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Would Obama, Dems Kill 401(k) Plans?

October 24, 2008

Shiver me timbers:

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.”

via Would Obama, Dems Kill 401(k) Plans? – Capital Commerce (usnews.com)

Click through for some “respectful observations”. What are these people thinking? (Via Insty) The difference between 3% and a historical 7% for the stock market is pretty staggering.

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2 Comments leave one →
  1. TImmy C permalink
    October 24, 2008 1:12 pm

    So the idea that Obama supports this is where?

    And at the end of the editorial it says: “Listen to superinvestor Buffett…”

    Sure: Barrack does listen to him, as Buffet is one of his closest advisers and strongest supporters.

  2. October 24, 2008 9:54 pm

    This isn’t about “returns”, its about keeping that cash under government control, where they can use it to offset deficits like what happened when congress raided all the various and sundry trust funds over the years.

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