Tuesday, October 09, 2007

A Great Idea...

I'm struggling with whether or not I should use the word "visionary" when discussing this new proposal.

Can something really be visionary if it is merely taking an idea from one place and extending it to a wider audience? On the other hand, if no one has suggested it or thought of implementing it, isn't that the very meaning of being visionary...seeing something that others don't yet - but soon will. Creative foresight to imagine something that isn't --- becoming?

Whatever you want to call it - this is a great idea: Clinton's 401K Proposal

[Hillary] Clinton laid out a proposal to provide a universal 401(k) plan for everyone, at a speech Tuesday in Webster City, Iowa.

She said the savings rate today is lower than it was in 1929, more than 75 million workers do not have employer-sponsored pensions to save for retirement and many people who do have retirement plans are not saving enough.

Under her "American Retirement Accounts" plan, everyone would have access to a portable 401(k) and the government would offer matching tax cuts of up to $500 to $1,000 to help middle class and working families save. The campaign estimates it would cost $20 billion to $25 billion a year to provide the matching tax cuts and said she would pay for it by freezing the estate tax at 2009 levels. "These accounts will take the best of the 401(k) plans and make them available to every working family," Clinton [said]. ...

Clinton said that like her health care plan, no one would be forced to set up these accounts and that people who like their current retirement accounts could keep them. She said the current government was subsidizing those who need it least, using about half of the nearly $200 billion spent yearly to encourage retirement savings to help the top 10% of earners and spending only 10% of that money to help the bottom 60% of earners.

Her plan would provide a matching refundable tax credit for 100% of the first $1,000 in savings for every married couple making up to $60,000 and would provide a 50% match on the first $1,000 of savings for couples making between $60,000 and $100,000 a year. The accounts would allow individuals to contribute up to $5,000 per year on a tax-deferred basis.

The credits would be available to all Americans in existing 401(k) type accounts as well as people who choose the accounts she proposes.

The plan would give new tax credits to small businesses to encourage them to provide retirement plans for employees. It focuses on creating competition among private firms that would drive more of them to provide marketable, secure plans, but that there would be an option of opening an American Retirement Account through "a publicly managed clearinghouse similar to the Thrift Savings Plan which Members of Congress can currently utilize". Those plans would be held and managed by private firms. ...

The accounts would allow penalty-free withdrawals for major investments like buying a home and paying for higher education or to help manage periods of unemployment.

Now there is a solid, enterprising, free market proposal that helps people, details how it will be paid for, and makes sense for millions of Americans.

I know that there is a large portion of the public that feels bitterness and distaste for Hillary...but it is not because of where she stands on the issues, or what she proposes, or how she intends to accomplish her goals for America. Instead, it is because of a charicature of her that has taken hold.

This is a brilliant idea. One that will likely soon be championed by politicians on both sides of the aisle. One that, hopefully, will soon be carried into fruition.

Hillary continues to propose rational, thoughtful, and achievable ideas about how we can improve our America. The more she does this, the less polarizing she becomes, and the less people accept the charicature. That's a pretty good idea too.

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