>> i'm going to go to one issue question, and then i'm going to turn this over to the room to ask questions. how many of you care about public education? yeah, i figured as much, and you

all have observed the increasing conversation around education reform. if you are paying any attention, it's hard not to hear about it. the facts around this is startling. the public education just released a report two weeks ago that tells a story that i think many of the panel is and in this room know that out of every two black boys, one of them will not graduate from high school. one of every two black boys will not graduate from high school, approximately 47% graduation rate among black males. the view has turned to charter schools and do you have a choice and what happens with the public education system, and setting up false al certaintivings around reform. i'm interested in your thoughts is once we're over the question of charter schools and choice, when we get to the school system

serving the overwhelming majority of black and brown kids, it is a public education system. what are the reforms? where do we take these conversations around the cities and states struggling with success rates and want a better education system public and everything in between. i'll ask representative morgan and then mr. brake, i'd love to hear from you. >> thank you. that's a very important question we need to ask ourselves. i want us to ponder a question, and that is in this age of technology, i was on a panel yesterday and we were referred to as the twitter generation. as we live in technology and everything that we do, some of us are twittering right now and you live on facebook and all that stuff, and we appreciate the tweets. those are good things. can you imagine the kids being educated the same way that we

were educated and our parents and grandparented for educated and then we wonder why there's challenges with graduation rates among black males? one thing i appreciate very much is this administration, president obama and secretary orny duncan who rather than the department of education regulating what happens, we're going to provide a vision for the country and the dreck we need -- drexz we need to -- direction we need to move in and holding teachers accountable for how effective they are in the classroom because it's cute that you got a degree and have been teaching for 40 years, but can you effectively get the material to the young people who are depending on you for their futures? moving on from that and evaluating students on their growth rather than coming to my class as a 5th grader, but being

at the 3rd grade reading level. talking about the issue of choice, how is it we can choose everything else we do in our lives, but when it comes to education, your zip code no matter how sorry or poor the leadership is or no matter how uninvolved parents are because this is where you live, this is where you're going to school, and we have to flip, i think, our educational system and think about it as how we deliver education and think about the fact that for so long education has been about jobs and been about adults, but what happens if we change it and it's about kids and a quality education and regardless of where they get that education whether it's in their neighborhood or across town because they have the art and science mag innocent or whatever it is, but it's focused on the best interest of the child. lastly and depending on what add yen i'm in front of, sometimes i say things that are popular and

sometimes i don't. i don't care. there are kids at the end of this policy decisions being made and as much as i love teachers and jobs, we have to do what is in the best interest of this children who are filling this room and looking at us, and if we remain silent and remain married to yes, teacher unions, but i grew up in them, but i think we are dead wrong in this new movement. is everything right? no, but what we are doing is not working. what do we have to do to make children come first rather than adults and jobs. [applause] that's my viewpoint on education. >> if you heard of a book called the savage inequalities in education, the elementary school

that they featured in that book is mine. i was there at ps79 in the bronx, james carter was my principal. when people talk about 300% overcrowding and where are you going to be for class, i can say that's not theoretical, i was one of those case studies there, and you know, but it's not really different than what a lot of people in this room have experienced. you know, we didn't really have the easiest past looking at the collective picture, so putting it in its context, there's a few different things in terms of the vision from the president and from the secretary, we look at it from a broader context. this is from the cradle to the career. this is at the end of the day, how do you train people, how do you prepare them and get them everything they need to so at the end of the day, folks can

get jobs? it doesn't matter how good your schools may or may not be, if you can't get a job -- as the president said a few times, the broader picture is we have to make smart cool. it got quiet in the room there. [laughter] we have to make smart cool because if you look at it from a different context, and not just kids, adults as well, in our community, too often folks think they have to be the brother of lil' wayne to be successful. they don't think i can be a mayor or commentator or work in the government or a teacher, whatever it may be, they don't see that as successful, so if you change the paradigm and say if you do x, y, and z you can do well and make a lot of money, but you have to make smart cool first because then there's really no reason to be engaged,

but then take it not next step and look at what we've been doing relating to changing the education system. for the hvc -- if you went there, raise your hand. all right. all right. over the next ten years, $850 million are going to hvcs, and another $150 million for black institutions. that means $100 million is going to black schools and a change in the processes of i'm not sure how to pay for school, there's more money in pell grants rather than loans. it's the collective change of, you know, race to the top. that's the vision we have now. when i look at my city and state, how do i have a paradigm shift? at all levels, we improve the process. too often our kids are going to

schools where they are destined for failure because people are afraid to change things, and they don't want to change things because that's been the process for so long. this is what we've been doing. i don't want to make this move right now, but in all you're hear on tv and i don't know if race to the top is working or being effective, 48 of the 50 states adopted a criteria. this is what happened, lights get shut off, you know, you talk about education, they want to turn the lights off right now. that's god trying to -- you know -- [laughter] it's this collective vision, but at the end of the day going back to the main point relating to education right now that we have to look at what is working, look at like harlem children zone and look at the med eels that make sense and changing the dynamic and local context because if you do that and make smart sexy and

cool, and giving the resources to do it, then you can change the shift. last thing. you have to be the voices that folks back in your community about why a good education is still necessary. i make it a point any time i go back home, i do. you know, and i used to live in michigan and i see city counselmen there and whenever i can go back to detroit, you have cities with 30% dropout rates, right, so if you don't go back and say i went to college and did well, and this is what happens for our folks and what can happen, there's no reason to believe otherwise. it's a collective piece of changing the shift and dynamic in education policy. >> i don't have any direct influence on education policy, but i do have a unique --

i'm the child of a former school superintendent. my father is 76 years old. my mother was a schoolteacher for 40 years, both in education, and i argue with them. i think this question about education reform is directly tied to your first question about doing things differently and criticisms of people doing things differently. i argue with my parents regularly about they complain that teacher unions are being ignored and the teachers need flexibility and more money, and they are right, teachers need more money and the profession needs to be respected, but teachers need to do their jobs. my parents forget that they did their jobs, and things have changed. they have been retired for awhile, and they knew teachers. my father encountered teachers who, math teachers, who passed

the out cross word puzzles on a daily basis, and that was the extent of their learning for the day. i don't know what cross words have food with math -- to do with math. [laughter] i have to remind them it's easy for them to say teachers should be rewarded because they were good teachers and they excelled. i have to remind my father what made him successful was innovation and doing things differently. my father was the first black superintendent in alabama and two years after he was appointed he was fired because he changed too many things too quickly. it was overwhelming. he was an angry black man, and they didn't like it. [laughter] when i remind him, and he was young and well-dressed and articulate, those are the same things we're hearing now, but people forget because these things they fought for were

different. they were fights just to get into the room, to have a vet, to be the first black superintendent, but now we fight for the very basics that have been left behind, and so i think the key in education reform, a key, not the key, is innovation, but that is what race to the top is doing, and i think it's a phenomenal opportunity now in education reform to see fundamental change and remind people that being substantive and good at your job is important. i'll leave with that. >> thank you. i want to transform to the floor, but before that, is ms. rebecca in the room? where are you? can you wave? great, great, great. you'll see her, she is personnel

director to the white house. she's over there. thank you and welcome to this session. secondedly -- [applause] secondly, there are couple legislated officials who are in the house who could easily be among this panel, young, innovative and brave in their communities. if you could stand up in the room so we can recognize the elected officials who happen to be here. fantastic. [applause] thank you all, and rebecca, i'll yield the floor to you for remarks, and we'll go to questions following. >> i'm going to come up front real quick, and i want to give a shoutout to david johns, thank you so much for having me here and to my partner in i mean, the person i met the second day on the job, mr. michael blake who i

would not be able to do my job if it were not for him doing his job. i'm the directer of priority placement of public engagement in the white house. who thought you would see a four foot too port reiian irish pregnant person working for the white house administration? i'm also married to a howard grad. [applause] i was offered five minutes to talk to you briefly about what we are doing around hiring. in the first year of office, our president brought on 2700 political appointees, 2700. when we get our eight years, we're taking that time two or three at least. this is an administration that believe people are policy. we need the right people in the right places at the right time to make the education reform that you're talking about, to

create new housing policies that fairly impacts all of our communities, and so we need all of you. this is a real opportunity for us to get out into the communities and say, are you willing to stand up? are you willing to join this president in his charge? are you willing to join us and create an administration that shapes america not only for our future, but for our children's future. this is not an administration also where you must be this old to ride. at any point in time, you can serve. we have appointments open from specialists to -- you know, our president just brought on the youngest presidential appointee ever, a 22-year-old, a fresh graduate serving on a presidential appointed board. it's the youngest presidential appointee in history at 22. there's opportunities from

assistant levels to a cab -- cabinet level. we work with education to homeland security officers to launching this new consumer protection bureau. that's a brand new agency. we have to assess everything from your incoming i.t. people that know what plug to computer into the wall all the way up to whoever ends up running that agency, and there are places for you guys within that administration. these are all the political jobs. how many of you have submitted your resumé on whitehouse.gov? really, people? >> don't be bashful. >> really? i'm getting really good at this mom voice. [laughter] we use that website on a daily basis. it's our first stop. it has 275,000 resumés on it, and we hire people --

we cold call people from the white house on a daily basis based on folks who submitted their resumés to white house.gov. raise your hand if you are still in school? you can still submit your resumé. we are looking for people who can serve a year or two from now. if you have not submitted your resumé, go ahead. we have a special file for folks who are still in school a that when you reach your graduation date, i get a pop up saying look at the following resumés. they graduated and are now looking for employment. you know, we're really -- you know we need you to take the next step. for the first time in history, presidential personnel is actually getting out of the white house. we have a travel budget. we have been in annual meetings throughout the country to find

the best people. when we submit slates to the president, i can't tell you how many times we get a list saying, this is great, but is this the best you can do? nothing is more humbling than seeing that red. you immediately are transposed to being in 1st grade on your addition tests and get it back in red and you know you have to take it home. great, i have to take this back to the office because the president said this is not good enough. i'm encouraging all of you. the other address i'll give you is presidentialpersonneloffice presidentialpersonneloffice@who. eop.gov that address lands you in my inbox. i'd like to see more than three hopefully within the next week.

presidentpersonnel office@who.eop.gov, and that lands you in my inbox. i read them on a daily basis. one of the things we do is track to see where we get the best folks. so i expect -- how many people will have their resumé in my inbox by the middle of next week? [laughter] good, good. [laughter] because michael blake, the department of education, david over here, there's a number of us that can't do this work on our own. we need all of you, and if you guys don't get me a resumé, i'll tell michael on you. he will track you down. thank you, and i look tbrd --

forward to seeing you join us in the administration. [applause] >> do you have a cell phone number? i'm joking. [laughter] >> i don't think my husband allows me to give out my cell phone number. >> thank you so much for your time, appreciate that. [laughter] [applause] >> all right, we want to get the district of columbia to pay their utility bill -- [laughter] i'm joking. now to questions, and i'll yield one second for a panelist to weigh in on the previous subject matter, and then going to the audience. >> when i did my remarks, i can be short and straight to the point, that's the reason i'm on this panel. i'm not a politician or media. i'm not white house. i represent my views, and i may not -- many of you may not agree with what i say, but how many of you

are working towards a four year degree or currently have a four year degree? raise of hands. how many of you in this room know someone who does not want a four year degree, but stillments to make something of themselves? it's the same number. when we talk about education reform, we talk about primary, secondary education. we can't forget about those who do not want

