Skip to comments.Mark Hemingway: Unions target your private retirement savings
Posted on 11/01/2010 8:40:42 AM PDT by Nachum
Will the government outlaw your 401(k) plan? It seems like an absurd possibility, yet earlier this month two Democratic senators, Sen. Tom Harkin, D-Iowa, and Sen. Bernie Sanders, I-Vt., held a hearing on Capitol Hill exploring the possibility of doing exactly that.
On Oct. 8, the two senators from the Health, Education, Labor and Pensions (HELP) Committee held a hearing on "Retirement (In)security in America." Among the proposals discussed was "Guaranteed Retirement Accounts," or GRAs.
The purpose of the GRA proposal is simple: To force Americans to stop putting their retirement savings money into private 401(k) accounts and send their money to the government instead.
GRAs would "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," according to a letter signed by House Minority Leader John Boehner and 12 other Republican representatives.
(Excerpt) Read more at washingtonexaminer.com ...
There are many mysteries in the universe. One of these deep mysteries is how a liberal fanatic like Tom Harkin keeps getting elected in Iowa.
A fine pre-election topic for Rush and Beck to explore today and tomorrow. Voters don’t take kindly to government wanting to get their greedy hands on our IRAs.
I have pondered that mystery myself. Previously I had wondered about Tom Dachele in S. Dakota but that problem has been solved. Perhaps Harkin’s time is near.
I can guarantee a couple of things happening if they try this crap. The politicos won't like any of them.
"I have another word for GRA, but you're not going to like it."
In the spirit of open gov’t, once the GOP retakes congress (& hopefully the senate too) they should let the Ds offer up these kooky, destructive ideas to a vote every year. It will serve as a reminder of why Ds shouldn’t be trusted with power.
He’s good for the corn farmers. And that all many in Iowa care about. This plus most of these people don’t know all the things he has done.
Jesse Jacka@@ has advocated something like this for years.
Won’t happen. It won’t get through the soon to be GOP House. If they try and rush this through as a lame duck issue, that still means Obama has to sign it - even if they can muster up 60 Senate votes. Obama doesn’t have the stones... not with what looks (right now anyway) like a tough re-election where he will want to convince people the Republicans are the real radicals.
Fallout 3 was a great game. New Vegas is pretty good too.
But this reminded me of a way we could easily end social security... simply offer to give a lump sum check to every living American equal to the amount they paid into social security in return for ending the program. Short term, the debt would skyrocket... but that would be a one time thing, and from then on we would of solved our deficit problem.
Of course all the idiot liberals would immediately run out and blow all the money on new rims for their car and plasma TV’s... but by the time they blew through the money and saw their mistake ... it would be too late :P
The welfare state would be over, a knife stuck through it's heart made of the greed that built it.
“Getting Raped Again” ?
Don't we already have something like this? I think we do. I think it's called Social Security and it's completely broke. Who are they fooling?
And where does Bernie Sanders get off being listed as an Independent. He's an open socialist.
I know many highly educated, reasonable and sane people who have unequivocally stated that they would commit violence if the government went after their life savings.
I’m talking physicians, etc...
They are playing with fire.
And there you have it. The impetus behind this idea is to use the 401(k) funds to bail out Social Security, because Democrats are fast approaching critical mass - they have to get the money to pay the baby boomers from somewhere. The whole “tax free money” is a nice myth, but in fact taxes are merely deferred on these funds.
The whole GRA pot would be raided by Demorats just like social security was - even Bernie Madoff didn’t have a scheme like this.
“I can guarantee a couple of things happening if they try this crap. The politicos won’t like any of them.”
One of which would be a change in hunting regulations to allow hunting democrats with dogs.
marxists hate it when hard working people set aside some money for the days when they won’t be able to work. marxists have their eyes on that money, and WANT IT. marxists want your hard earned savings to go to the lazy long-haired maggot infested slobs who vote democrat.
The whole GRA pot would be raided by Demorats just like social security was - even Bernie Madoff didnt have a scheme like this.
The only difference between what I’m reading about Harkin/Sanders idea and Bernie Madoff is that Madoff didn’t write the laws.
“simply offer to give a lump sum check to every living American equal to the amount they paid into social security in return for ending the program.”
I would agree to all I paid in plus 12% compound interest.
Two Words: Farm Subsidies
They can dream on!
Didn't Iowa vote for Obama?
You just described a TRUE Story that occurred in Chicago a 'few years' ago.
Woman's son (minor) was suspect in murder. Cops beat him up at Station. Mon sues city and 'wins' $1.7 Million from Chicago. (son never was charged with any crime)
About three years later: Broke, Completely Penniless.
Naturally none of this was 'her fault'. Evil Lawyer took 1/3 of money. She bought a 'nice house' in a Southern Suburb (that I'd never live in), bought new car, and put son in private school -- BINGO money all gone.
The Chicago Sun-Times did a sob story about 'poor, poor mom and good boy son'.
I just laughed
And they will try it..
It will be optional at first....
It's coming...I'll bet you.
What you wanna bet?
