RETIREMENT SECURITY

Democrats will stop Bush Administration plan to privatize Social Security.   

Republican Proposal:

Ø      Republicans continue to push for Social Security privatization; this year’s President’s budget includes private accounts, the Administration’s July budget update includes this risky scheme, and Republicans talk about Social Security “reform” as a priority for 2007.

Ø      Slashes benefits for middle-class Americans by more than 40 percent for future retirees, even if you do not open a risky private account.

Ø      Drains trillions of dollars from the Social Security Trust Fund, threatening seniors’ benefits.

Ø      Increases the national debt by about $5 trillion over 20 years, endangering our economy and increasing our borrowing from foreign nations.

Democrats Proposal:

p       Bipartisan solution to strengthen Social Security, once risky private accounts are off the table.

p       Stop Republicans from raiding the Social Security Trust Fund surplus. 

Democrats will enact real pension reform to protect employees’ financial security from CEO corruption and mismanagement. 

Republican Record:

Ø      Traditional retirement plans are at risk, with corporate bankruptcies -- by companies like United Airlines -- cutting pension benefits for workers and even profitable companies abandoning pensions or cutting benefits.

Ø      Corporate executives are enjoying lavish retirements, including Exxon Mobil’s outgoing CEO, R. Lee Raymond with a retirement package of $400 million.

Ø      The Bush Administration continues to push polices that force Americans to save for retirement on their own and erode their retirement security.

Democrats Proposal:

Ø      Reform bankruptcy and pension laws to prevent companies from unfairly dumping pension plans.

Ø      Make certain that employees receive the benefits they have been promised after a lifetime of hard work; if employee benefits are cut, executives should face similar restrictions.

Ø        Protect longtime, older employees when a company moves from a traditional pension to a cash balance plan.

Democrats will expand retirement savings.

Republican Record:

Ø      Families are increasingly on their own, when it comes to retirement savings.

Ø      The percentage of people in employer-sponsored retirement plans dropped from 50 percent to 48 percent from 2001 to 2004. [CRS]

Ø      Fewer households owned at least one retirement account in 2004 -- whether an individual retirement account (IRA), a 401(k) plan, or other employment-based savings plan -- compared with 2001. [CRS]

Democrats Proposal:

p       Provide nearly 100 million Americans with the opportunity to create a retirement nest egg, through matching dollar-for-dollar the first $1,000 contributed to an IRA, 401(k).

p       Establish tax credits for small businesses to set up employees’ retirement accounts and simplify and strengthen retirement savings opportunities, including encouraging automatic enrollment in 401(k)s.