>> one of the panelists will determine if you don't know which one among them will offer the answer, so please raise your hand and we'll go ahead and get the mic. also know that we're being taped on c-span, govern yourselves accordingly. [laughter] first question. >> my question is directed to michael blake. i'm a junior insurance major at howard university in new york. in a sense you represent the

views and interest of all black people in front of president obama. how do you just organize which to handle first and listen to and handle your business day-to-day? >> everybody hear the question? in short, how do you represent the issues impacting the black community to the president? well, the short of the, i always start with this. everything is a part of the black agenda. when someone comes to me and says well, what is the black agenda? to me, they define there's issues that apparently are not. i never really understood that. i never really understood how to decide that education and jobs are, but, you know, transportation and energy and housing are not. i never really understood that, but everything is part of the black agenda. when we decide how to engage with the president and how to

work with him on issues, we say, look, everything will work and we recognize at the end of the day is going to disproportionatly hurt our communities. we have a broader legacy on why we need to do these things. when we talk about fair citizen acts right from 101 to 18 to 1, i brag about him, but david happenson secured a opportunity for a company to set aside contracts from minority business and global construction. we're always going to the president asking how to fix things for everybody and recognizing that everything we are doing will immensely help black folk. it's the understanding that all the pieces, talking about

today's sustainable communities and say, okay, we're partnering up hud, transportation, and eta, i break it down and say it doesn't matter how good your job may be or housing may be if you can't breathe in the community you live in. it doesn't matter how good your air quality or transportation may be, if you don't have a place to live. how do you break it down and make it practical? we talk about let's move. it's not just an exercise and having people running around. it's that you see what's happening in our community with comield obesity and you have potato chips is all the kids get with respect to school and they don't have fresh food. that might be the only time that kid gets at all or the only meal that kid gets all day. i was teasing someone yesterday and i said, you know, running black outreach for the first black president during

congressional black caucus week gives you a slight amount of pressure. i want you to walk away realizing this. he understands the i'll pact and the importance -- impact and importance of what we are doing for our community, and sometimes people say, well, we don't hear or see it enough, we're not feeling it, it's a bigger legacy that we're trying to create right now. you know, another good example that doesn't get talked about. we worked on the president signing an executive order on april 26 for small business procurement and get small businesses the opportunity for contracts. a part of that was women coming to us saying i don't have access to capital. now, the media doesn't talk about it, but that is helping our communities. when we talk about race to the top, we're talking about turn around schools and colleges, that helps our communities. we talk about hud, and shawn is

phenomenal, when you talk about pathways in the department of labor, all these pieces help. walk away knowing the whole agenda is a black agenda. >> thank you. next question? >> hi, i'm asuka. my question is on glass sea gull because right now most of the communities and local government is mostly due to the fact that our banking system is consistenting of deer derivatives, and if our economy is going to go back to productive united states, we have to establish bank systems into two, which is one that is legitimate. for example, pension plans -- >> question?

>> okay. that system has to be reorganized, so my question is anybody on the panel who knows about this law, what do you think about passing this law within this month? [inaudible conversations] [laughter] >> it was once the question started, i had a feeling where it was going to end up over here. [laughter] the short of it, i mean, it's about preventing depolice deflation in the banks industry, and the timetable is unsure moving forward on the hill. there's the understanding of, you know, let's go further back. the bigger issue is not just about one piece of legislation. the bigger issue is with a financial industry about to collapse with two that just wasn't helping the community

that were hurting. you know, more practically what you should walk away from is there's a timetable and where they may go, wall street reform that passed, again, this is going to disproportionally help our folks. who has lived in a community with check cash in? who says what a payday lender does to our community? who experienced trying to buy their first home, but they don't understand what they are signing on to? the broader piece right now is you have something that has been passed and signed that's going to be helping our communities and respective piece. for glass sea gull and those walking away from political one on one, it's an act, i think in 1932 was addressing depolice station, -- deflation, and we have things now helping our communities and

banks. >> i think this is a great opportunity for a teaching moment for those of how. someone asked about legislation how it passes and when it passes. you know, i represent microsoft, the unions specific. i will not represent a payday lender. i will not represent someone who is on every corner in our community and takes our money and doesn't set up a savings opportunity for us to do, and those of you who don't know about the payday lending, and you can do a little research, but if you oppose payday lending, i'm not saying you have to, you can oppose anything, the teacher issue mentioned earlier. you need to become involved and listen to the process and become a part of the process so that you can then let your voice be heard. >> thank you. we're going to -- actually, i'm going to yield the

floor to one of our distinguished guests who just walked into the room. i ask you all help me welcome and acknowledge the only african-american woman from the new york congressional delegation, congressman evette clark. [applause] >> i have a question. i'd like for you, and this is mike, if you could chime in as well. when talking about instructing young leaders and becoming better leaders, can you talk about it in the context of the global markets? i know as mayor as thrapt that, you -- atlanta, you have one of the largest exporting industries in the country. can you talk about leadership, talk about, you know, the development of leaders in the context of the global markets

which is obviously the markets in which we live in and function. >> well, i think having a network and a data base of individuals who are in the space is how we're going to help our generation specifically african-american do well on the global stage. so for example the city that i lead has the busiest passenger airport on the planet, so we handle 11% of all domestic air traffic in the united states, and wherever delta dandz in the world, we open up new economic opportunities. the city of atlanta has a tradition of spending somewhere between 35-45% of all of the dollars on women and minority businesses. when you're on the busiest airport in the world, about 50% of every dollar spent in that airport is spent with a woman or person of collar. -- color.

that is deliberate and a legacy we expand and uphold. the real answer to the question is we identify talent and marry it with the opportunity. we do not create new opportunities without partnering with a woman or a minority. i think that that expands the playing field. in atlanta, we look for talent and merit, and when the opportunity comes, we don't move forward without a partnership. maynard jackson said i have provide police, water, and pick up the trash. if you don't include women and minorities, we won't grow. the same is true in the international space. my goal as mayor when i'm done is that atlanta will be a city that is attractive because you can reach 83% of the united states from atlanta in two hours, and with the 1.6 billion

terminal we are building, you can get anywhere in the worldment we're going to be a global city. all these opportunities driven by the city of atlanta will have partnerships. the same way the leader at the white house who identifies talent and merit, we have a data base in the city of atlanta that is constantly being built. when we have have a new opportunity, we have a bench of partners, if you will, and that's one of the reasons that atlanta has more successful and thriving african-american businesses than any other city in the united states of america. that's what i think, and that's where we are going to the future. in terms of how you really do that, you need to have a direct relationship with any administration, and you do it through meetings like today. you make yourself known because a mayor sees deals all of the time. deals are either brought and

recommended, usually by majority companies, or deals come out of necessity. so, for example, we just let the biggest bind offering in the city of atlanta, $1.6 billion bind offering for the airport. through a competitive process, every single firm that bid got work and $400 million of that transaction is led by sue disan, an african-american inestment banker, and 44% of the deal is going to minority and women in businesses, and no one complained or said a word because it was an open, honest, talent-driven process. if i didn't know sue disan, you have to make the people known so there's no excuse and you don't use the tired statement that i couldn't find a qualified minority. we never say that talent -- atlanta. if you can't find one, you better come to know one.

[laughter] [applause] >> one more additional sort of federal policy piece. when i was first in the government, i worked for the u.s. representative trade office, and then at the partner of commerce, and back then there was a guy named ron browne, first african-american commerce secretary, and one of the most important things of ron brown, was to set up these one-stop shops populated by small business administration, the department of commerce, the u.s. commercial service, and in most communities, there's a one-stop shop where if you are a business person, you can go in, and they look at opportunities abroad and what's happening in places, and help plug in both foreign companies coming to your community and domestic companies that want to go abroad. go to the department commerce website and check it out. >> i'm glad you asked that

question. i just returned from vacation in china. i spent a few days in beijing and i will tell you my time particularly in beijing, we are far, far behind in development, in growth and infrastructure. i was in china maybe six years ago. i don't remember the subway line. i know they had two lines, but now they have 13 lines. you can get anywhere in beijing that you want to go on the subway. anywhere. they stop every three or four blocks around the whole city, and it's a fast running train, and while you're on the train, you see advertisements on the wall on the subway tum and there's buildings there unlike you've ever seen even in new york. the development and culture in china is progressing quickly,

and if you know anything about the trade deficit, we owe them a lot of money. [laughter] i think one thing that you can do particularly the college students we have here, i am a communications professional and specialize in urban housing messaging, but it is important to know what is going on outside of your local bubble, outside of your state bubble, and certainly outside of this country. watch bbc news. you will see an entirely different perspective on both the politics and policy here in the united states and elsewhere. learn a foreign language. i'm studying french. pay attention to foreign policy and read as many books as you can about culture wars and human trafficking and issues that have

affected the world around us, and all of those issues, those international issues impact our daily lives, dmessive toll -- domestic policy, how we are viewed, and make you more marketable long termment don't limit yourself in your career. it's important to find a niche area. my niche area is crisis areas, but make yourself as marketable as possible and having some interest in or way to expand your knowledge base beyond the 50 states is important. i think you can, you can contribute greatly, and there are not enough people of color doing that. there are not enough people of color at the state department as civil servants or foreign service officers. there are not enough people of color working in the cia for

example. there are not enough people of color from the united states working outside our borders. i think marketing yourself in that way is greatly important. >> thank you. [applause] >> short answer. there are enormous amounts of opportunities internationally that we are not tapping into right now. you know, think about how -- i tell folks all the time with policy there's almost nothing you can do that's not impacted by some form of policy, so from the food that you eat to the transportation that you utilize to the clothes that you wear, there's someone domestically and internationally that needs for us to get more engaged so when you're creating jobs and doing what you are doing right now, too often we seem to only think about our, you know, block that

we're on in our respective community. there's someone in the caribbean, there's someone in asia, there's somebody in africa who can utilize the skills you have and the end goal that you're providing to tap into that. you know, the president said we need an increased amount of exports because we have folks in need, but also recognize this, and this is going back to earlier. educate people to show that this is still cool and exciting, that business is exciting. there are great opportunities in the business space that we don't even think about sometimes. you know, i have a good friend, john o'brian telling us about meeting this brother who makes great soups. he was like, i just don't wear it because he's a brother, but because he has a good product. so, you are a good brother, good sister who has a good product, and just don't utilize it in this space, but internationally

and we can tap into the global markets in the way we haven't been. >> great. thanks, to the back of the room and to the other side of the room. >> thank you to the panel for sharing your wisdom and i'm a moore house brother. i represent -- this question is for you and i know you speak about mentoring and the roles that played in your success. can you talk about that and why that relationships and that piece is important to young and emerging leaders like us? >> thank you, michael, my chief of staff to publicize the book -- [laughter] you know what i'm saying, relationships. >> very necessary; right? >> on the serious note, i appreciate that question and i have the honor of being on a panel yesterday with congresswoman clark talking

about mentorship and interrelationships among women. i want to get to other questions, so i'll be brief and say this. when i was in high school and growing up in the naacp, many of my mentors were women. when i got elected and running for office, even today, my mentors are men. yes, because they thought that was a good way to get in, but for the most part it's because they were the ones much more approachable and were open to mentorship. when i first got elected, the women were not there for me, and i expected that they would be like, sister, i'm so glad you're here, let me show you the ropes. that just didn't happen. rather than being angry about that, i realized the mistake i made was i didn't ask for mentorship or take it upon myself to develop those relationships. i was not looking for a mama,

but a mentor. i was looking for someone to help develop me as we go along together because i was still their colleague. what i say to you finally is it is absolutely critical to seek out the relationships with people regardless of their age. most of the people i work with whether it's the book project and that team, no apologies, life loving policies and dajal is quoted on the ideas crof, but it's about regardless of age and learning from that experience and wisdom. even if you don't have time for a structured mentorship, make sure that you are developing those relationships and talking to people and e-mailing and staying connected, and finally make sure you are mentoring others. if if you are 20 or 19, there are people in high school or other folks looking at you that you ought to be pulling to the side too and saying, let me show

you how to better dress or present yourself or whatever it is you need to do and check ourselves and do that as well. thank you for that question, michael. >> thank you. [applause] good afternoon, panel, i'm andrew lee from atlanta, and my question is to jamal and the rest of the panel. i want to know more about what you think about the tea party movement and the enthusiasm on the right, and what to do as a community to fight back? [applause] >> you know, people get frustrated when i say this. i'm not mad at the tea party people. i think they are doing what is their constitutional right and responsibility to do which is to peacefully organize and advocate the positions they think government should take. now, i disagree with what they want to do for the most part, but the problem i have is with the people who are their opponents, and the question is whether or not our communities