It would NOT surprise me to see some GOP rep’s sign on to this.....in the future.
They target my retirement savings, and my gun collection targets union leaders.
One small problem: the amount of money you actually paid into SS and the amount of money you would have had if you invested that money just in Treasury bonds during the same period are two vastly different numbers.
I've done quite a bit of calculation using real numbers and real Treasury bond rates since the 1970's. By the time I retire, I (and my employers) will have contributed a bit more than $300,000. But, if I calculate the current value using historical Treasury bond rates during my contribution period -- assuming investment of each year's contributions in the longest term bond at the average interest rate for that year -- I'd have about $1,000,000 at retirement.
You are probably saying: no, that money was spent. Yes, but it was spent in exchange for special Treasury bonds that only Social Security holds. That's the "trust fund". So, what if we were to simply convert the special bonds in the "trust fund" into real Treasury bonds, and give those to the people that have contributed? Even if you have already started receiving Social Security, the amount of the bond would be discounted by what you have collected.
Short term, the debt would skyrocket...
Actually, it wouldn't. The debt already exists. It's technically an "unfunded liability", and I don't think it is included in the official "US Public Debt" amount. But, it's a debt nonetheless.
but that would be a one time thing, and from then on we would of solved our deficit problem.
No, it wouldn't solve the "deficit" problem. The government is still spending more than it receives. But, it would solve Social Security actuarial problems.
The whole thing would be a trick basically. The republicans would vote for it, because they always wanted to end it to begin with, and most of the democrats would vote for it.. because they want that large check sent to them (even without the owed interest) so they can go blow it on some bling and a new car or something.
I think so. Especially once the drive-by media realizes it and points out they are getting a raw deal.
Another way to measure is the value of your Social Security benefits. The average benefit at the beginning of 2010 was $1,164. Plug that into this website:
An annuity that pays a lifetime income of $1,164 monthly, starting at age 65, would cost $186,048 (if there are no survivor benefits). Of course, survivor benefits would raise the value.
But, if you aren't yet 65, the value of those benefits will be lower at this moment. And, keep in mind that this is a fixed monthly payment, with no COLA (cost of living adjustment). I haven't found a place that will quote an annuity with a COLA, but it will cost more than the above amount, for the same (initial) monthly benefit.
The truth is that however you calculate the value (contributions, contributions + interest, present value of future benefits, or whatever), it will have to be adjusted by the size of the "trust fund".
Once the trust fund is depleted in 2040, there will be only enough Social Security tax income to pay about 75% of the benefits that current legislation provides. So, if it is going to be a "debt-neutral" event (i.e. the "trust fund" gets converted to individual Treasury bonds that add up to the same amount), the disbursements will have to be reduced according to what is available..... unless the government issues additional Treasury bonds.
all they would see was the potential for a check for 10s of thousands possibly hundreds of thousands arriving in the mail.
I agree that a lot of people would view it like that. But, the appeal will be lessened somewhat if the government decides that at least part of it is taxable, if you don't deposit it in an IRA. On the other hand, it could also be a significant taxable event for the federal government, and boost revenues for one year. :-)
Unfortunately, if the amounts were distributed in the form of checks with no restrictions, it would also be an extremely inflationary event. The resulting spending binge wouldn't just hurt the futures of the irresponsible spenders -- it would undermine the purchasing power of the financially-responsible savers.
One of the proposals being touted on Retirement USA's Web site is, you guessed it, GRAs. At the hearing, Eisbrey noted that Retirement USA had not specifically endorsed GRAs, but did "affirm that it meets all of the 12 principles the coalition set out as essential to deliver retirement income that is universal, secure, and adequate."
But why are unions pushing this?
The average union pension plan is only 62 percent funded, far below the point at which the government considers a pension plan "endangered."
Estimates suggest unions' multi-employer pension plans are underfunded by $165 billion and could be on the verge of collapse.
Union leaders see these "retirement security" ideas like GRAs as vehicles to a back-door pension bailout, where union leaders will no longer have to worry about the fact they've underfunded their rank and file members' pension plans. Just let Uncle Sucker take care of it.
Labor is the biggest source of campaign cash for Democrats (Retirement USA backers AFL-CIO and SEIU are spending $88 million this election), and Harkin also wants to pass "card check" -- the proposal to do away with secret ballots in workplace representation elections -- during post-election lame duck session.
Regardless, forcing everybody into a government retirement system that pays out equally to Americans who have scrimped and saved and to those in organized labor who have grossly mismanaged their pension plans seems almost too crazy to contemplate.
But unions are desperate, and Democrats are in hock to Big Labor in a big way. And the lame duck could be their last chance for a very long
Get these monsters out of our lives!!! Today's just the beginning .. there's much garbage removal ahead. Trust them not in the lame duck session!
Tom Harkin's office
731 Hart Senate Office Building
Washington, DC 20510
Phone: 202-224-3254Fax: 202-224-9369
Bernie "the Commie" Sanders
332 Dirksen Building
Washington D.C. 20510
Phone(202) 224-5141 Fax(202) 228-0776
If we don’t win today, this country’s very survival is at stake.