OBAMA’S PLAN TO NATIONALIZE YOUR RETIREMENT ACCOUNTS
NEW YORK â Two years ago,Â as WND reported, the Obama administration was proceeding with a novel way to finance trillion-dollar budget deficits by forcing IRA and 401(k) holders to buy Treasury bonds by mandating the placement of government-structured annuities in their retirement accounts.
Remarkably, those financial professionals specializing in private retirement savings and the U.S. citizens investing in private retirement plans now face the possibility the Obama administration and its allies on the political left will impose rules and regulations that effectively abolish the private retirement savings and investment markets.
Recent evidence suggests government officials continue to eye the multi-trillion dollar private retirement savings market, including IRAs and 401(k) plans, eyeing the opportunity to redistribute private retirement savings to less affluent Americans and to force the retirement savings out of the private market and into government-controlled programs investing in government-issued debt.
AnÂ Investment Company Institute study published this monthÂ found that U.S. retirement assets totaled $18.5 trillion at the end of the second quarter 2012, of which 3.5 trillion was in IRAs and $5.1 trillion was in 401(k) plans.
Since 2010, the U.S. Treasury Department and the Department of Labor have been holding combined hearings on various plans designed to introduce government-mandated retirement plans and investment options, including government annuities invested primarily in U.S. Treasury debt, into the private retirement savings market.
âThis hearing was set up to explore why Americans are not saving as much for their retirement as they could,âÂ explained National Seniors Council National Director Robert Crone, describing a recent Treasury-Labor hearing held in the Labor Departmentâs main auditorium.
âHowever it is clear that his is just the first step toward a government takeover. It feels like the beginning of the debate over health care and we all know how that ended up.â
With the issuance of theÂ White House 256-page Budget Proposal for Fiscal Year 2013, the Obama administration endorsed âAutomatic IRAs,â a plan introduced into Congress in 2010 by Sens. John Kerry, D-Mass, and Jeff Bingaman, D-N.M., in which private companies would be automatically enrolled into government-mandated IRAs, forcing those businesses to contribute on behalf of their employees a âdefault amountâ equal to 3 percent of an employees pay, unless an employee specifically opts out of the plan.
The FY 2013 Budget proposal notes that currently 78 million working Americans, roughly half of the work force, lack employer-based retirement plans.
According toÂ testimony given by David C. John of the Heritage Foundation to the House Committee on Ways and Means on April 17, most of the 78 million working Americans not participating in employer-based retirement plans are part-time employees of smaller businesses, women, members of minority groups or all three.
The remedy proposed on page 147 of theÂ FY 2012 Budget ProposalÂ is âa system of automatic work-place pensions that will expand access to tens of millions of workers who currently lack plansâ by providing their employees with a government-mandated âdirect deposit IRA account,â exempting only businesses with 10 or fewer employees and providing participating businesses with tax credits to compensate for the businesses implementing and administering the plans.
While the Automatic IRA would serve the purpose of extending private retirement plans to disadvantaged and generally poorer workers, the innovation would place additional costs upon employers. It would require employer contributions to the plans, even if tax credits fully complemented the businesses for implementing and administering them.
The Service Employee International Union, or SEIU, a key labor union ally of the Obama administration, has mounted an effort to create government-mandated worker retirement accounts as an entitlement program, with the possibility that a portion of all private retirement funds could be forced into U.S. Treasury debt.
Branding the programÂ âRetirement USA,âÂ the SEIU has joined with the AFL-CIO, the Economic Policy Institute, a Washington-based economic left-leaning think tank that receives substantial labor funding, and two other left-leaning interest groups, the Pension Rights Center and the National Committee to Preserve Social Security.