The Democrat Party is plotting to take your 401k retirement plan, nationalize it and have the Social Security Administration administrate it.
US News.com reports:
I hate to use the "S" word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers' retirement accounts (Efharisto, Fausta's Blog). Now, even Uncle Sam isn't that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans.
House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."
The Democrats are complaining that the tax-deferred income people are depositing into their 401k retirement accounts is costing the government revenue. They are scheming to enact this plan to take control of your retirement savings.
We know how well the social security deductions (from our paychecks) is currently being used to pay current retirees with the balance going into the general fund to pay for current government programs. Do we want them to take our 401k monies and do the same?
The D.C Examiner has this opinion piece by Bret Jacobsen:
A mailer went out this week 500,000 retirees in swing states this week from the AFL-CIO warning that John McCain wants to “privatize” Social Security. Mysteriously absent will be any notice that organized labor and congressional Democrats held a hearing yesterday in San Francisco that could be a quiet step toward socializing your 401(k).
The hearing was pitched as a way to “ensure retirement security” in the face of financial crisis. But that’s not accurate. The event was part of a poorly disguised power-grab, exploiting panic over financial turmoil in the housing and credit markets.
All working Americans should be concerned about retirement proceedings under the watch of House Education and Labor Committee chairman Rep. George Miller, D-CA. According to recent reports, Miller and other Democrats are considering portions of a plan that would take away nearly $80 billion in tax incentives for 401(k) plans.
It’s possible the policy would force workers to pay an additional five percent of their paychecks into government-controlled accounts, from which they would earn only a three percent return. In other words, proponents of private Social Security accounts would see their grandest dreams, and worst nightmares, realized in one fell swoop.
Democratic leaders and their labor allies can kill two birds with one stone. First, they will effectively neuter private, defined-contribution plans, which have replaced union-controlled defined-benefit pension plans for millions of Americans (after all, why would workers lock money away if there were no tax incentive?). At the same time, they can force those resources into a bigger, bloated government bureaucracy.
While some may be surprised at the brazen attack on a pillar of retirement security, it is merely the natural extension of organized labor’s world vision, which says we are better off putting resources and decisions anywhere but in the domain of markets and individuals. It is simple socialism: Democrats hope to push more retirement resources under the purview of the government, and away from the people who actually created the wealth.
If Democrats indeed move ahead with the plan they are pondering, the bulk of a person’s nest egg could soon be scrambled in a government program earning less-than-market returns. Without this fresh injection of employees’ paychecks, Social Security solvency still remains in doubt and hardly seems a superior option over equity markets.
Meanwhile, if union officials have their way, more employees will be driven back to old-style defined-benefit pensions that have been crippling America’s employers and sometimes short-changing America’s employees.
Union pension funds covering private sector employees already controlled more than $800 billion in retirement assets as of 2005, according to figures compiled by Heritage Foundation scholar James Sherk.
The results are not always impressive. UPS, for one, was forced this year to escape the Teamsters’ “Central States” plan at great cost before just so it wouldn’t be on the hook for obligations of other employers that may be failing.
This is high-stakes, high-cynicism politics at its worst. Not only are politicians exploiting fears driven by a once-in-a-lifetime market meltdown, they are repeating the very same thinking that led to the current housing crisis. As Ronald Reagan said, “Government is not a solution to our problem, government is the problem.”
Yet, it is very likely that following yesterday’s San Francisco hearing, Democrats will push a “solution” that is about bigger government, bigger unions, and smaller economic growth. They may well succeed in enlarging the social safety net. But it will be just big enough to strangle our economy.
This is what we can expect if the Democrats increase their numbers in Congress to filibuster-proof levels with Barack Obama in the White House. This is definitely not change we need!
Rush Limbaugh discusses Democrats' 401k Nationalization Plan
UPDATE: Author of 401k seizure plan says intent to "spread the wealth."
No comments:
Post a Comment