that feel strongly are organizing and protesting about the things that we think are important just as equally as well. you remember last year during the health care debate you see it on television or see forums among members of congress, and in the forums people stand up and talk about death panels and this and that and calling people names and talking about the president, but where were our allies in those same meetings protesting and saying i like what you're doing, keep doing what you're doing and stiffening the spines of our representatives because they respond to the people who come out and talk to them. i think on october 2, 10/2/10 -- doing a little plug for -- [cheers and applause] for what the naacp and labor community are doing to get together in washington to express the views about a different perspective of what should happen in the united

states. i advise you to look at that program and see if it's something you want to be a part of. >> thank you for being him. i'm from mt. vernon new york, and i just had two quick questions. first, most people speak about how there's different ways in getting involved and getting into politics, but it seems a lot of us have advanced degrees. is that the most essential way into getting into public office or is this doing anything against -- or to better our community, and secondly, how can we encourage youth to be engaged when private sector jobs are more higher paying and public service jobs only offer a salary for our loans. can you speak to that and our fact of the community? thank you so much for being here. >> i'll chime in a little on both. on the advanced degree, actually, i had this conversation before the program

started with a young lady helping with the program. i got my masters degree from american university in public communication. again, i'm press secretary. i do communications like jamal on behalf of the hud secretary. at that time i went back to school, i was working for congressman william jefferson, a former cbc member. you may have heard of him. he's from new orleans. he was convicted last year of -- i do too. i was his communications director at the time the investigation started, and three weeks later hurricane katrina hit. it hit on the day that i started graduate school. i went back to school because i saw that everybody else was getting a masters degree, and i thought it would make me more marketable. i found in the two and a half

years i studied in graduate school that it was actually my experience that was making me more marketable. i don't think this applies in all proafertions, but -- professions, but in my area of expertise, your experience propels your career. a graduate degree doesn't hurt. it's an expensive thing to have, but it doesn't hurt. i don't know, for me, if it has added much, but i have been blessed to fall into opportunities where my experience has grown and developed in such a way working on communications at a time that a member is in crisis can do one of two things. it can make you or break you. for me, it helped me develop a broad set of contacts without a broad set of reporters, and the next job was the house director for the judiciary committee.

why? because i knew all the reporters covering jefferson's case, were covering the jew dish yaish committee, and my next job was communication director which is yet another experience that helped to grow and propel me, and you cannot match the experience of working for a member of congress who has been around as long as john conyers. there's so much to learn there, and so i say it's absolutely not essential to go to graduate school. it cannot hurt. often times it helps. if you're going to an ivy league, you cannot beat the networking opportunities out of an experience like that. i think jamal will tell you that, and secondly, civic engage. . -- engagement. not everybody is cut out for public office or working in the public sector.

you see that often times when people are ought to get money -- out to get money. this is not the place to do it. you have to have a sense of purpose to be here, and you cr that sense of purpose through mentoring and bringing people up and letting people know how full your life and experience is talking to high school students or college students and mentoring students in your community where you attend college. i have only worked in public service and only had government jobs. i worked on the obama campaign. that's the only nongovernment job i've had. my sense of purpose is on working on issues that really connect with people. there's nothing more important to an individual than their shelter, and that is the sense of purpose i find in my current role, and so that's all i have. >> i took a different route from melny. i did grad school first, and then i started working on the

hill. there's one piece in whether you want to be a public servant or an elected official. there's a sacrifice there. the money will come. i'm a witness. it will come, but you got to do your dog hours. you got to do your time, and i will strive if you do one thing, will you go make that money afterwards when you make that sacrifice, but don't let that public servant go, because your community will os need you. >> as one of the two senior people here, the mayor and i -- >> how do you define old? [laughter] >> i said older. >> older, okay. >> older on the panel. i'll say this about graduate school, there are things in your life that you always be doing the thing you're doing today, and sometimes going into a job interview or a new situation, go

in as prepared as possible and prepared to answer any question that may come up, and education is one of the markers people use about future opportunities. i would agree with you a little bit is that you should just get as prepared as possible in whatever way is appropriate. very oven education is important and just to have e credential. it's not a reason to get knocked out of the game. >> for the second piece, i mean, i think we all touched on it relating to the degree. i have a bachelor of science. i don't have a master degree, but back to the first point, if you are good, people pick you up and plug you in. i've been around a lot of folks with degrees that i don't want anywhere around me. [laughter] it's like, so if you're good, they'll plug you in. for the second piece, and i think about this all the time relating to, you know, ology of us in government. the reality is you're going to

work a long time, a lot of hours, a lot of personal sacrifices, and the question is well, why do you do this? how do you get someone engaged? i tell people all the time because my people are still hurting and they need me. that's the way to frame it. don't say our people, say my. you can define my as whoever that is, african-american, folks on your block, someone you went to school with, because then you can appreciate it. you can never compete with private sector dollars. that's a different degree, but as others will show you, and you know, jamal is a great example, being in government, and then, you know, with jamal and don donna, you have folks on tv and engage all the time and are rep table black voices. you'll get that opportunity down the line, but the argument you always go back to is my people still hurt and still need me. >> great. speaking of resources because

there was a number of people raising their hand still in college in the room. i want to recognize two people. one ms. stephanie brown is with the youth college division still working with the ncaap. [applause] for you young people looking for a way to enhance your training in leadership skills, the naacp provided that opportunity for many of us in the room and continue to do that today, and thank you for that, and then secondly, and this is 5 bit shame -- a bit shameless, a program i helped direct and lead is called young people for where they identify young progressive leaders on college campuses all around the country and enter them into a one year fellowship opportunity to enhance their leadership and make them stronger leaders for this country and the programs in this room, ms. rebecca thomas, if you

would just stand and let people see you. [applause] thank you, thank you. i want to toss it to the panel for six minutes for each of you to take a minute and offer whatever last piece of advice is most critical you want each individual in the room to walk away with. i'll start with you mr. mayor. >> well, i want you all to work harder than everybody else. i mean, what i've heard from all of the panelists is none of this happens with hard work. i want you to pick your lane. decide what you want to do, but i want you to give it your full effort and spend yourself. you know, you can't forget that this time you have, the physical capacity you have right now, the mental acuity you have, you will not have again. make sure that you exploit this band wide st of -- band width and work harder than anybody else. that's what i want you to

remember. thank you for having me. >> thank you. [applause] >> one of the first questions we had this morning talked about passing the torch. sometimes you have to take that torch. be unapologetic about it if you do it the right way because people will notice you are a leader, and you have to sacrifice. you know when it is your time. you know, i think melanie was one of the youngest, but she knew it was her time. you have to believe in yourself at all costs because if you don't, no one else will. this is only the beginning. >> okay, thank you. [applause] >> i'll say, honesty is still the best policy, and by that, here's what i mean. you have to be honest with yourself about what it is you

love and what it is your passionate about, and then i advise you follow that passion releapt leslie as the -- relentlessly. if you don't have kids or a mortgage, if you don't -- you don't have a reason to do anything for money, do it for the love and passion, and later you make money often of your love and passion, but you will be better at it, work harder at it, and do it even when people don't pay you that makes you better, and finally, be honest about your weaknesses and your strengths and then compensate for your weaknds whether it's adding people to your team or exploiting the things that you're strong enough at. >> thank you. [applause] >> i say i appreciate your support on my book that just came out this week.

[laughter] seriously, there's a lot of important topics to talk about the goal in the book. the goal is to spur conversation and more importantly action. i want to leave you with my favorite quote. it says if every person is born into the world to do something distingive and unique, and if he or she does not do it, it will not be done. i want everybody in the room to be reminded that it's not by accident that you are in this room, this weekend, at this very moment listening to the messages you have heard. i want to challenge you to do is not wait and to realize this is our moment. this is an incredible time for audacious leadership, for passion and for service and as michael has said, our people need us, and so i'm reminding you that you were born to do that thing that gets you up in the morning, and if you don't do it, it will never be done.

>> thank you. .. >> i wasn't just loyal to them, but the second district from louisiana. three weeks after the investigation was made public was hit by katrina. the sense of purpose was immediately engaged to helping to communicate about the very immediate needs we had on the

ground in new orleans. so loyalty to both someone who had started as an intern for congressman jefferson. then i was a staff assistant and press assistant, then i was his communications director. loyalty to someone who had helped to start my career, but loyalty to my hometown and to the needs of my community. having a sense of purpose about what you do. i have always in my career loved my job. there are not too many people i know who can say that. and it is because i have been blessed and fortunate to find opportunities that help me enage that sense of purpose that i am looking forward. i don't know if i'll ever leave government. i'm not sure outside of government, i will be able to find that sense of purpose. finally, i started with this speak up and speak out.

if someone asked your opinion, give it, be honest. if they don't ask your opinion, and i have one, give it, be honest. and it will pay off. anyone who knows me in this room knows that i will always be honest with you whether you like it or not. and that has really paid off in my career and in helping to develop other people's career. mentorship is important. there's nothing that i love more to see someone i've helped get a job, succeed. i want them to take the torch. like alicia, i too found it difficult to find female mentors who were open. jennifer gave me career advise and was always there for me. it's because of people like jennifer that i am now giving advise to others. those are a few takeaways.

take risks, be loyal, have a sense of purpose, and help other people. thank you. [applause] [applause] >> i want to start. it's still an organizer by training. my e-mail is mblake@who.eop.gov. if you need anything else from us, go to whitehouse.gov and for the young people in the room, go to healthcare.gov. a lot of things that doesn't get talked about, you can stay on your participants health plan until age 26. that's critical right now. a few real kick -- real quick things. people have been doing plugs.

go visit the white house. and number two, it's just a train. it's not a earthquake or the coming of jesus. folks out here looking around. booth 30 9 is upstairs. we want to get the message out. we asked them to be ambassadors of change. if you want to be the ambassador and get the word out, please join us. look, i think we heard a lot. i want to put in the context how we started, how i started, we are the ones we've been waiting for. don't look for somebody else. there's enough, this is a beautiful site from our end, a packed room of folks who have been here for some has been here since 9:00 who want to be engaged. there's no reason why we can't do something. realize the name of the group that has us here, impact. it's not just showing up. it's not just being in the room. what impact are regoing to leave

and do? i want you to realize the consequence of inaction. a lot of times we go through these things. nothing happens. very practically, in a few weeks, there's going to be a real clear choice. if african-americans sit home. a lot of times people are saying the president is not on the ballot. the president is on the ballot. because of the all of the things we've been trying to do to help people. you've been working with us to help people. if you don't show up and show out in a profound way, we don't be able to do that. [applause] [applause] >> when i took this job, one the first meetings i had was with a fantastic meeting. she said to me after all of the african-americans that come have and all that will come, god

chose you to be the first black outreach president of -- president. i do not take for granted what we are trying to do. i want you to appreciate something the president said to us a few years ago. if and when i win, america is going to look at itself differently. when i win, kids around the country are going to be believe they can be anything they want to be. for everybody in the room, let it be a validation that we not only are doing to be anything that we want to be, our kids are going to be anything that they want to be. as long as we have the impact that we desperately need. [applause] [applause] >> help me again give it up for the amazing panel that we had today. [applause] [applause] >> here's a look at some of our programming tonight.

