Bloomberg: Obama Seeks ‘Automatic Pensions,’ Labor Enforcement

[FrenchieCat]

Feb. 26 (Bloomberg) -- President Barack Obama called for establishing automatic workplace pensions and expanding unemployment insurance as part of his spending plan for the U.S. Labor Department next fiscal year.

Obama is proposing a 4.7 percent increase in the Labor Department’s budget to $13.3 billion for the fiscal year beginning Oct. 1. That’s an increase from an estimated $12.7 billion in the current fiscal year and $11.8 billion in 2008, according to a budget outline submitted to Congress today.

The budget “lays the groundwork for future establishment of a system of automatic workplace pensions, to operate alongside Social Security, that is expected to dramatically increase” retirement and personal savings, Obama’s Office of Management and Budget said in its outline, without giving details on the costs.

The plan would force employers that don’t offer retirement plans to enroll employees in a “direct-deposit IRA account,” with the option for workers themselves to opt out. Currently, 75 million working Americans, or about half the workforce, lacks employer-based retirement plans, according to the administration.

The proposal “raises more questions than it answers,” said Representative Howard “Buck” McKeon of California, the top Republican on the House Education and Labor Committee.

“We need to take a step back and question this ever- expanding role for the federal government,” he said in a statement.

snip
Republicans in Congress may oppose efforts to broaden the unemployment insurance program, said James Sherk, a labor analyst at the Heritage Foundation, a Washington-based research group promoting free enterprise and small government.

“The entire premise is faulty,” he said. “Unemployment insurance is not supposed to be a safety net. Its not heating assistance or food stamps, it’s not supposed to be an expanded version of welfare.”

much more.....
http://www.bloomberg.com/apps/news?pid=20601213&sid=a1.x9_d3sPc0&refer=home

[liberal N proud]

1. One more thing for the GOP to label as class warfare

[FrenchieCat]

2. Well, guess it comes with the territory if one is going to be a progressive President....

Which it appears is what President Obama will be.

[liberal N proud]

8. And we need to support him and help fight the right wing

bull shit.

[PBS Poll-435]

3. "Unemployment insurance is not supposed to be a safety net."

Really?

All this time I thought it was.

[keopeli]

4. Unemployment insurance is not supposed to be a safety net? wtf?

Since when is any "insurance" NOT a safety net? Bizarre!

Tells me I don't need to read the article. I live in the real world.

[Pirate Smile]

5. I LOVE the direct-deposit IRA account requirement. Most people would use it if it was there and

they had to opt out but they wont bother to go initiate it themselves because it seems like too much of a pain in the ass for the small amount they can afford to save.

This is a program the behavioral scientists/economists (I'm not sure now exactly what their title is) say will increase savings over the long term.

It is a great idea.

[FrenchieCat]

7. According to the article,

it would increase participation from 15% currently to as much as 80%!

The pension plan would increase the savings participation rate for low and middle income workers to about 80 percent from 15 percent now, according to the budget blueprint.

also....

The president also proposed making extended unemployment benefits more of an “automatic stabilizer” when certain economic conditions arise. The change aims to make the unemployment insurance program a “more effective social safety net,” the administration said. The proposal didn’t provide details on how that would be done or the extent of the changes.

[PBS Poll-435]

9. Plus....There is a tax-incentive for IRA (non-Roth) contributions

Reduces AGI.

[FrenchieCat]

6. The article continues.......

The Labor Department will also increase enforcement of workplace regulations, according to the budget plan. “For the past eight years, the department’s law enforcement agencies have struggled with growing workloads and shrinking staffs,” the administration said.

Funding would be increased for the Occupational Safety and Health Administration, for the wage and hour division of the Labor Department, and for the Office of Federal Contract Compliance Program.

[antigop]

10. Nope. This is not a solution. The solution is to bring back DEFINED BENEFIT pension plans.

Any actuary will tell you the most efficient way to provide retirement benefits for a large population is through a DEFINED BENEFIT pension plan.