind, you know, you have a clear mind and you just keep up with what's going on.

JACQUELYN B. JAMES, PH.D. [Dir. of Research, Boston College, Center for Work & Family]: Everybody gets things out of work that they don't get out of being at home or on the porch, as we used to say about retirement. One of the things that we found in our study is that the hourly workers like working, they like the social network that they find at work, they like the structure that it provides to their day, they like being out of the house.

MS. ERBE: The average American now works until age 63. But Professor Munnell says data show that person should stay in the workforce until age 66, which was the average age of retirement in the early 1960s. Professor Munnell is calling on the government to raise the eligibility age for Social Security benefits to help convince more Americans to work longer.

MS. MUNNELL: So until about 1990, the trend was towards earlier and earlier retirement. Since then we have really seen a reversal for both men and women, and it's due to changing incentives within Social Security, a movement away from the old-fashioned defined benefit plan towards 401(k) plans which have no retirement incentives. I think things like how expensive healthcare has become means that people want to stay with their employer so that - at least till they're eligible for Medicare. So all the incentives now have changed to keep people in the labor force longer.

MS. ERBE: Retirement security is especially important for women because even today nearly 30 percent of single women who represent a majority of households at older ages, are classified as poor or near poor. This is a product of several factors. Women tend to work part-time more often than men and go in and out of the workforce more during their lives. They also on average earn less than men. But after culling through tombs of government data, Professor Munnell found that women who continued to work until their mid-60s or beyond didn't retire in poverty.

MS. MUNNELL: Generally, women's earnings have not been very strong, and so many women are dependent on their husband for their Social Security benefits and any sort of benefits from their employer. And when - but women are also generally three years younger than their husband, they tend to live three years longer, so that many women end up as widows. And when they become widowed what happens is that their Social Security benefit falls by somewhere between a third to a half, and then the husband dies and you see the income level drop sharply.

MS. ERBE: But there are some catches for older workers trying to stay in the labor force in this troubled economy. The Bureau of Labor Statistics reports workers ages 45 and older form a disproportionate share of the hard-luck recession category, those out of work more than six months. Older laid-off workers remained out of work more than 22 weeks on average last year, compared with just more than 16 weeks for younger workers. When they find work they typically experience a much steeper drop in earnings than their younger counterparts. There's one group for which this is not true, the self-employed. They earn more than other Americans on average, and since they run their own companies they decide to work however long they like.

MARCIE PITT-CATSOUPHES, PH. D. [Center on Aging and Workplace Flexibility, Boston College]: People who are self-employed in part because of the kinds of control they have over decisions of when they work and how they work. They tend to extend the number of years where they are working.

MS. ERBE: In her book Working Longer, Dr. Munnell cites data showing self-employed men expect to retire two years later than other men, but self-employment has no effect on the expected retirement age for either married or single women. This is probably due to the fact a much smaller percentage of older women are self-employed. That said, the major challenge in persuading women to continue to work into their golden years may be to boost their presence among the self-employed, or it may be to encourage women employers who offer flex time which allows them to gradually reduce work hours as they age.

As for Mary Turner, she says she may retire in a few years but she'll continue to work or volunteer outside of the home for as long as she can.

MS. TURNER: And I think too that older people today really just want to work. It helps the mind, you know. It helps you to think, and, you know, just doesn't make you feel bad about yourself. And I think even if it wasn't the money, I know I would.

(End videotape.)

MS. ERBE: So Victoria Lipnic, and welcome to you to the panel too - you were an official at the Labor Department - is the recession doing just that, forcing older people who had planned on retirement because they've lost so much money savings in the stock market to work longer, so in essence will this recession in a way cure the problem?

MS. LIPNIC: It's a painful cure if that's the case. The short answer to your question is yes. I mean the recession is going to force people to work longer. People have lost a tremendous amount of wealth in their retirement funds.