>> nobody should be forced into education against their will. that's a presumption that comes from the dark ages. it will cost 60 million pounds to keep everybody in education until they are 18. in the top of cuts, that's ludicrous. education is not for everyone. and i appreciate because it's been said already the motion does not just include education, but training and apprenticeships as well. however, it must be said with the loss of the service due to the cuts announced last week, it will be harder than ever to find the placements. the work that connections did to

get young people into training is invaluable and will be sorely missed. because of the lack of the support from young people, job opportunities will be loss and youth unemployment will rise. and these people who would have been found a job at 16 will be forced to stay in school and possibly become a disruptive influence in the classroom. there's a boy in my area. nice little plug. his father is a owner of a local sweet shop. the boy helps out with his father in his shop and has done for generations as generations have gone before. when he turned 16, his father was taken ill and could not longer work. under the motion put before you today, he could not take this business on. are we really saying we wish to see the family sweet shop and other businesses sold out because at 16 he has to be in education and is clearly not mature enough to run a business? nowadays, employers increasingly

refer to take home workers for the experience needed to do the job. so by the age to 18, you will have two years less work experience compared to somebody that left at 16. for what? a few extra qualifications not always for the job. you will have six years less experience than a graduate of the same age, what does the graduate have? a degree in kligon, $40,000 debt, and they are unemployed. how does keeping the person out of working for six years solve the unemployment crisis? the answer is it doesn't. [applause] [applause] >> you can see more from this british youth parliament debate which also includes sex education in schools and the rising cost of university tuition fees. tonight at 8 eastern, here on

c-span2. after that at about 9:40 a forum on the ethics of war. >> here are some programs that c-span is airing thursday. jeff bridges on his work to reduce hunger. jane goodall. and lawyers discuss the impact of retired supreme court justice john paul stevens. and bill clinton presents the medal to tony blair. on c-span. >> this week marked the 40th anniversary of the assassination of the president jfk. we'll talk to the security

agents and mr. blaine's no few on c-spans "q & a." >> now testimony with researchers and home care worker. we'll hear about the status of the social security program and other retirement benefits including pension plans of -- plans. this runs just under an hour and 30 minutes. >> committee on health education, labor, and pensions will please come to order. i want to welcome everyone to the hearing on retirement security. what's happening to retirement in america today and in the future? this is an issue that is of critical importance to every american family. a recent survey found that 92% of adults age 44 to 75 believe there's a retirement crisis in america. are they right? is there a retirement crisis? let's consider the following

statistics. that we'll hear more about here at this hearing today. over a quarter of workers do not have any meaningful retirement savings at all. none. one out of five. nearly half of the oldest baby boomers who will turn 65 next year are at risk of not having retirement sources to pay for expenditures, food, fuel, housing, clothing, that type of thing, and uninsured health care costs. we learn from the testimony that we'll hear from the employee benefit research institute that the gap between what people need for retirement and what they have is estimated to be $6.6 trillion. i think those numbers make it perfectly clear that the system is failing many americans and that the three-legging stool of retirement security. private pensions, personal

savings, and social security. those three legs have gotten pretty wobbly. it used to be that many workers would rely on the defined benefit of pension. those plans are the best way to ensure that workers have a secure retirement because they provide a predictable, guaranteed source of income that workers can count on for the duration of their lives. unfortunately, the pension is in endangered. the number of employers offering the plans has fallen over the past three decades. now less than 20% of workers in the private sector have the security of a defined benefit pension. the vast majority of employees with any retirement plan at all have a 401(k). those plans do not provide real retirement security. they leave workers exposed to the constant risk that they will perform poorly. we have to look at what's happening in the last few years. billions of dollars of

retirement savings have evaporated. they saw their retirement vanishing over night. 401(k)s also do not providers with lifetime incomes like the pension plans. that means that workers and their families are force to bare the risk they will outlive their retirement savings. plus in these troubled economic times, families are faces challenges. saving for retirement is just not an option for many people. wages have been stagnant for years. people are working harder and longer than ever before. they still cannot seem to meet the cost for basic everyday needs like transportation, housing, let alone setting aside money for their old age. for many americans, the only retirement security, the only solid retirement security they have is social security. but that to is under siege.

there are those who want to privatize the system, cut back benefits, raise the retirement age. they said everyone should just work longer. somehow retirement is a luxury. clearly these people do not swing a hammer for a living. or string high power lines. or work in our cornfields or oil rigs or lay bricks or drive trucks. for americans who work in these physically demanded jobs, working longer simply is not an option. a lifetime of hard work takes it's toll. at some point, the person can't do it anymore. we'll hear about that at our hearing this morning. we're facing a future where no one ordinary reason the rich will have an opportunity for a safe and secure retirement. people that work hard will find themselves on the brink of poverty. unable to pay the basic cost of living. it's going to have consequences

for our families and country as a whole. it's time to face the retirement crisis head on. that's why on the committee on health relations, labor, and pensions i'm going to make retirement a priority. i will hold hearings from a number of different angles. i look forward to working with my colleagues on comprehensive reform to help them save for retirement and make sure they have a source of retirement income that they cannot outlive. unfortunately, retirement has always been in areas we've been able to reach across the aisle and i hope we can continue. i thank you all for being here today to discuss the important issue. i'll go to my good friend who have been heavily involved in this from his days in the house to here in the senate and i'm going to count on senator sanders to be one of the lead persons in our hearings going into next year to examine all of

the aspects of retirement security. with that, you would yield to my good friend, senator sanders. >> thank you very much, mr. chairman. and thank you for stepping up to the plate and getting involved in an issue that's concerned of tens and tens of millions of americans, but an issue that we do not discuss all. i'm glad we are going to jump on hear lings. i don't have to tell you, but all over the country, there's a feeling of deep anxiety. something is happening many our country. people not quite sure what it is. what they do know is that in this great country of ours, the middle class today is disappearing. people know that. there may not be phds in economic. they are worried their kids will have a lower standard of living than they do. they understand that our manufacturing base which has supplied so many good jobs for working people have been

eviscerated in recent years. they understand that medium family income in eight years of the bush administration went down by $2,000. millions of people left the middle class and went into poverty. we understand that we have the highest rate of the childhood poverty in the industrialed worlds. while the middle class is collapsing and poverty is increasing, virtually all of the new income created has gone to the people on top. so that people we have the top 1% -- top 1% earning 23.5% of all income in america. top 1% earning more income than the bottom 50%. top 1% owning more wealth than the bottom 90%. that's disparity is growing wider and it is the widest in the industrialized world. and in the midst of all of that as you've just indicated, there are now a tax often from billionaire type operators, wall street people who are going

after the one area where people have had security for the last 75 years. the truth of the matter is that social security has been the most successful federal program in our history. during all economic times, whether we are in prosperity or in severe recession, social security has paid out every nickel owed to every eligible american. we take that for granted. during the last wall street collapse when people were losing the 401, pensions, not one american did not receive 100 cents on the dollar of what he or she was owed for social -- in social benefits. that is a pretty good record. and while all of us must be concerned about the $13.4 trillion national debt that we

have and the very large federal deficit, it is imperative that we be honest about the causes of that national debt. i got a little bit tired of people saying, well, we've got to privatize social security, we have got to cut back on social security benefits, we've got to raise the retirement age, because we have a $13 trillion national debt. you know what? social security has not added one penny to the national debt. quite the contrary. you want to know why we have an national debt? we're fighting two wars which we forgot to fund. we've given hundreds of billions in tax breaks to the top 1%. no one worried about that. medicare part d unfunded. out of wall street, unfunded, social security has a $2.6 trillion surplus. hasn't added a nickel to our national debt. so if there are people who for

ideological reasons, people don't like government, people who want wall street -- want workers to invest in wall street for their retirement programs, that's fine. that's a good ideological position. not mine. but let's get the facts right. and the facts are that social security is not responsible in any way for our deficit or our national debt. let's also understand that according to the cbo, congressional budget office, social security can pay out every nickel owed to every eligible american for the next 29 years. we've got to a lot problems in this country. we have 25% of our kids on food stamps, infrastructure which is collapsing, we got two wars, national debt, worried about health care, got a lot of problems out there. but you know what, social security happens not to be one the major ones. is it an issue that we should address? so that our grandchildren and great grandchildren will have the benefits?

yes. for 29 years, everyone will get 100 cents on the dollar they are owed. i have some ideas, i think you have some ideas. let us not go forward either in privatization, let's not go forward in raising the retirement anal to -- retirement age to 70. a lot of the billionaires on wall street that think raising the retirement age to 70, they are not out laying bricks, plowing snow, lifting patients in the nursing home. they are not out doing the physical labor. to ask american workers to be working until 68, or 70 is reprehensible. not only work for the working people, force them to work to 70, it tells the young people who want to get into the labor market you can't get in because we got old people doing the work. meanwhile, unemployment for our

young people is very, very high. so social security, the reason that there's so much opposition to social security for some of these billionaire guys is we have social security has worked. it has done exactly what it is supposed to, not only for the elderly, but for the disabled, widows and orphans. this senator is not going to let some wall street people move towards privatization or raising the retirement age. thank you, mr. chairman. >> thank you, senator sanders. we want back, we have two panels. our first panel phyllis borzi, assistant secretary for the employee benefit for the department of labor which oversees private sector retirement and plans to 250,000 americans. previously, he was a research professor at george washington university, and of counsel of donahue and donahue, specializing in arisa and

benefit plans. she will give us the problems facing social security, and aimed at retirement security. ms. borzi welcome back. you've been before us before. welcome back, your statement will be made a part of the record in it's entirety. please proceed as you desire. the mike. >> no one ever accused me of not being heard. sorry. [laughter] >> so good morning chairman march sin, senator sanders, thank you so much for inviting me to discus this morning how the department of labor is working to ensure the americans have a safe retirement. i'm phyllis borzi, the assistant secretary of labor for the social security benefit security administration. as you know, ebsa is responsible

for title one of arisa. we oversee about 708,000 private sec plans, 2.6 million health plans, similar number of other kinds of welfare benefit plans. and these plans provide benefits to approximately $150 million americans along with social security and individual savings provide workers and their families with income during their retirement. as you said both senators, many americans are working -- worried today they may not have saved enough. with fewer employers offering to find benefit and offering in 401(k) type plans the risk of preparing and investing for retirement have shifted on the shoulders of the american workers. in the administration 2011 budget and the department regulatory agenda, initiatives are included to improve the

transparency and adequacy of these 401(k) type plans which workers are relying on more and more. we're also working to preserve define benefit plans which provides workers with a study stream of income and retirement. one the departments highest priorities has been to improve the transparency of 401(k) fees to help workers and planned sponsors make sure they are getting the services at a fair price. senator harkin, in particular, i want to thank you for your long leadership in this area. we're in the final stages of a rule that will ensure that workers have access to the information that they need to make informed investment decisions. for the first time, participates will receive core investment information in a format that enables them to easily compare fees and performance of the investment options. we've published the interim rule that will help plan fiduciariys.

this will help them to assess the responsibleness as well as whether potential conflict of interest resists with respect to investment services. we believe this rule will benefit small and medium sized employers who lack the leverage to obtain the information from the service providers. we are also taking steps to make sure that unbiased unvestment advise is more accessible. through the unbiased investment advise, we can help them avoid common investment mistakes, while also provides strong protections against recommendations about investments tainted by conflicts of interest. not only do we need to support american saving for retirement, we also need to make sure that good options are available for them for managing their savings

to last a lifetime. the department is exploring proposals that promote the availability of lifetime income streams for workers who want access to these products. we also want to improve plan reporting reliability. the arisa required annual financial report and plan audit perform a critical function in ensures that plan assets exist and are fairly valued. and that participant accounts reflect the benefits. unfortunately, many of the annual reports that are fired contain substandard audit reports prepared by auditors with little or no benefit experience. the department is seeking legislative collection to allow the secretary to define standards for plan auditors as well as to provide accountability for accountants and others responsible for the integrity of the annual financial report. we also vote significant enforcement resources to protect

workers employee benefit plans. for fiscal year 2009, our enforcement program achieved monetary results of 1.3 billion and closed 287 criminal cases. epsa's criminal investigation led to the indictment of 115 individuals and guilty pleas or convictions of 121. lastly, the department believes it's important that workers have access to information and education. they need to make sound decisions for retirement. to that end, ebsa has established a dedicated saving matters retirement savings education campaign. this campaign uses publications, online tools, videos, public service announcements, and outreach to provide information to workers and employers. the campaign helps workers understand the importance of

savings and the rights in arisa. most of the material are available in english and spanish. it will help provides the tools that workers need to retire in confidence. so thank you again for this opportunity to testify at this important hearing. private sector retirement plans together with social security and individual savings are important components of assuring a defined dignified retirement. but more clearly needs to be done to strengthen the private sector retirement system. chairman harkin, i know that your committee is starting this process of thinking about how the goals can best be met over the long term. we look toward to working with you and the other members of the committee to achieve this goal. thank you so much. >> ms. borzi, thank you for your leadership on this issue. and the department of labor under secretary solis. i know you are looking at this,

and i want to cover two rules. first of all, on the transparency issue, 401(k) fee disclosures. it's been a top priority for me and sanders will be long time involved in making sure that people know exactly what they are getting into on the fees. you've pointed out in your testimony -- in your written testimony as a footnote just what the differences can be, and small percentage changes in the fees. i'll read what you have here. a difference of just one percentage point, 1.5 compared as compared to .5%. the average person, .5, 1.5, no big deal. especially if the 1.5 may have a couple of nice little orangements -- ornaments on it. i'll take that. it's not a big of a difference. 1.5% over 35 years dramatically affects overall returns.

