Why Social Security is so important

From MSNBC:

United Airlines gained a significant financial victory with court approval Tuesday to dump its four pension plans, but the airline faces a tough challenge to win back the support of thousands of angry employees. While smoothing the path toward a targeted exit from Chapter 11 bankruptcy later this year, Tuesday’s ruling in U.S. Bankruptcy Court inflamed United’s unions, with some hinting at the possibility of strikes or other disruptive actions. It also prompted a renewed warning from some members of Congress that taxpayers may someday have to bail out the deficit-riddled government pension agency, which now will assume an additional $5 billion in pension obligations from United. “Taxpayers had better buckle up because we will be in for a bumpy ride of bailout after bailout, as more and more corporations dump their pension plan obligations on the PBGC,” said U.S. Rep. Jan Schakowsky, D-Ill., referring to the Pension Benefit Guaranty Corp. that already is operating at a more than $23 billion deficit. The pensions cover 120,000 current and retired United workers, including 62,000 active employees....

J.R. Weil explains why corporations' pension plans are going bust:

...which is where and how we come to both the problem and the scam. While fears regarding the solvency of Social Security are unwarranted, many corporate pension plans—the ones that have been so important in bankrolling the stock-market rise of the past few decades—are themselves threatening to go bust, taking their parent companies down with them. The financial rot already has begun to seep into the airline and steel industries, and the auto sector may be next. (General Motors reports that its current pension obligations add $675 to the cost of every vehicle it produces.) The shortfalls aren’t just a matter of bad luck. For quite a few years now, companies simply haven’t been putting away enough money to pay retirees what they are owed. The PBGC estimates that the underfunding of traditional defined-benefit plans, for instance, deepened by $100 billion last year, to a total of $450 billion. The problem was created by fund managers and CFOs who believed—or at least pretended to believe—that pension reserves could grow at fantastic rates of return forever. Milliman USA, a benefits consulting firm, reports on the assumed rates of return on pension investments at the hundred largest firms in America. How high did these companies bet? In 2000 and 2001, the median projected rate of return was 9.5 percent. In 2002 it was 9.25 percent. And in 2003 it was 8.55 percent. These are wildly optimistic projections, even by Dick Cheney’s standards. Last summer the Financial Times noted that they conflict not only with present reality but with warnings from such mainstream investment experts as Peter Bernstein, Jeremy Siegel, and Jeremy Grantham that “we have entered a low-return environment” and that as a result many investors are expecting long-term returns closer to 7 percent or 5 percent. Even these rates seem overly exuberant, given that the top hundred corporate pension funds earned an average annual investment return of just 1.3 percent between the end of 1999 and the end of 2003....

If this isn't just the latest reason to not start screwing with Social Security, then we may as well concede and let Bush-war do whatever he wants to destroy the only reliable source of income for most retired Americans.