Warning…warning!

When I was driving home this evening, I heard some scary news on the radio (HT Mark Levin.)  Could the Democrats on the House Committee on Education and Labor and the House Ways and Means Committees be seriously considering changing our 401(k) plans to a government-run plan?  Just what we need, Congress interfering again with the financial markets and our retirement!

This is what James Pethokoukis of the blog U.S. News - Capitol Commerce says:

“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.”

You can read the entire Pethokoukis blog here.

Here is some background.  On Oct 7, the House Committee on Education and Labor held a hearing entitled, “The Impact of the Financial Crisis on Workers’ Retirement Security.”  One of the people testifying was Teresa Ghilarducci, Professor of Economic Policy Analysis at the New School for Social Research Department of Economics in New York City.  She proposes that Congress let workers trade their 401(k) plans for a Guaranteed Retirement Account composed of U.S. government bonds that would earn a 3% return, adjusted for inflation.  You can read her testimony here.

Hmmm, a government-run retirement plan that promises us something in retirement.  A program we are forced to put money in.  Gee, where have we heard THAT before?  Social Security?  The very program Congress has stolen money from for years and is going broke?

It seems Ms. Ghilarducci stated in an interview with Workforce Week:

“I want to stop the federal subsidy of 401(k)s.  They can continue to exist, but they won’t have the benefit of the subsidy of the tax break…I want to spend our nation’s dollar for retirement security better.  Everybody would be covered if the plan were adopted.”

Excuse me…our nation’s dollar?  What do you mean OURS?  Do you mean mine?  My neighbor’s? My colleagues’?

According to the Workforce Week:

“House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.”

In addition, McDermott believes the Ghilarducci plan is intriguing and Miller is against continuing tax breaks for 401(k) plans as they currently exist.

Yikes.  Could it get worse?