if a worker with a 401(k) account balance of $25,000 averages a 7% return, the worker will have $227,000 at retirement with the lower fee. $163,000 with the higher fee. no other thing. everything else remains static. now i hope and trust that we are soon going to have mandatory regulation rules that say that any fee has to disclose this. >> absolutely. >> upfront. so that a person will know whatever plan they pick, how it compares to the other plans. >> absolutely. the participant disclosure regulation that alluded to in my testimony which will be out very shortly is in the form of a chart. so participants can look along the line and compare every single one of their investment options that are offered to them on fees and expenses.

you are absolutely right, mr. chairman, most people don't understand the impact that fees have on the return. they look at a return. that's pretty good. they don't understand the return can be dramatically reduced once the fees are subtracted. in a defined benefit plan, the fees are paid by the employers. in a contribution plan and 401(k) plan, they are passed through to individuals. it makes a dramatic difference in the bottom line. >> the other thing that i wanted to cover with you, i've become more aware over the last couple of years, especially in the downturn of the economy, how much people are borrowing on the 401(k)s? and the more i've looked into it, they are depleting it. taking the loans or withdraws. do you have any sense of how much people are borrowing? then as i said, they borrow, and

if they don't pay it back within a certain period of time, they get penalized. it seems to me this is growing. this is a growing concern. but i don't have a handle on exactly how many people are borrowing. and not paying their loans back. >> yeah, you know, i don't know those numbers off of the top of my head, mr. chairman. we'll be happy to look into them and try to get you the numbers. i share your concern, i never thought -- i worked on the house side as a congressional staffer for 16 years. when this provision that allowed loans from 401(k) plans was being considered, certainly the members of the labor committee that i worked for were very, very concerned about it. the provision was put in because the argument on the other side is people wouldn't save in a 401(k) plan unless they knew they had access to the money. but that really illustrates the difficulty that we have in

401(k) plans. they are not really structured to be retirement plans. senator sanders, you alluded to that. they are savings plans. that's a good function. we need to have people save. but people can get their money prior to retirement and all that does is reduce their ultimate retirement security. so i'll be happy to try to get those numbers for you, mr. chairman. >> human nature being what it is. health expenses or something happens to the family, downturn of the economy, you lose your job. yeah, i'll borrow the money now. you do, like i said, they get penalized. i don't know exactly what the penalties are if they don't pay it back in time. and -- but i need to get a better handle on how much this is and how big it's growing. all right? >> we'll try to get those numbers for you, mr. chairman. >> i appreciate that, thank you, mr. borzi. mr. chairman. >> thank you very much.

ms. borzi, you said 20% of workers say that have no savings or less than $1,000, 54% the total value is less than $25,000. that's what you say. i want you to speculate with me for a moment. if we were to raise the retirement age in social security to 70, and you were living in an economic period right now, and you had somebody who was out building roads in the state of vermont, or that is his job. he's a construction worker. what happens first of all, how much employers are going to hire a 68-year-old construction worker as opposed to a 25-year-old construction worker? and second of all, second of all, if that construction worker or if that nurse, or anyone else

who's 68 or 69 years old, waiting for social security is unable to get social security, what happens to that person who has virtually no savings right now? is 68, 69, has a number of health problems and can't get social security. how are they going to survive? >> i wish i could give you a good answer. i know that there are many, many hundreds of thousands if not millions of americans that are exactly in the situation that you are posing. the question about older workers in the work force is one the issues that i did work on when i was in the private sector. because age discrimination issues were one the sets of issues that i worked on. and it's very difficult. it's extremely difficult for older workers. it's not just the 68-year-old, it's people like one of my brothers who is in his early 50s.

>> absolutely. >> who can't get a job. >> i agree with you. but the idea that out there, leader of the republican party, and many others, no problem. 67, 68, go out. you know, go out and work on construction, be a carpenter, what world are they living? what world? and then if this person has no income coming in from social security, what happened to that person? you know, it is -- you know, it is an idea that i guess it's okay for wall street billionaires to come up with. but it's not real world. and it's something that must be opposed. i want to ask you another question. pete peterson who made billions of dollars on wall street has pledged to spend $1 billion on a campaign to cut social security and medicare, according to "forbes" magazine. among other things, he funded a movie entitled iousa.

it contains a bunch of worthless ious in the social security trust fund. just worthless ious. what do you think? >> well, senator, it's what i say to my -- the children of my friends who tell me that social security won't be there for them. and what i say is the one thing that i know and it doesn't have anything to do with the fact that i work for the obama administration or i formerly worked for the congress, the one thing that i know and believe in my heart that social security will always be there for people. and our task is to make sure that over the long run it remains there for everyone. >> isn't it true that these ious are backed up by the faith and credit of the united states government. >> is that true. >> if the united states government doesn't maintain that faith and credit, social security with the least of the problems. we'll be looking at an

international financial collapse. >> i think that's absolutely correct. >> all right. now i'm going to ask you a hard question. i know what your answer is going to be. but it's going to be a hard question as -- on april 16th, 2008, a gentleman running for president of the united states, i won't give you his name. he said and i quote what i have proposed that we raise the cap on the payroll tax. because right now millionaires and billionaires don't have to pay beyond what was then $97,000, today it's $106. the same gentleman who's name is not mentioned, but did win the election in 2008 continued. quote, now most firefighters and teachers they are not making over $100,000 a year. in fact, only 6% does. i said i'd look at exempting people slightly above that. the alternative like raising the retirement age or cutting

benefits or raising the payroll tax on everybody, including people making less than $97,000 a year, those are not good policy options. and it really was barack obama who said that, in case you didn't know that. what do you think? >> this is a hard question. >> i know. in other words, what the president said to me while the fact that social security is not in cries is, and can pay out every sick el owed, we want to make it stronger. even in years beyond that. what the president proposed during his campaign is to get rid of the cap, maybe start higher than $106,000. i think that makes sense. do you want to comment >> the only thing is if i were to comment, it would be well beyond my area of expertise. but i do think that over the years, as a citizen taxpayer

myself, i know other the years a lot of ideas has been mote -- have been floated. i think we ought to examine that one very carefully. >> thank you very much. mr. chairman. >> well, i can't help but remark on that. we often talk about the middle class in america. and i think we got a little confused as to who is the middle class in america? >> uh-huh. >> at $250,000, that's the top 2% in america. 98% of the american people make less than $250,000. $150,000, that's 5%. in other words, 95% of the american people who are out there working make less than $150,000 a year. i think we forgetten the people in the middle class are those that are making 35, 40, 55, 60,000, 65,000. that's the bulk of where

americans are today. and we forget about that. they are rightfully concerned about a lot of things. i think the fairness, senator sanders said the fairness of this. if you are an american making $40,000 a year, you pay on social security on your payroll tax on every dollar that you make. >> uh-huh. >> if you are a person making $400,000 a year, you only pay on social security on 25% of what you make. >> right. >> 1/4. where's the fairness in that? i can understand that the middle class in america is upset. i don't mean the people making $150,000. i mean the people making 40, 50, 65,000 a year. i can see why they are upset. so that's just -- i didn't mean to get into that. but you brought it up. so there you go. [laughter] >> it's just grossly unfair. but i have one other issue. that i just want to cover very

briefly. as you know the amount of money in iras, dwarfs the amount of money in the 401(k). >> absolutely. >> because frequently rollover their 401(k) when they leave the job or transfer. i'm concerned some employers maybe trying to cut cost by forcing people to do a rollover or service providers trying to earn a higher fee by encouraging rollovers. is the department looking at rollovers, and in particular, the communications to workers, employers, and service providers regarding rollovers? >> mr. chairman, we are looking at it. we have a legal problem though. in that once the money is rolled out of the arisa-covered plan, it's not quite clear to me how we can reach the money in the iras. but we certainly can look at all of the behavior around the rollover decision, the information people are given, making sure that it's accurate,

making sure that there aren't conflicts of interest associated with it, and so we are looking into this, yes. >> do you plan to take steps to implement the ig's recommendation? inspector generals recommendations? >> i'm sure we will be doing whatever we can to meet what the ig has sunlighted. >> well, again, disclosing any conflicts. >> exactly. exactly. this question of disclosure is really important. >> uh-huh. well, i really want to work with you in the department on the -- on this whole issue of -- of the rollovers into iras and how they are being promoted. and the fees that are being taken, and how people are being enticed to do that. >> uh-huh. >> that's one area. the other area is the whole area of borrowing. it seems to be growing. maybe even expotentially on this. i don't know. but we need some good data on

that and how many people are defaulting on the loans, unable to pay them back? >> we will get you whatever data we have, mr. chairman. >> i appreciate that very much. did we have any follow up questions? >> you said something that i have to comment on. we could go on all day here. just very briefly. as you know, ms. borzi, social security not only covers the elderly, but it also is a very important part of the lives of people in our country with disabilities. >> absolutely. what happens to the 8 million people currently receiving social security who have disabilities in the four and a half million widows and widowers and 4.3 million -- 4.3 million kids who are receiving social security if we make cuts in

social security? in other words, my point is there are a lot of -- as senator harkin has said to aptly, people who hurting all over the country. it is so easy for people up here, you know, who have whole lot of money, we got to cut the programs. what happens if you are a widow trying to raise two kids and you are sole increase is social security? what happens to you when you cut that? >> we need to protect those people. >> we sure do. thank you, ms. borzi. >> thank you, ms. borzi. we look forward to the information. we'll now move to panel two. panel two, we have three witnesses. the first will be mr. jack vanderhei, he's the research director at the employee research institute. he has more than 100 publications devoted to employee benefits and insurance. his major areas of research

focus on the private defined benefit and contribution defined plans. dr. vanderhei will give us statistics regarding savings. and then mr. ross eisenbray, president of the economic policy institute. prior to joining the economic policy institute, he worked as a staff director in the united states house of representatives, a committee counsel in the u.s. senate, and in the occupational health and safety administration. he will talk how the system is failing and the importance of social security. finally we will hear from shareen miller from virginia who will give us a first hand account in the challenges that workers face in trying to prepare for retirement. for all of you, your written statements will be made a part of the record. sum it up in five minutes. five or six or seven minutes.

i won't get too excited. once it starts going over seven, i'll get nervous. okay? somewhere in that range if you could sum it up to get into a nice exchange, i'd appreciate it. mr. vanderhei, i'd read your testimony. extremely insightful. please proceed. >> thank you. good morning, i'm jack vanderhei. it's a nonpartisan institute that's been conducting original research on retirement and health benefits for the past 23 years. we do not take policy positions and does not lobby. we will deal with the four topics. first, sponsorship in retirement plans. secondly, the national deficits. third, the importance of social security. and fourth, americans retirement confidence. first a quick look at the numbers will tell you where the nation is today when it comes to

american's participation in retirement plan. among all of the 154 million americans who worked in 2009, almost have, just over 49% worked for an employer or union that sponsored a pension retirement plan in almost 40% participated in a plan for full time, full year, wage and salary workers between 21 and 64, 54% of these workers participated in retirement plan. obviously, the likelihood of a worker participating in a retirement plan goes up sharply with employer size. for workers with fewer than 10, less than 14%. compared to 50 percent of those with 1,000 or more employees. looking at the more than 78 million who did not work for employees sponsoring a plan in 2009, 12% were self-employed. of the remaining, almost 10%

were under the age of 21, and 5% were age 65 or older. almost half, 48% were not full time workers, 28% had annual earnings of less than $10,000. and more than half, 57% worked for employees with less than 100 employees. what these numbers show is the structure reason why many americans do not have the retirement benefits, they don't work full time, they work at small firms, are they are very low income. measuring retirement income is extremely important complex topic. we provide the type of measurement in the late 1990s. when he modeled the baby boomers and gen xers in 2010, 40% were at risk for not have retirement income for basic retirement expenses plus uninsured income.

