Posted on 05/04/2010 7:43:39 AM PDT by ConjunctionJunction
In February, the White House released its “Annual Report on the Middle Class” containing new regulations favored by Big Labor including a bailout of critically underfunded union pension plans through “retirement security” options.
The radical solution most favored by Big Labor is the seizure of private 401(k) plans for government disbursement -- which lets them off the hook for their collapsing retirement scheme. And, of course, the Obama administration is eager to accommodate their buddies.
Vice President Joe Biden floated the idea, called “Guaranteed Retirement Accounts” (GRAs), in the February “Middle Class” report.
In conjunction with the report’s release, the Obama administration jointly issued through the Departments of Labor and Treasury a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options” in the form of a notice to the public of proposed issuance of rules and regulations. (pdf)
House Republican Leader John Boehner (Ohio) and a group of House Republicans are mounting an effort to fight back.
The American people have become painfully aware over the past year that elections sometimes have calamitous consequences. Republicans lack the votes (for now) to reign in the Obama administration’s myriad nationalization plans for everything from health care to the automobile industry.
Now the backdoor bulls-eye is on your 401(k) plan and the trillions of dollars the government would control through seizure, regulation and federal disbursement of mandatory retirement accounts.
Boehner and the group are sounding the alarm, warning bureaucrats to keep their hands off of America’s private retirement plans.
Just when you thought it was safe to come up for air after the government takeover of health care.
The entirety of the House GOP Savings Recovery Group letter outling the issue that was sent last night to the Labor and Treasury secretaries:
The Honorable Hilda L. Solis Secretary U.S. Department of Labor 200 Constitution Avenue, NW Washington, DC 20210
The Honorable Timothy Geithner Secretary U.S. Department of the Treasury 1500 Pennsylvania Avenue, NW Washington, DC 20210
Dear Secretaries Solis and Geithner:
As members of the Republican Savings Solutions Group, we write today to express our strong opposition to any proposal to eliminate or federalize private-sector defined contribution pension plans, such as 401(k)s, or impose burdensome new requirements upon the businesses, large and small, who choose to offer these plans to their employees.
In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts, (GRAs)” which would provide for protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” -- presumably at taxpayer expense. In the Report, the Vice President recommended “further study of these issues.”
The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary -- again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen. This despite data showing that 90 percent of households have a favorable opinion of the existing 401(k)/IRA system.
In light of these facts, we write today to express our opposition in the strongest terms to any effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or disfavor the private 401(k) system in favor of a government-run retirement security regime.
Similarly, and more recently, the Departments of Labor and Treasury have jointly issued a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options.” While we appreciate the Departments’ seeking guidance and information from all parties and stakeholders in advance of regulatory activity, we strongly urge that the Departments not proceed with any regulation in this area before they have carefully and thoroughly considered all of the information received.
More specifically, we urge that the Departments take no action to mandate that plan sponsors -- often, small businesses -- include a “lifetime income” or “annuitization” option if they choose to offer a 401(k) plan to their employees, or that beneficiaries take some or all of their retirement savings in such an option. Data shows that 70 percent of Americans oppose the concept of a mandated annuity or government payout of their 401(k) plan. On a more fundamental level, Congress should not be in the business of choosing “winners” and “losers” among retirement security stakeholders. Instead, we urge the Departments to make it easier for employers to include retirement income solutions in their savings plans and to help workers learn more about the value of their retirement savings as a source of retirement income. Finally, to the extent new mandates and bureaucratic red tape from Washington push small employers out of the business of offering these plans to their employees, we would submit such an effort weakens, rather than strengthens retirement security.
We appreciate your consideration of our views in these important matters and stand ready to work with you and the Administration to promote secure and adequate retirement savings for all Americans.
Sincerely,
House Republican Leader John Boehner (R-OH) Rep. John Kline (R-MN) Rep. Dave Camp (R-MI) Rep. Sam Johnson (R-TX) Rep. Dean Heller (R-NV) Rep. Brett Guthrie (R-KY) Rep. Michele Bachmann (R-MN) Rep. Pat Tiberi (R-OH) Rep. Bob Latta (R-OH) Rep. Erik Paulsen (R-MN) Rep. Lynn Jenkins (R-KS) Rep. Ed Royce (R-CA) Rep. Buck McKeon (R-CA)
In related news, there’s a big gun show in Ft Lauderdale next weekend....
In sum, because I have done without and contributed the maximum permitted by law into my 401K, I am screwed.
I have been using a Roth (post tax) contribution to my 401k, with my employer (who is really me) matching withing my 401K, for about $31K a year.
I wonder if I should cash out and just go stick it somewhere, taking the penalty, at least my Roth portion.
We already have a government-mandated retirement plan. It’s called Social Security, and it’s a Ponzi scheme that’s going broke.
They can have mine liquidated paid penalty and bought silver 2 years ago. Sittin fat.
And a long, long time FReeper!
If anyone touches my 401k, which represents a large portion of my life savings, I would be willing to take up arms against the government. This would be the act that puts me right over the edge!
People voted for this. 49% of Baby Boomers voted for Obama. 47% of seniors and tons of young people voted for him.
They are going to take healthcare from seniors and baby boomers then their money. Keep paying that cable & sat TV bill to enpower them. TV enpowers them and makes you a serf.
They aren’t smart in this Administration but surely some must know this isn’t going to work. On the other hand, it’s a nice thing to rally GOP before the election.
When did she quit flacking for Alan Keyes?
Good, let loose the dogs of war. For everyone that has skrimped and saved for retirement, allow this and fit yourself for a metal collar and leg irons.
I was born free and I will die that way.
I don’t think that will save you. Remember the Klintoons “retroactive” income tax? If you take your money out in an effort to try and save yourself, they will retroactively tax your a$$et$.........
I suspect there is a tremendous overlap in those who pay taxes and those who save for the future.
51% don’t pay taxes and will be happy to take your 401K.
see #12..........
BTTT
“Keep paying that cable & sat TV bill to enpower them. TV enpowers them and makes you a serf.”
Heard of this before, but sure would like to know more.
Possible option: http://www.n2news.com/fta.html
Great post, thanks.
Argentina did it.
Fastest way to see me in full armed revolt? Steal my retirement money.
You can ask any Teacher's Union educated third grader how it's done.
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