WASHINGTON, D.C. | April 21, 2009
The following op-ed penned by Rep. Howard P. “Buck” McKeon (R-CA) for The Washington Examiner details a soon-to-be-introduced Republican proposal to help Americans protect and rebuild their hard-earned savings. McKeon is the top Republican on the U.S. House Education and Labor Committee and a member of the House GOP Savings Recovery Solutions Group.
How the GOP is trying to save your savings
By U.S. Rep. Howard P. 'Buck' McKeon
Op-Ed Contributor | 4/21/09 10:42 AM
If there’s one blessing from this recession, it’s this: People are saving money again. After dwindling to basically nothing several years ago, the personal savings rate of most Americans has jumped to 5 percent of their disposable income, according to the Commerce Department.
That’s the highest rate in 13 years, but what are President Obama and congressional Democrats doing to protect those savings? Or recover those that have been lost from the plunging stock market?
They are doing what they usually do: Looking to create more regulations and more programs that take away more of your money.
Some Democrats are pursuing policies that are causing Americans’ savings to evaporate even faster, such as the trillion-dollar “stimulus” package that will be paid by your grandchildren. Some are even proposing to wipe out 401(k)’s entirely, replacing them with government-run accounts that put bureaucrats in charge of your savings.
That’s why I have joined my fellow congressional Republicans to develop a blueprint to help Americans rebuild their lost savings.
We are doing this because we know Americans are worried. In fact, they are more concerned about the decline in the stock market and their investment losses than about losing their jobs in the current economy, according to a National Public Radio survey last month.
This is because, for many people, their savings is more than a pile of money and stock certificates. It’s a path – usually the only one they can take – that leads to a better life for them and their children.
People often go down this path by opening a 401(k) when they start their first “real” job after college. Or when they start contributing to a college fund after their firstborn arrives.
Some people are on this saving path in case of emergencies, which range from the everyday (flat tire) to the extreme (house on fire). Still others are on it because of that business they always wanted to start. Or that house on the corner they’ve driven by – and dreamed about – for years.
Whatever their reasons, Republicans can’t rebuild Americans’ lost savings overnight. As any saver knows, it takes time and effort. But the GOP can offer them more tools to begin financial recovery – for themselves and for the nation.
The Republican plan is simple: We want to enact ideas that offer flexibility and freedom to save – while eliminating penalties that would make it hard for Americans to rebuild what they have lost.
These deas will soon be formally introduced in Congress as the Savings Recovery Act, which will help Americans save by:
- Raising the contribution and “catch-up” limits for individuals and families so they can rebuild their retirement savings.
- Effectively reduce by up to half the cost of a family’s contribution to “529” college savings accounts by extending the existing credit to the accounts.
- Allowing more Americans to increase their income by doubling the Social Security earnings limit from $14,160 to $28,320.
- Providing tax relief for investors and seniors by immediately suspending the capital gains tax on newly acquired assets for the next two years. The plan also calls for raising and indexing to inflation the amount of capital losses allowed against ordinary income to $10,000, and suspending taxes on dividend income through 2011.
- Stabilizing worker pensions and helping employers invest in the future by temporarily providing an increased “glide path” for recognizing losses and two additional years to resolve pension funding shortfalls.
- Preserving employee-controlled 401(k)’s by blocking efforts to wipe them out entirely and replace them with government-run accounts.
Benjamin Franklin’s 18th century wisdom of “a penny saved is a penny earned” is making a comeback in the 21st century. Americans are working toward recovery, and many have started (or continued) on their savings paths to get that house, car, college fund – or even peace of mind. Federal rules and bureaucracy should not stand in their way.
# # #