Democrats have obliquely admitted they covet Americans' pensions. Last week, congressional Republicans told them to stay away. The shame is that they had to do anything at all.
The first rumblings were heard in the 1990s, when Democrats were said to be coming after our retirement accounts. Back then, the warnings were easy to pass off as hyperbole or a cranky conspiracy theory. Today, they pass as prescient.
In January, Bloomberg reported the "U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and individual retirement accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry."
Alarms went off. In February, former House Speaker New Gingrich and policy analyst Peter Ferrara warned in our "On The Right" column that "Washington is developing plans for your retirement savings."
"The idea," they said, "is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.
"They will tell you that you are 'investing' your money. ... But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds."
Last week, Connie Hair wrote the following in Human Events about the Annual Report of the White House Task Force on the Middle Class released in February:
"The radical solution most favored by Big Labor is the seizure of private 401(k) plans for government disbursement — which lets them off the hook for their collapsing retirement scheme. And, of course, the Obama administration is eager to accommodate their buddies."
Hair says a "backdoor bull's-eye is on your 401(k) plan and trillions of dollars the government would control through seizure, regulation and federal disbursement of mandatory retirement accounts."
Republican lawmakers are taking the threat seriously. They have expressed to the administration through a letter their "strong opposition to any proposal to eliminate or federalize private-sector defined contribution pension plans." These congressmen know that among their Beltway brethren there exists an eagerness to "essentially dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan."
This isn't the first time Democrats have eyed Americans' retirements. In 1993 the Washington Post reported that the Clinton administration considered an "unprecedented effort by the federal government to deal with its budget woes by turning to the more than $4 trillion in cash, stocks and other investments held by pension funds."
They made another pass in 2008, when Teresa Ghilarducci, a professor at the New School of Social Research who was invited by Democrats to testify, brought the idea of government "guaranteed retirement accounts" to the House subcommittee on income security and family support. Such accounts would be administered by the Social Security Administration. "Contributions" would be required and the payout would be a lean 3%.
Ghilarducci didn't suggest that 401(k)s be eliminated, but she didn't have to. She supports removing the favorable tax treatment they receive, which would virtually destroy their reason to exist.
To close the loop, we refer back to the White House's middle-class task force report. It mentions guaranteed retirement accounts as a way to "give workers a simple way to invest a portion of their retirement savings in an account that was free of inflation and market risk and, in some versions under discussion, would guarantee a specified real return above the rate of inflation."
Or, as Gingrich and Ferrara say, the government would treat ostensibly private retirement savings the same negligent way it's treated Social Security. Let's not forget: The courts have ruled that Washington isn't obligated to pay back a dime it's seized from paychecks to fund Social Security.
Don't think Washington would never wreck private pensions in the name of the collective good. It happened in Argentina, and if the same group that's determined to take over the U.S. health care system stays in power long enough, it could happen here.
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