What do you think of Sen. Tom Harkin’s new retirement proposal?
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Less than two weeks after announcing his own retirement in 2014, Sen. Tom Harkin, D-Iowa, has unveiled a proposal to benefit retiring Americans.
Harkin wants to start an “evolving discussion” about a privately run retirement system for older Americans. The name would be “USA,” for “Universal, Secure and Adaptable,” and the basic idea is that workers without a retirement plan would be able to create one by authorizing automatic withdrawals from their paychecks, while employers are given tax credits to offset their costs.
He calls retirement a “three-legged stool,” based on personal savings, Social Security and a pension — different from a defined benefit system as has been the case for most U.S. companies’ workers for decades.
“It’s something I’m working a lot on,” Harkin told The Gazette. “Thirty years ago, one out of every two people had a pension. Now it’s one out of every five. And it’s getting worse. It keeps going down.”
Harkin chairs the Senate Health, Labor, Education and Pensions Committee, and he calls his pension proposal — which he hasn’t offered yet — one of his last main legislative achievements he wants to notch before leaving Washington.
He has statistics on his side. Fifteen percent of Iowans are older than 65 — one of the highest rates in the nation — and more than 78,000 are older than 85, according to statistics from AARP Iowa. Furthermore, the percentage of Iowans older than 85 is projected to grow by 36 percent by 2030, making the Hawkeye State one of the more senior states in population.
What do you think of Harkin’s proposal? Would it be an improvement over the current system?
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I certainly don’t know enough about it to have much of an opinion. I don’t think anyone does.
This may be the kind of thing that takes years to nurture before it becomes real. I wonder why Senator Harkin is initiating this topic when he has less than 2 years left in the Senate. On the surface, it does not make sense.
Please explain this statement: “the basic idea is that workers without a retirement plan would be able to create one by authorizing automatic withdrawals from their paychecks, while employers are given tax credits to offset their costs.”; Money is taken out of an employees paycheck, but the business gets a tax credit?
Please, the DEM controlled Senate hasn’t produced a budget in over 1,000 days. Why would anyone put any faith into a DEM Senator creating some kind of retirement plan?
Note to Harkin, welcome to the real world, we already have a private system in place, it’s called a 401 K. Will this be in additon to that & social security? Before he slaps another cost on their favorite whipping boy (small business) he should be working on the current unsustainable programs they are stealing from now.
That said, I am all for more private ownership in such accounts that can be passed to heirs or pay the death taxes.
The 401(k) is a private system? Nope – it’s a government sponsored program that provides meaningful tax advantages to both employers and employees.
It was created by Congress, but I would love to hear how you think it’s a benefit to employers? Can’t wait for this explanation.
Most employers pay some kind of matching funds for employees that contribute to a 401 (k). These matching contributions are 100% deductable for the employer in the year the contribution is made, but create no taxable income for the employee until they take a distribution.
So it was congress and their “govt. sponsored programs” that are responsible for the demise of pensions. (?)
It just means we can pay the taxes now or…. pay them later. Why am I skeptical in there thinking? An immediate source of revenue perhaps?
Anyway, most of us can’t vote ourselves a generous pension and then expect others to pay for it. Not to mention, vote themselves a raise just before retirement as a way to increase their pensions.
Why can’t we just have the same retirement plan that the Senate and the Congess enjoy?
I seem to distinctly recall people like Harkin screaming at the top of their lungs when George W. Bush proposed allowing people to take a portion of their Social Security savings and invest them in conservative, low risk methods in the stock market.
People like Harkin screamed it was “privatizing” Social Security Yet, now we have Harkin proposing privately run retirement system? Sounds like just another example of blatant hypocrisy out of Harkin.
That was Social Security. This isn’t. I don’t have an opinion on this proposal yet, but your argument makes no sense.
Sen. Harken. Where were you with your ideas when George Bush was looking for help reworking SS a few years ago and the AARP and all the Democrats were fighting any changes?
I’m glad Tom is retiring. Though I have supported him for many years, I find many of his recent proposals to be laced with ignorance about how his proposals could be corrupted and used by the private interests who would want to subjugate the masses.
No Tom. No longer do all Americans wish for what is best for most of the people. There are too many well funded entities who would want to create another program in the name of the people, but for the benefit of their own pocket. And for those existing programs, those same private interests are already scheming to tear apart the Post Office, and Social Security in the same ways that they have made inroads into Medicare.
You’re right Tom, its time for you to resign.