that's 11 to 12 percentage points lower than what we found in 2003. who's most at risk? shows not surprisingly lower income households are much more likely to be at risk for sufficient retirement income. the 2010 baseline at risk gradings range from 76% for the lower income households to only 20% of the highest income households. figure two in the testimony shows the average retirement income deficits by age, family status, and gender for baby boomers and gen xers. the average individual benefits is estimated to be approximately $48 per individual. if you were to eliminate social security benefits, that would increase to approximately $89,000. in aggregate terms, that will be an increase from 4.6 to 8.5

trillion. the importance is showing in the figure of the testimony 91% of the lower income households would be at risk of inadequate retirement income if they had no social security retirement benefits. and that's compared to 76% with the current social security benefits. perhaps surprisingly, the other three higher income core tiles also benefit from social security to the extent that 24 to 26% of households in those groups are saved from at risk status because of social security retirement benefits. not surprisingly, these trends have been clearly reflected in the annual retirement confidence survey for the last 20 years. only 16% of workers in the 2010 say they are very confident they will have enough money to live through the retirement years. moreover, those who say they are saving has not grown. the percentage of workers who

reported they and or their spouse had saved for retirement now stands at 69%. in addition to the lack of improvement, the percentage of workers who have no savings in the investments has increased. as you mention, providing this type of information, 54% report that the total value of the households savings and investments excluding the value of the primary home and any defined benefit plans is less than $25,000. the per pencety to guess or do their own may help explain why the workers say they need appears to be rather than low. 29% of workers say they need to save less than $250,000 for a comfortable retirement. another 17 mention a goal of between $250,000 and $500,000. thank you for the community to testify today. i welcome the opportunity to

work with the committee in the future. >> thank you very much, mr. vanderhei. now ross eisenbray. ross your statement will be made part of record. please proceed. >> thank you for inviting me. i'm ross eisenbray, president of the economic policy institute. we're a founding member of two groups, strengthen social security, and retirement usa that together represent over 50 million people who share a common view that strengthening retirement security requires strengthening social security. a goal that a higher retirement age would undermine. and the retirement usa just this month happens to be in the middle of wake up washington month to do exactly what you are doing and try to let policymakers and the american public realize better what a crisis we're actually in in retirement savings.

the three-legged stool supporting retirement income has actually always been wobbly for most americans. it's has one long sturdy leg which is social security, and two shorter less reliable legs, employer provided plans and personal savings. social security covers 97% of employees, and provides more than half of retirement income for 55% of seniors and a quarter of seniors get more than 95% of their income from social security. the second leg, personal savings, as you've just heard, is not very substantial. it's been shrinking has middle class incoming have been squeezed. the housing markets collapse has only added to those woes. they have never covered more than half of employees. never. but the quality has declined over the last 30 years with

traditional defined benefit pension plans disappearing and 401(k) plans replacing them. 401(k)s have not proved to be an adequate institute for the traditional pension plan or even for hybrid cash balance plans. the reasons are well known in phyllis borzi and you both have mentioned some of them. they don't provide lifetime benefits and retirees can outlive their assets. employees, rather than professionals, manage their own assets. they tend to be pretty badly. they take too much risk or too little risk, they fail to diversity, they put their investments in the employer stock, even after enron, and as you say, fees can decimate investment returns. loans and hardships withdrawals that you mention leak away assets. then, you know, the fundament fall issue that employers generally contribute only through a match for employees

contributions. and lower income employees, as you've heard, tend not to participate. so they don't get anything from their employer as a result. the tax incentives are completely upside down for their program. they are skewed to higher income, higher tax bracket employees who need savings help the least. as a result, 80% of the tax benefits for participating go to the top 20% of earners. just increasing the kind of income inequalities that you and senator sanders have been talking about. :

of this problem. it has had serious negative consequences. it's increased inequality and left operating families to shoulder more of their income from taxation without increasing of retirement savings between a 1 trillion or $2 trillion of the last 30 years. what have we got for that? its creation precipitated the loss of the traditional pension by providing an players a way to shift investment risk to employees as well as part of the cost of contributions pinker. but other congressional actions have harmed the benefit pension

plan. before 1986 -- some of these were well-intentioned and some of the i think were wise changes but they still lead to a declining pension plan. the pension plans for a hendee tax shelter for employers because earnings contributed to a plan on tax and employers routinely underfunded plans. but in 1986 congress put limits on over funding -- congress put limits on over funding as a way to cut the federal budget deficit and then made it harder for employers to recapture excess assets which they were doing by putting a large excise taxes. congress tightened the funding rules to make them pinch hardest and to do this again just a few years ago, to pinch hardest at the very times employers can least afford to afford their contributions during recessions and business downturns, whereas

the 401k plans are always funded at 100% by the contributions the employer makes and employers can actually cut back and spend their contributions unless they have a collective bargaining agreement. and that is the rules which were an important thing to make sure employees got a pension, made pensions more expensive. all these things and others, which i can talk about, contributed to the decline. the result, of course, is this huge shift where 40% used to have a defined benefit plan and now less than 20%. so, the -- as page four of my testimony, you will see with the center for retirement research predicts the share of americans at risk of being unable to maintain their living standards and retirement increases over time. each succeeding generation will

have less security going forward. generation x, god save them, 71% will be at risk of not having adequate retirement income. so my message is the one that you have already announced yourself. the most important thing i can say is cutting social security benefits in this context would be disastrous. it would be pulling the rug out from under millions of people each year of raising the retirement age is a 6.5% cut in benefits that are already very modest. the average retiree ury has only $14,000 a year in social security benefits, which is less than the minimum wage. the program's 75 year funding gap is less than 2% of payroll. it should be and can be closed with revenue increases from upper income earners. more and more of whose income is the skating taxation while the average worker, as you said, his

social security tax and 100% of his or her wages. polls show this is the solutions americans want to reach 83% of americans in eight rockefeller foundation poll said that they would like to see taxes raised on the upper income people who are not paying on their full share right now. a good policy happens to be good politics. thank you. >> thank you very much, ross. now we will turn to ms. miller. ms. miller averitt your testimony last night and it's very profound. please proceed to use chemical would like to thank chairman harkin and senator sanders and the rest of the committee for inviting me to speak today on this important issue. again, my name is sharine miller and i am the mother of two and grandmother of one. i live in a personal a care assistant in virginia and am a

member of local five. i started working when i was 17-years-old, you name it. i've done it. i've pumped gas, managed a convenient store, fixed pizza, worked in a nursing home. i am used to living hand to mouth doing what i have to do to pay the bills. like most americans, i am worried about my retirement. i've worked hard all my life and i have no pension. i've not been able to save enough money and social security alone won't be enough to sustain me to it as a personal care system by may $12 an hour. i receive no health care benefits, no retirement benefits, no sick time or vacation time. i care for a client, marissa come in her mid 20s with cyril paul sing. personal care isn't babysitting. my job includes beijing marissa, cookings become a feeding her, helping her interviews the bathroom, assisted her with

schoolwork for college and anything else she cannot do by herself. i would like to say i am her hands since she can't use her own. i love marissa. this is the most rewarding job i've ever had, but the services i provide she wouldn't be able to live a full and productive life. i cannot do personal-care forever. marissa can move herself in a power chair but i have to lift her into the bed, lift her into the bathtub and if we want to go somewhere i have to lift her into the car. becomes harder each year. i think about the day when i permanently damage my back or might knees to try and lift her. after all, how many of you could imagine your grandmother carrying a personnel around? my career options are not attractive as there are not a lot of open doors for 65-year-olds with a high school education. so i have no planned retirement

date, i will keep on working until my body gives out. so continuing working isn't an option what do i have to fall back on for retirement? $12 an hour doesn't leave much room for savings. my entire paycheck goes to pay my mortgage, keep electricity on, put gas in my car and buy groceries. i have approximately $28,000 left in a 401k from a previous job. and it's half of what was before the market crashed in 2008. i'm no expert in investing, but i do know that our retirement shouldn't be less to the ups and downs of wall street. thankfully, i know social security will be there for me. if i retire at the full retirement age i will receive at least $17,000 a year and will not be subject to the swings of the market. but still, not enough. i make approximately $35,000 a

year coming and i am barely making ends meet. and if there is an emergency, like necessary dental or car repairs i have to borrow from my 401k. i have no idea how i can live off $17,000 a year, and that is if my back colts up for another 20 years. at the retirement age reduced to 70 s some are proposing, i would lose another 5% of my pay if i chose to retire the current retirement rate. we need to ask to strengthen social security. cutting social security and raising the retirement age is not an option. but we need to do more. members of this committee and every lawmaker in washington means to commit to finding solutions that allow americans to spend a lifetime of hard work, driving their bodies to the limit to retire with dignity. to be able to pay their bills and spend time with their grandchildren. i hope we can meet this

challenge. thank you again for letting me share my story. >> thank you, ms. miller, for putting and concrete human terms. not disparaging experts who are here, they do incredibly important work, too, informing all cells to what is happening. i think too often we don't get down to the real people and what is happening out there. as i said, we keep talking about around here about tax breaks for 250 and above, or 1 million above, as that is the middle class america. you're the middle class of america. most americans are making what you make, 35, 40, 45, 50, $55,000 a year. that is the middle class of america and they are being squeezed like they've never been squeezed before. and on top of that, they are losing their retirement. so is it any surprise that the middle class of america is

pretty upset? it doesn't come as any surprise to me. but thank you very much for being here and telling us your story. and i have a couple questions for you, too. but i wanted to ask mr. vanderhei in the old days -- again, many people defined benefit pension through their employers. they didn't have to sign or choose which plan, it was just automatic. now retirement has gotten a lot more complicated. workers with a 401k need to do research, figure out how much they need to set aside for retirement. that's their own suites, their own decision. my figures are wife been informed is less than half of the workers actually do the calculation about one-third are getting professional what vice. you know in your written testimony when workers understand how much the need for a secure retirement the generally increase their savings. in that regard, they're have been proposals among senator

bingaman to require a 401k account balance to show a participant's projected income screen an retirement, not just the account balance. do you think of giving workers the kind of information would, number one, encourage retirement savings, and what if that were paired with an estimate of how much a person would need in retirement? in other words, here's how much he would need in retirement and here's what your income stream what b. do you think that might encourage people may be to set aside a little bit more if they were able to? >> senator harkin, that is an excellent question and i'm afraid my answer is going to be more complicated and simply yes or no, if you don't mind. this is something we studied for many, many years. we have a 2006 briefed just trying to estimate what people actually do need to have a comfortable retirement. the problem i would see of trying to do something as just a

boilerplate regulation or legislation is that there are so many complications in trying to figure out what is an adequate retirement target. it depends on whether or not you have any sort of annuity, it depends whether you have any sort of long-term care, it depends on the number of different things, and just to quickly emphasize one thing is you can do all the simulation model you want and cannot here is the average value. you have to keep in mind if you shoot for target's based on averages you are in essence telling people one chance out to your not going to have sufficient money either because you live too long or because you have catastrophic health care costs or what have you. so if someone were trying to approach something like that, my professional opinion will be you can't just have a number.

you absolutely have to have a range of numbers to try to guide them along to their particular comfort level, and you have to reflect their particular characteristics. i personally think it might be a bit misleading, more than a bit misleading to just come out with any rule of thumb and try to apply across the board. >> that's really hard for people, for the average person to sift through all those numbers and say here's what i need. look, i have a law degree, my wife has a degree. we make a lot of money, we are in the upper ranges they're so if we want to think about our retirement and went to the retirement counselor and she gave us all these things i don't even understand it. i said well, what do you think? what do you think is best for us? okay, fine, we will do that.

i've got to believe that most people do. they can't understand all this. the average worker out there, so they tend to take what ever is presented to them, suggested to them so how do you get in a form the to understand if you don't have here is what your income stream could be and here's how much you need. based upon where you are now, assuming if you're disabled now here's what you need, if you're not disabled, if you don't become disabled here's what you need to project what you need and here is your income stream and people have a pretty good idea of that, wouldn't they? >> if one were to simplify the target, to a place where one could you read the comparisons between the projected annuity value coming from the defined contribution plan, plus the social security, plus the additional savings, plus the had a defined benefit or cash

balance situation and combine the information together, again, one could come up with a politically easy comparison. my extreme caution would be if you are going to be felt that target based on nothing but the average life expectancy, average investment experience, average health care cost and retirement, you are in essence doing them to a 50% chance of running out of money in retirement. so if you're going to proceed down that road, one needs to be conservative and those assumptions. one needs to realize life expectancy is coming to be relevant only for 50% of the population. one needs to get a target that they will be able to focus on and have some degree of certainty that the would be sufficient for them.

