New Lame Duck Threat to Bailout Union Pensions

Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more "fairly" distribute taxpayer-funded pensions to everyone.

Sen. Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor and Pensions (HELP) Committee heard from hand-picked witnesses advocating the infamous "Guaranteed Retirement Account" (GRA) authored by Theresa Guilarducci.

(You can find the blistering interview with Guilarducci by radio talk show host Mark Levin in 2007 at the link).

In a nutshell, under the GRA system government would seize private 401(k) accounts, setting up an additional 5% mandatory payroll tax to dole out a "fair" pension to everyone using that confiscated money coupled with the mandated contributions. This would, of course, be a sister government ponzi scheme working in tandem with Social Security, the primary purpose being to give big government politicians additional taxpayer funds to raid to pay for their out-of-control spending.

This will never happen!

There is a reasonably good chance it will get attached to the tax bill in the lame duck session.

The article is a description of the events before the Senate Committee which do not reflect a bill.

There are several bills to do some variation of this scheme in House Ways and Means (where tax bills are required to originate). Jim McDermott from Washington, a senior (extreme Liberal) Dem on Ways and Means is pushing the proposal.

You could predict it would happen if they could all get their effort behind a single concept. They agree on "combining" private retirement accounts of all kinds with Social Security. How they treat the appropriated parties is not so clear but the general concept is a payout at normal retirement age with a fixed government guaranteed return (I have heard 3%) annunity payout--ending at death of the covered employee.

There was a carrot which was to take the plans at value in August of 2008 however the stock market has recovered a great deal of value in the interim and that carrot may not be so valuable.

It is tempting to assume you could wait until mid or late November to see what they can pass and if they do pass something like this, you terminate your plan and pay the price.

Problem is that if the people on the other side have decided not to permit current plan owners the opportunity to get out, there may be an effort to trap owners and hold them into a combination. The tactical objective of the Liberals on the other side will likely be to keep anyone from getting out.

I’ve always been suspicious of 401k plans because the Government will eventually take them. Could be 20-30 years from now, but eventually they will look at all of that money and they will confiscate it. Roth IRAs, too.

I think that is highly unlikely. They would just change or end the special tax treatment of the plans. It isn't necessary to confiscate the principle to fleece the sheeple.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.