Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.
Benjamin Franklin

Democrats Have A New Plan: Privatize Social Security And Kill The 401K..

By: Pam On: Oct/23/08 - 27 Comments

Hey, where did we hear that before?  Based on those links, we know that the left thinks it’s a bad idea..Okay, but what if you nationalize the existing 401K accounts:

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

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.

A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.  :

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

Those tax breaks are an incentive for the employer to match the contibution of the employee, which is major benefit to employees that can not afford to put a lot into their accounts.

Ed:

That means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year.  In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution.  Instead, Uncle Sam would give you your “matching” funds ” up to a whopping $600 per year!  Whoopee!

As Michelle Obama says, you could buy a pair of earrings every year : except, of course, you can’t.  It’s in The Lockbox, defined by politicians as Locked Away from You but Accessible to Us.  It goes there along with 5% of your gross earnings, apparently to play with the 7% of your gross earnings that already goes to Social Security.  And what do they do with the money?  They give you government bonds as your only investment option.

Maybe you’ll be lucky, and they’ll have Franklin Raines running the agency issuing those bonds.

Via Q&O

I don’t ever want to hear another word about “greedy Wall Street”. Democrats in Congress have been trying to find a way to get at the huge pool of money for decades

Goldwater Girl:

Remember, this isn’t the first time this has come up (thanks for the reminder Neal) – taxing 401Ks was in the works in 1994, the Congressional elections of 1994 stopped it.

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Posts Related to this one:

Posted on: October 23, 2008 |

Posted in: Democrats, General Politics, National News, Presidential Election '08, Social Security

27 Responses to “Democrats Have A New Plan: Privatize Social Security And Kill The 401K..”

  1. Faultline USA
    October 23, 2008 - 11:32 AM on October 23rd, 2008

    …

    …

  2. Conservative Cat
    October 23, 2008 - 12:48 PM on October 23rd, 2008

    Oil Socialism Really Does Suck…

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  3. third world county » People of the Light?
    October 23, 2008 - 01:55 PM on October 23rd, 2008

    [...] attitude « Rosemary’s News and Ideas on Bob Doles Out a Slap Upside the Head to ScottDemocrats Have A New Plan: Privatize Social Security And Kill The 401K.. | Right Voices on I think that word DOES mean what you think it means…UN calls for the genocide of Israel [...]

  4. third world county
    October 23, 2008 - 01:55 PM on October 23rd, 2008

    “It’s the most wonderful time of the year… “…

    Oh, this is much better, indeed, than moping about, griping and complaining about politics!
    SHARETHIS.addEntry({ title: “”, url: “” });……

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  7. Adam's Blog
    October 24, 2008 - 12:32 AM on October 24th, 2008

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      Podcast Show Notes
    Would this display be allowed about Barack Obama? (Hat Tip: The Midnight Sun.)
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  10. Rosemary
    October 24, 2008 - 01:25 AM on October 24th, 2008

    Hi. I got tired of writing about politics for a day, so I wrote about my adventure to the optotristian. Oh yeah. lol. Great post you’ve written, as usual. ;)

  11. Rosemary
    October 24, 2008 - 01:28 AM on October 24th, 2008

    um…optometrist. Geez. ;)

  12. Democrat=Socialist
    October 24, 2008 - 11:12 AM on October 24th, 2008

    Fred Thompson Needs To Tell You Something…

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  15. snowy egret
    October 25, 2008 - 10:45 AM on October 25th, 2008

    The demacrtaic party of tyrany and and dictatorship truly they are the axis of evil THEY ARE THE SITH LORDS:o

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  18. killdemos
    October 25, 2008 - 09:20 PM on October 25th, 2008

    buy guns while you still can. It is going to come to kiling these democrat socialaist traitor scum…

  19. AKD
    October 26, 2008 - 12:04 PM on October 26th, 2008

    Gotta love politics… :)>-

  20. Right Truth
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  21. Woman Honor Thyself
    October 26, 2008 - 09:55 PM on October 26th, 2008

    Ach-MAD-inejad Sick?…

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    October 26, 2008 - 10:08 PM on October 26th, 2008

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  24. DaveB
    November 6, 2008 - 03:06 PM on November 6th, 2008

    Thank you Obama supporters. $600 matching Govt Contribution, Huh? That means that anyone making $12,000 a year or more is out of pocket. (5% of 12,000 = $600) That breaks down to $6.25 an hour which is well below minimum wage. That means that even the working poor get screwed. So much for the promise that anyone who earns less than $250,000 won’t see a tax increase. Somebody need to start a blog on broken campaign promises. I think it will be pretty long……….

  25. Rick conway
    November 6, 2008 - 03:32 PM on November 6th, 2008

    From here to his birth place of africa

  26. Rick conway
    November 6, 2008 - 03:33 PM on November 6th, 2008

    :d/

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    [...] Posts Established By Congress When It Approved The Bailout By: Pam On: Nov/13/08 – I told you so: For their part, lawmakers have yet to nominate the five-member Congressional Oversight Panel, [...]

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