>> all i am trying to get a better handle on this and also this whole shift to the 401k, but the other thing i want to ask you is -- well, i will offer that later because i want to ask -- my time is out. i have a lot of questions for ross and ms. miller but i will turn to senator sanders and we will go back and forth. >> thank you, mr. chairman, and all of you for your excellent testimony. mr. eisenbrey, let me briefly run through some economic history the last couple of years. a couple of years ago, as a result of the greed and eletes behavior on wall street plunged into a horrendous recession, congress and its wisdom gets my vote decided to bail out wall street to the tune of 700 billion. number two, despite the growing income and wealth inequality in

america what we have done in recent years is lower taxes for the very rich or often comments that one of the richest people of the world today and effective tax rate lower than the secretary, and right now we have some of the work colleagues who want to give $700 billion in tax breaks for the top 2% and want to repeal the estate tax which would provide a billion dollars of tax breaks to the top 3%, and now in the midst of all of that, we have folks like pete peterson of the peterson foundation. you say in your remarks, and i quote, the peterson condition of some of the most well-off experts have managed to convince most of the media and many washington policymakers that the way to save social security benefits is to cut them, and of quote. what you want to comment on the billionaire who made his money

in wall street now suggesting spending the huge sum of money to convince the american people that the way to save social security is to cut benefits? yes, there's so much to say about that. and so little time. the average person, the secretary, warren buffett's secretary if she's making a good income might be paying 35% on her salary, whereas someone like pete peterson with hundreds of millions, billions of dollars in capital investment is paying 15% on his capital gains in the dividend, and one confronted with a possibility of holding the deficit by supporting the carried interest ending a carried interest exemption which taxes private equity managers at a capital gains rate instead of

at ordinary income rate chose to oppose the repeal of that exemption, so his concern about the federal deficit is very narrow and it seems to be focused on people who have very little and what they can contribute to closing the deficit. as i think you said earlier social security does not contribute to the deficit. the law prohibits social security from the borrowing. so if we did nothing and the trust fund actually were depleted as predicted in 2037 or 2039, it would even then not contribute to the deficit. the benefits would be -- >> let me ask you this, why are our good friends on wall street so entrusted with social security privatized or dismantled? >> it's always opposed social security since inception and part of it is if there weren't

social security people would have to save through a 401k like instruments which give them the defeat. it's a business with for them and they would like to see their trees expanded. >> ms. miller. thank you for being here today and literalists senator harkin indicated, you are speaking from your experience is the experience of millions of people who sadly enough don't have their experiences really reflected here on capitol hill. there are those who as i think you heard suggested he should be working to the age of 70 and many of those guys sit behind a desk and make lots of money. they think it's a great idea to work until the age of 70 and that people involved in construction, people who are on their feet every day doing physically demanding work as you are should work the age of 70. what do you think? >> well, i will work until 70

because i have to, if my body doesn't give out on will be fine. but that is a hope. i'm lifting a 100-pound person in and out of bathtubs. it's very hard work. they can work until they're 70 because they are behind a desk as you said. they are not doing physical labor. if i were sitting behind a desk i would have no problem working until i'm 80 as my mother-in-law is 80 -- >> to be one of the youngest members. [laughter] >> that would be great because my grandson would have somebody to be proud of. but like my grandmother -- mother-in-law is 80 and i wish when i turn 80i want to be as sound mind and body as she is. she is very lucky and if i continue working like this, i will never make it to 70. >> let me ask you this, let's just assume one is 60-years-old

doing your type of work. the trick of the matter is many employers would prefer somebody who's 25 years of age to work for lower wage, right? mabey have more strength. what happens if you are 68 and somebody says i'm sorry i can't hear you any more? will there be a lot of good job opportunities for 60-year-old? >> there's not even good opportunities for her 43-year-old like myself. i mean, when i came into the job market after ten years on the job in the construction field, i was a bookkeeper making good money. i felt i was high on the hog in making over double what i am making now. but i went to find a job and i was certainly still likened to bookkeeping and all that to it i couldn't find a job, that's what they wanted. they wanted a younger kids and i was in my forties already. >> they want younger people in physical demanding jobs, younger people are stronger. also in other types of work younger people are going to work for low wages.

so i'm not sure, mr. chairman, what the world people were laughing when they think they, 60, 69, you can get a job you don't need social security. it's really quite incomprehensible to me. thank you very much. >> thank you. >> just to follow-up on that i was reading of mr. eisenbrey's testimony, and on page six he said that yet the peterson condition and other orloff experts have committed to any of the media and policymakers of the way to save the benefits. despite what we have heard from your former colleague, alan simpson, the average social to the recipient isn't living in a gated community. i think that is to put your finger on it. i like alan simpson, he's a fine man, but i know a lot of retired senators who fled here either d.c. door voluntarily retired

and that is who they associate with, people who live in the gated communities, the upper income, they are upper income. they are not associating with ms. miller and the families that make 40, 50, $60,000 a year. they are associating with people like us making 200,000 or more per year. that's to the associate with. i know of all these people the congo in miami and someplace else up north for the summer and they have a deed to the community. that is alan simpson is thinking about. but that isn't the most of americans out there. that is just a thin veneer of the top. the average benefit as you pointed out is about $14,000 i doubt anybody on that is to be living in a gated community so again we have to get back to who we are talking about here, who

are we talking about. mr. eisenbrey, you said also -- we are already weakening the system some prison of the cuts taking into account the increase in the normal retirement age from 65 to 67 which we are doing right now. based upon the 1982 or 81 -- 83 bill as well as medicare deductions and income tax benefits the replacement rate for the average earner retiring at 65 is already scheduled to drop from 49% to 28% in two decades. so the replacement rate of 65 is 59. you sit by raising the average age to 67 the replacement will drop to 28. what will it dropped to if you raise it to 70? do you know, or mr. vanderhei, either of you know that?

>> it's another 30% camano, to 70 is a 19.5% additional cuts in benefits. so, -- i can't -- all i will give you the calculation of what i would do the average replacement rate, but you can see that it's a substantial. each year you raise the retirement age is an additional 6.5% cut in benefits. >> so i would say just offhand taking out loud, 39 to 20%, even% if he went to 70 from 67, that's three more years rather than two years you've got to have a replacement rate down in the teens i would think. mr. vanderhei, am i off on that? >> it would certainly be the hygiene's. i'm just -- >> it would be somewhere less than 20%. so we would have gone from 39

replacement rate to somewhere down in the team's. now for someone who has been in the upper income bracket, not a big deal, you can of this or that. ms. miller, how does someone who's earning 35, 40, $45,000 a year, how do the of this or that replace millrace? the standard of living is really going to fall. is that right, mr. eisenbrey? >> that's right, and i think the figures that mr. vanderhei gave on how close people are to poverty, this would push millions of people into poverty. we have done a fairly good job as a nation of taking care of elderly poverty. used to be very high before social security does the benefits are cut there's no question more and more people will be pushed into dire

circumstances. >> both you and dr. vanderhei talked about the decline of the benefit plan system, the rise of 401(k)s. here's a book i read i keep referring to people the great risk shift by jacob hacker and there's a whole section about this in this issue about going from defined benefit plans to the defined contribution plans. but what i can't seem to get my hands on is this when did this take place and why? why don't more employers want to offer defined benefit pension plans any more? when did this take place and why? mr. vanderhei and then mr. eisenbrey, give me some context here. >> i would say you have to go all the way back to 1974 with the enactment of erisa to get the full story and keep in mind that in november of 1981, proposed regulations were

released that allowed the 401k plan to basically develop the way they have. you had many things have been since 1974, which have made defined benefit plans less and less attractive for employers do to certain constraints on funding flexibility. and one of the problems that have been in the mid-1980s was because of the deficits there was a problem when they were trying to deal with pbgc problems there was a huge funding for pbgc and they wanted to make sure were underfunded defined benefit plans would be increasing their minimum funding standards. the problem is if the minimum funding standards go up for that portion of the defined benefit population that means more contributions, more tax deductions, more revenue losses, so the decision was made the 86

or 87 had to counter the revenue loss for increasing minimum funding standards for the underfunded plans there would be a temporary holiday deductible contribution for overfunded plans roughly defined as any plan that had more than 50% more assets than the needed to cover their liabilities. i do believe the fault was you gift plans a holiday of one, two, three, five, seven years and with the funding ratio came back down to 150% eventually the employers would start making their deductible contributions to the overfunded defined benefit plans. if you talked to many pension consultants when the day finally came when the pension holiday window had evaporated, surprise, employers have found other things to do with the money they were making as far as contributions of the defined benefit plan.

they had rethought from the chart perspective from strategy perspective put there or not they really wanted to continue to pre-fund defined benefit plans to that extent. the problem is, and i would also of the initial modeling of the pbgc we knew that sooner or later you would get the perfect storm which we ran into when the discount rates go down extremely low historical lows you saw what happened in the stock market, you saw what happened with respect to bankruptcy and basically when all these things happen together and the ability to refund for those days was severely constrained that you now have a number of people who used to think sponsoring defined benefit plans made sense in the financial situation where the volatility of what the absolute minimum contribution you have to make every year to keep the tax qualified can jump around severely. now there was a lot of attempts to deal with this in 2006 and

some of these are still being worked out. but to be perfectly honest with you i think the volatility in the cash contributions and also in the way these things are accounted for has scared away a large number of employers and if they didn't just out right to terminate the plan, the thing they have been doing and i'm sure you are well aware is the has been freezing the echols certainly for new employees and maybe in some places also just the employees. >> is a pretty good run down. you have anything to add to that? >> i think that's all true and there are many other causes. the decline of unions as you know are much more likely to have a defined unionized work force is likely to have the defined benefit pension plan. there was a huge wave of terminations in the 80's during the merger and acquisition when

employers leveraged buyout corporate rate could seize another company's pension plan and to get over in a hostile takeover and rated the plan that went on for a long time before congress intervened to stop at. bankruptcy law allows employers to terminate the pension plans even when they have a collective bargaining agreement that's a contribution. this terrible industrial decline, manufacturing companies were the most likely to have pension plans in the steel industry lost its plans. right now the auto industry as a part of the bailout agreed to put into place employees defined

contribution plans existing the older employees have their plans. the deregulation and the late 70's of transportation industry was a huge contributor because allowed startup companies without legacy costs to compete against the older carriers who had these obligations and they could be low-cost competitors. and finally, when health benefit promises were forced on to balance sheets where things didn't have to report them as liability in the past, but when those rules changed and companies suddenly had to report these huge retiree benefit obligations that was one of the things employers realized they had to do with their money and it made them want to take money

out of their pension plan and put it into the retiree obligations. so there are just a host of causes. >> senator sanders. >> mr. chairman we are not going to go into great length on this issue but i hope at some point we can discuss the growing income inequality and what that means not only from the moral sense but an economic sense as well. mr. eisenbrey, you write in your statement that 55% of all income games over the last 30 years have gone to the top 1% ha. 55% of all gains over the last 30 years have gone from the top 1% while the bottom 90% have only received 16%, on e the people on top become much wealthier, middle class collapses.

