WASHINGTON - Oh dear, more bad news on the retirement front.
Just as President Bush pledged again to keep pushing for partial privatization of Social Security - after proposing to cut the benefits of future middle-income retirees - a bankruptcy judge has approved United Airlines' bid to terminate its pension plans.
At first blush, unless we are or have been employees of the troubled airline, the nation's second-largest, this wouldn't seem to affect most of us. But it does.
The problem is that the federal Pension Benefit Guaranty Corp. will be tapped to take over about $6.6 billion of the $9.8 billion the government estimates United owes employees. United's retired employees will get their checks but for less than once promised.
The PBGC is an arcane body that more of us, sadly, are going to learn about in the months ahead. US Airways also this year got permission to have the agency take over its pension obligations. Delta Air Lines says it may have to file for bankruptcy because it's facing bills of $3 billion for pension payments in the next three years. Nervous employees of American Airlines are arguing for federal pension reform.
The PBGC guarantees the pensions of 44 million Americans, but it, too, is underfunded by an estimated $23 billion. Some think it faces the burden of another $100 billion in pensions as more companies - not just airlines - decide to shift their pension burdens to the federal government. Some think the agency could run out of money in the next two decades.
This comes as many companies already have stopped offering pensions. Thus, the image that most retiring Americans have pensions in addition to Social Security benefits is no longer true. In fact, the majority of Americans do not have pensions. If they're not socking away money in IRAs and 401(k) plans, they're going to be poor in retirement.
Mr. Bush has said virtually nothing about the problems looming at the PBGC, although his Labor Department has been increasingly concerned about the agency that it administers. But a question the White House soon will have to face is what would happen if the federal agency that insures corporate retirement programs goes broke, which is becoming a serious possibility.
Would taxpayers have to bail out the agency as they also are going to be asked to bail out Social Security and Medicare? Where are these already financially squeezed taxpayers going to get the money for their retirements, pay for their children's college educations, pay ever-higher mortgages, and put food on the table? The federal government is in deficit. There's no help there.
And why should taxpayers who don't have pension plans bail out taxpayers who do, or did? That happened with steelworkers. It happened with auto-parts workers. It's now happening with airline workers.
The administration says tomorrow's workers will somehow gain amazing acumen in how the stock market works and save up nest eggs that will make up for lower Social Security benefits and declining or nonexistent pensions.
Republicans and Democrats alike are going to have to have a serious debate in Congress about how to meld Mr. Bush's plan to let younger workers set up private investment accounts with his plan to cut benefits and the clear evidence that for millions of people pensions are not going to be there for them as promised.
Democrats have done us a disservice by not thinking through all these elements and offering reasonable solutions. Mr. Bush has done us no favor by harping on his privatization scheme without addressing how all these elements will work together.
Democrats and Republicans have been talking past each other about how this nation is going to handle retirees who didn't save enough for retirement. But if there is one message that should now be clear it's that anyone under age 55 should be worrying about how they will get along when they retire - if they can retire.
Somehow Congress is going to have to make it easier - meaning a tax incentive - to save money for college and for retirement. There will have to be steps to keep badly run companies from dumping their pension obligations on the federal government and then selling themselves to the highest bidder.
Our nation has one of the worst personal-savings rates in the world. Forget the benefits of globalization. Forget our amazing national resources. If we don't get a plan in place soon on how future retirees are going to live, we're all in trouble. Our hopes of democratizing the rest of the world and making it a better place will go nowhere.