But women, as your piece said, have to work longer anyway. I mean they come in and out of the workforce because largely of their caregiving responsibilities. They have the children, they assume most of the elder care responsibilities, they tend to want to work in part-time jobs, so their earnings have always been lower, and of course women have a longer life expectancy so they've got to have a secure retirement to sustain them for a longer period of time than most of the men so -

DEL. NORTON: And I'm sure all the women looking today, Bonnie, say, well, thank you. And now I see that working longer than I want to is good for my pocketbook and it's good for my health. But the fact is that those are probably just the people who most want to retire. It really goes to something that occurs much before they get to retirement age, and that is our failure to treat them, for example, as part-time workers, with some respect as part-time workers, some respect for the family and for the work they are doing.

One of the more controversial parts of the stimulus package was that there was a requirement to get certain kinds of money for unemployment insurance that you - that the states begin to compensate part-time workers. Well, there were governors that said, I would rather not take the money at all than to begin to reward part-time workers. They're not thinking about the family. They're not thinking about women. And this was trying to creep up on something that we needed to do for some time and that would have an effect upon Social Security and upon retirement. You can't do it other - you can't wait until retirement and say we're going to help you.

One thing we can do is the federal government was making it all but an offer you can't refuse to do early retirement, and so people were piling out of the government at 55, as soon as they had their 30 years. Now these very experienced workers are ours to keep for a while.

MS. WOOD: Well, and I think a lot of folks who were, you know, 62, 63, said, look, if you worked a few extra years it might help not pass on such a huge debt to their grandchildren. A lot of them might say, you know what, I'm worth - that's worth considering and thinking about, which the piece talk touched on.

But, you know, the fact is, I mean this is a huge issue. I mean and right now part of the issue on the part-time thing though that the congresswoman raised is, you know, if you increase benefits at the part-time level you're going to make it tougher and tougher for employers to have that many part-time employees and you may end up losing jobs that these very women need.

MS. ERBE: But I wonder also, Victoria, if - up until the '90s we were lowering the age of retirement, but also, up until the '70s or so there were a lot of jobs in the American economy, a much greater percentage, that were built on physical labor. And now we have a lot more professionals and office workers, and I wonder if they're finding if they retire at 55 or 60, the so-called dream of years ago, that they just get bored -

MS. LIPNIC: Well, sure.

MS. ERBE: - and need to go back to work part-time -

MS. LIPNIC: And there -

MS. ERBE: - for psychological reasons.

MS. LIPNIC: That's absolutely right, and there are plenty of surveys that would show that. I mean 55 is, what, the new 35. So -

MS. ERBE: New something. I don't know about that.

MS. WOOD: Something like that.

MS. LIPNIC: So - but in terms of the retirement age, the days of people retiring at, you know, 55, 60, they're gone for two reasons. One is interest. People have a lot of life ahead of them to lead and they want to be involved in the workforce. And the second is just purely financial. And, you know, keep in mind, part of our retirement system is Social Security. You know, people can take Social Security benefits at age 62. That is going to go by the wayside. I mean Social Security cannot be sustained at that retirement age.

MS. ERBE: Quickly, Sam Bennett.

MS. BENNETT: Well, I think the hidden story here too is about self-employment for women. Now, the president of the Chamber of Commerce, a woman, deplored the fact that only less than 5 percent of the government contracts that are supposed to be going to women in this country are going to women in this country.

MS. ERBE: Women-owned businesses.

MS. BENNETT: Women-owned businesses.

MS. ERBE: Right.

MS. BENNETT: And I think that the real story here is encouraging women to be self-employed, which I was for many years. I'm very honored to be the new president of Women's Campaign Forum. But women who own their own businesses earn more, they work longer, and can contribute to that economy that we need to rebuild.

MS. ERBE: All right.

MS. LIPNIC: And they control their hours.

MS. ERBE: And they're mistresses of their own destiny, a positive use of the word mistress. That's it for this edition of To the Contrary. Next week, the barriers to working longer. Please join us on the web for "To the Contrary Extra." And whether your views are in agreement or to the contrary, please join us next time.

(END)