now we can talk about that from a moral point of view, economic point of view, but let's talk about it a little bit from a social security point of view. how has the growing income inequality in the country impacted the solvency on social security? mr. eisenbrey? >> simply as more and more income has shifted to higher-income people, and, above the cap, of of the taxable wage means social security is getting its smaller and smaller share of gdp, and i think going forward the trustees suggest social security actuary says if we just returned to where we were in 1983 and tax 90% of in come right now we are at about 84% i think of income that's being

taxed. if we return when for for word we would have about one-third of the gap for social security funding so this is an enormous problem, and that would be going forward, but we have lost in the past 20 years or so we have lost a lot of money that should be raised on that tremendous income growth of very wealthy people. >> that takes us to another point that you make in your statement. you said, quote, most americans don't realize someone with a salary of 300,000 or 30 million a year pays no more in social security taxes than someone earning roughly $107,000. what is the implication of that towards making sure social security is solvent for the next 75 years?

what do you suggest we might want to do about that? >> am i institute, the economic policy institute recommends we take the cap off entirely for employers so that high income people, the way we do now for medicare that people pay, the employer pays the tax on the entire income, the entire year's salary gets paid to high income people, and that on the employee side that we raise the cap, we don't take it off entirely but we raise the cap perhaps to restore it to the level that it was in 1983 where 90% of income would be captured, and that by itself would merely close more than three-quarters of the entire remaining gap in social security funding for the next 75 years. >> so in other words fairly modest changes social security would be solvent for perhaps the

next 70 or 75 years. >> that's right. >> okay i have to understand this. if we return to 1983 and tax, he would close about one-third of the gap. and i just heard you say something about closing 75% of the gap. >> i'm proposing something more radical that americans can spend just returning to where we were in 1983. at that point we did not tax -- employers were not required to pay the tax on the entire salary they pay to an employee he. notes that 106,000. i'm suggesting employers pay on the entire year's salary. >> but the employees doesn't match that, the only piece of to a certain -- speed the employee would only contribute 90.2% to

140,000. i'm not sure what the calculation would be, but it would be a higher figure than it is. >> social security has always been predicated on equal employ your employee, right? contributions. >> the tax rate would be 6.2% would be the same for employers, but i'm suggesting they should pay more. >> how would that affect cells employees? >> they would have to pay more, too. >> mr. chairman, if i can get back to mr. eisenbrey. mr. eisenbrey, in your testimony you say that 45% of older workers last year were employed in physically demanding jobs or jobs with a difficult working conditions, and of quote. how difficult would it be for these workers to work until they are 70 years of age? isn't it a little bit of serve to be suggesting people are doing physically demanding work, would they have jobs when they are 60, would anybody hundred

them, and second of all, what happens to them in terms of their health if they are working to 69? >> you talked about some of these jobs where it is almost inconceivable that somebody -- of large numbers of people, construction workers, carpenters, ironworkers and so forth, it's very hard to think of them working that long, but there are other jobs like cashiers standing on her feet all day long for 40 years and now we are saying for another x number of years people are not retiring at full retirement age. they do tend to retire earlier already because of health concerns. if we raise the retirement age even further it doesn't mean that they will be able to work any longer it just means their income will be reduced by the early retirement penalty that much more.

>> thanks, mr. chairman. >> mr. vanderhei, there is one issue that i would like to delve into a little bit more. we have all learned collective bargaining is one of the most effective means for workers to negotiate for better pay and benefits. if you have any data that would tell us what percentage of unionized workers have access to employ year provided retirement plans both defined contribution and defined benefit plans and how does that compare to workers that don't have help from a union, you have any data on that? >> i don't have it with me. i can look as soon as i get back to the office and get back to. >> but you might have access to that kind of information? >> there are collectively bargained codes in a very old 55 series that i might be able to put back together in a way that is going to be useful for you. >> i would like to know what percentage of unionized workers

have access to the employer provided plans with defined contribution and defined benefits, compared to workers that don't have -- that are not involved in collective bargaining. >> correct. >> again, mr. eisenbrey, again, we talked about savings. but as ms. miller says, $12 an hour it's pretty hard to save. family, kids, housing, fuel, food, everything else. so, when you talk about saving more, people should save more, what is the effect on the economy as a whole because of the low savings rate? we have a low savings rate in this country. what is the effect on the economy, and how would you help

people in that 35, 40, 45, 50, $60,000 to save more? what is the effect on the economy of a lower savings rate, and if we think proceedings is a good thing, how do we promote more savings among that group of income earners? >> you know, high rate of national savings is generally a good thing. it leads to greater investment. the money is saved and put to productive use by industry -- and i think this is a curious time because we actually don't need a lot savings this year and next. what we are lacking right now is that to the consumption, but generally speaking, it is a good thing. the build of the pension funds led to tremendous investment in

the economy. it isn't always of course invested in the united states, but that is a whole other problem. to help people save, i think somebody mentioned senator sanders i think mentioned human nature. it's hard to get people to save. it's hard to get people to think 40 years into the future and plan for their retirement. i think the best -- >> if i may it is especially hard to ask people to save when they can barely pay their bills today. people pay for their courage rebuilt you have to figure out how to fill the air gas tank to get to work and also have to say 40 years down the line. it's easy to talk about savings if you make enough money to safe. >> and the government recognizes how hard it is to get people to do that and it provides incentives. unfortunately the incentives are going to the people who need incentives the least. people for whom it is easiest to save so somebody who makes 25 or

$30,000 a year gets much less. even if they are paying income taxes and making a contribution of thousand dollars contribution to a retirement plan, the government is providing them less than a third what it provides the same $1,000 contribution by somebody that's making $200,000 a year and paying at a 35% tax rate. this is crazy. i would turn these completely upside down. i naturally in favor of the mandatory retirement system with subsidies from the federal government, and i've mentioned that in the guaranteed retirement account that theresa offered i think is an excellent way to solve this problem going forward. but shorter than that, others have suggested changing the tax deductibility of the 401k,

turning it into a tax credit, making it a refundable tax credit to the government is helping the people who need help the most to save, and not just helping wealthy people move their savings from a savings account to a tax savers savings account. >> mr. chairman, if i could just a detour a little bit here, and i won to get back to the social security because one of the arguments some people use is the american people are living longer. what's the problem? let me quote -- this is interesting it hasn't gotten the kind of attention that it deserves, but let me quote from a "washington post" article from september 22nd, 2008. quote, for the first time since the spanish influenza of 1918, life expectancy is falling for a significant number of american women and nearly 1,000 counties

that together are home to about 12% of the nation's women, life expectancy is now shorter than it was in the early 1980's, and of quote washington post. and mr. eisenbrey khator remark that over the past quarter century, life expectancy is at 65 has increased by one year for lower-income. 25 period, that isn't much of a game compared to five years for the upper income men. another words, being poor is kind of a deficit in some respects. >> it certainly isn't an planned to longevity. >> if you add all these things together it is saying to people who are working-class people were working really hard who are not seeing any significant

increase in life expectancy is if they are women they may see a decrease, guess what, you're going to have to work to 70 before you get your social security. what does that mean? >> it's true this is one of three think the most compelling to most people reasons to raise the retirement age that everyone is living wonder, therefore they will be in retirement longer, yet it -- get a bigger benefit. this is an across-the-board phenomenon, it isn't just in some counties i think the evidence there is a report i can supply to you by a researcher who has found lower income women and especially in the lowest income decile are living less on their longevity as decreasing,

so they are not benefiting from the overall situation of americans where most of us are living longer. >> if we raise the retirement age many of these women would never get a nickel from social security, they would be dead. >> if they make it to 62, they will be able to retire, but their benefit will be reduced that much more. they will be punished. >> but this is an important point we don't talk about enough. we always love everybody together. but what is peter saying the "washington post" indicates many lower-income women, the longevity life expectancy is declined and for the working-class and lower income meant the gains are minimal for the upper income for accessed the best health care. >> the other thing i would ask my staff we talk about life expectancy life expectancy starts at birds.

life expectancy has increased since 1900 because we have immunizations, vaccinations, these aren't doing at birth any longer so life expectancy is increased because public health. public health in america. but you in 1900 reached the age of 40, you live just about as long as if you reach the age of 40 today. a little bit longer, not very much, not like the life expectancy, so a lot of people say when we enacted social security but the retirement age of 65, life expectancy was only like 68. but today it's what, 70 something, so we should raise that up so it's comparable to what was in the 30's. that's missing the point. the life expectancy may have been that but if you are a working person if you made it to

age 30 or something like that, you could expect to live about as long as you live today. so it wasn't that people retiring and dining, it's just that people didn't live as long because the life expectancy because of childhood death. >> part of the phenomena that you mentioned is people are living longer and they're working years, their working life has been extended so the ratio work life to retirement life hasn't increased at the same rate as longevity after 65. >> so if you raise your retirement age actually when you are doing is going backwards from where we started in the 1930's. you're going backwards in terms of how many retirement years would be covered by social security. i submit that and now i can

prove it with data but i don't have in front of me. >> let me ask a question there's a lot of talk about doing some tax bills here and that kind of thing. a lot of talk about raising the state exception of $25 million per person, $10 million per couple and lowering the tax rate on that but how much would the benefit you? >> as you see my face it pretty much loses me pretty fast and i am still talking and i'm going to die yearly because i'm low-income. sorry. in layman's terms. >> in other words, you don't have $5 million in the bank or 10 million you are going to be leaving your kids, right?

for the record that was a laugh. >> my children make the same amount per hour i do and they -- with my children make $20 an hour. i get very confused when you talk about all these different numbers on taxes, and admittedly [inaudible] at the moment because i will never have that kind of money to leave my children because when the income goes down, when the stock market crashed in my last my last job i lost my life insurance policy, too commesso i don't know how i am ever going to leave than anything. if nothing i may be just a burden on my children. >> mr. chairman, ms. miller is an interesting point that we haven't really discussed. we talked about raising retirement age -- i know i am a little bit of a johnny one note,

that is the issue that's on my mind. i wonder if any of the panelists can comment on that. it would seem to me if you raise the retirement age, people were not getting social security, they might in fact be a burden as ms. miller said on their kids. i mean, we are already seeing that in today's society. wouldn't we expect perhaps more of that if we raise the retirement age? mr. vanderhei? >> i can't give an exact number on that, but basically that is something we try to get at in the testimony. we try to look at what would happen in essence if you eliminated social security benefits. we could very easily go back for you and instead of doing the the current status quo versus nothing, do these kind of comparisons for you and show you exactly the percentage of the population they would be at risk

and or not have any of their financial resources of that is how you want to define being a burden we could easily go back and simulate that for you. >> and i would appreciate that and like to see those statistics, but common sense might suggest you are already hard-pressed middle class might have more of a bird in trying to take care of parents who are not getting social security when they might need. common sense. >> absolutely. >> thank you very much. this is been very enlightening. this is the first hour hearing. we are going to have a whole set of hearings because i think the retirement system in america is putting a lot of people at risk. there is, as i hear there is a crisis out there in the retirement system and people have to know this and take action to shore it up. mr. vanderhei, you have some information you are going to get to us on the collective

bargaining balance, and mr. eisenbrey, you were going to give me some information on if you raise the retirement age to 70 with the replacement rate, how far -- mr. vanderhei, if you have that data, too what happened to that replacement, and ms. miller, all i can say is you are the face of america. you are the face of working america. >> so smile. >> middle america. and these are, if nothing else, it seems to me you and the many millions of americans out there who are making 20, 30, 40, 50, $60,000, we have got to shore of the retirement system for them. and the best retirement system and the most secure because it is backed by the full faith and credit of the united states

government. when young people ask me is social security going to be there when i retire i asked him a question let me ask you this, when you are my age will the united states of america exist? yeah they believe that. you're social security will exist because it is backed by the full faith and credit of the united states government. know whether retirement system concede that. >> mr. chairman, if i can just conclude my remarks by saying i think as we have heard this morning and as i think most americans know there has been a war going on many years against the middle class of this country and that is why the middle class is disappearing and these attacks on social security are part of that. the same method by wall street and some other special interests now apparently are extremely unhappy we have a federal program that has worked enormously successfully for the last 75 years and they want to destroy it and our job is to make sure they do not succeed in that.

thank you very much. thank you, panelists. >> thank you. the committee will stand adjourned. thank you all very much. [inaudible conversations] ..