The NYT article on the United Auto Workers' negotiations with GM, Ford, and Chrysler included a quote from a history professor, comparing the problem of paying for retiree health care benefits with the problem of Social Security: too few workers and too many retirees. Fire that professor. This is not the story with either. The problem with paying for health care is the explosion of health care costs over the last three decades. No one anticipated that health care costs could run $15,000 to $20,000 per year per retiree thirty years ago. That's the reason that there is no equivalent to the Pension Benefit Guarantee Corporation for health care benefits -- health care costs were not a big deal 35 years ago when the PBGC was established. We can cover the cost of an increase in the ratio of retirees to workers in both the auto industry and Social Security (we've been living with a rising ratio for 7 decades). We can't cover the cost of a broken health care system.
--Dean Baker
