Washington Conversation: Reps. Portman and Cardin, Part 4

In a legislative session frequently marred by partisan bickering, the need for dramatic pension reform drew an astounding level of bipartisan support in 2000 - only to run out of time. So, it's no surprise that it has managed to return with no apparent loss of momentum, thanks largely to the informed and enthusiastic support of two key individuals from each side of the aisle.

On February 7, PLANSPONSOR’s Editor-in-Chief and CEO Charlie Ruffel sat down with these standard-bearers of pension reform – Representatives Rob Portman (R-Oh) and Benjamin Cardin (D-Md) – to discuss the issues, questions and perspectives expressed by our readers.

In the fourth and last part of our series, the Congressmen address the prospects for passage of their bill.

PLANSPONSOR : What happens to this bill now, and how can opinion behind it be galvanized so that it doesn’t die a natural death, as it did in 2000?

Cardin : This shouldn’t be a controversial issue. It’s been a bipartisan effort, and the final result includes all the interest groups that have had a chance to sit at the table. Here’s the key issue – there are two major problems that now confront us on retirement and saving.

First, we put too much stress on the social security system with the demographic changes that are now underway in our country, and second, we have not had enough private savings and private retirement plans in place. What this bill does is encourage more private savings and retirement, and for that reason I would hope that it could be separated from the politics of the tax bill.

After all, this is not a very costly bill in revenue loss over the window that we’re talking about.  We should be able to separate it out and get it to the President and get it signed.

Portman : This bill matters all the more at a time when our national savings rate is so low, so anemic, which is nuts, if you think about how strong this economy has been.  This negative savings rate has had an adverse impact on the credit markets, obviously. Public debt used to be the problem, but public debt as a percentage of the GDP has been going down pretty dramatically the last few years. 

Now the issue is private debt, which underlines the importance of getting Americans to save. It is also worth stressing the advantage of backstopping social security.  And I couldn’t agree more with what Ben says: social security reform is vitally important and Ben and I want to work on that.  The fact is we have a big demographic shift coming, we have enormous pressure on the social security system, and insolvency is going to be a big problem, regardless of how we address it.

Private savings are the best way for people to protect themselves, the best way to backstop the social security system. These are two major points that are important even for members of congress and senators who aren’t as focused on the pension world as Ben and I are – these are macro issues for all legislators. The final point I would like to make is that this bill is not some intangible change, it is about people.  This is about allowing people to have some security in their retirement, and I can’t emphasize that enough. 

Ultimately, it’s about people expressing their view that they want government to encourage that kind of private savings, as opposed to discourage it, and discouragement is what government is doing now with limits being so low and regulations being so difficult. As a result, there are millions of workers out there who have nothing in their retirement years, except social security, and that’s not enough. That’s what this bill is about – it is about people.

Cardin : Get that message out, that’s the key.

PLANSPONSOR : Can this bill be separated from the political com