One aspect of a new and improved federal regulatory scheme is the seizure of 401(k) retirement plans and the subsequent government-administered disbursement of the funds.

In Chapter 3 of the Annual Report on the Middle Class released in February by Vice President Biden and the White House Task Force on the Middle Class, the Obama administration calls for enhancing the “retirement options” for the middle class by imposing “new regulations to improve the transparency and adequacy of 401(k) retirement savings.”  

The plan, as sketched in the 43-page document, calls for the creation of something called  “Guaranteed Retirement Accounts” (GRAs). Biden slyly shifts the onus for the idea through weasel words typical of the federal government: “Some have suggested the creation of Guaranteed Retirement Accounts (GRAs), which would 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.” 

These accounts would be “free of inflation and market risk” because they would be under the direct and absolute control of the federal bureaucracy. There would be no risk because the funds would no longer be moored to the free market and subject to the fluctuations thereof. Rather, the retirement funds of every hard-working American dependent on a 401(k) for their retirement security would be nationalized and made subject to the whims and will of the executive branch. 

The current administration is practiced in the erection of such straw men to deflect their own socialistic and absolutist intent. The record is clear, however, and since the day of his inauguration, Barack Obama and his congressional co-conspirators have consistently and unapologetically set out to systematically nationalize the economy of the United States: first the banks; then the insurance companies; then the auto industry; then healthcare; and now the piece de resistance, the private savings accounts of millions of middle-class Americans. This is an unlawful usurpation of power unprecedented in the annals of American political history. 

Coinciding with the publication of the report described above, the Obama White House, together with the Departments of Labor and Treasury, issued a so-called “Request for Information” calling for a detailed analysis of the pros and cons of the “annuitization” of individual 401(k)s. The scheme was set forth in a set of “Proposed Rules” published on February 2, 2010 in the Federal Register. 

The document reads in part, “While defined contribution plans have some strengths relative to defined benefit plans, participants in defined contribution plans bear the investment risk because there is no promise by the employer as to the adequacy of the account balance that will be available or the income stream that can be provided after retirement.” And furthermore, “The Agencies are considering whether it would be appropriate for them to take future steps for them to facilitate access to, and use of, lifetime income or other arrangements designed to provide designed to provide a stream of income after retirement.”

The upshot of that clunky prose is that the Obama administration believes that employers cannot be relied upon to adequately manage the 401(k) retirement accounts it provides for their employees, therefore the federal government will relieve them of that responsibility and take sole discretionary control of those funds, thus eliminating the risk of mismanagement. In other words, the Obama administration is planning to divert the “stream of income after retirement” and channel it right through Washington, D.C. 

Under the section of the Proposed Rules marked “Background,” the document declares that it is the intent of the agencies considering these changes to further “their efforts to promote retirement security for American workers.” And, to “provide wages that support families, and rise with time and productivity.” Since January 2010, it seems that the only thing rising with time is the likelihood that the economic wealth and might of our once enviable Republic will be methodically eradicated through the exercise by the executive branch of unconstitutional authority over every financial aspect of our nation’s people. 

While the time for commenting on these Proposed Rules has passed (May 3, 2010 was the deadline), there is yet time for concerned citizens to contact their elected representatives and voice their opposition to President Obama’s proposed seizure of their 401(k) retirement accounts. 

In response to the White House’s pronouncements, many Republicans in the House of Representatives, including GOP leader John Boehner (R-Ohio), have joined together to defend against the federal assault on the financial freedom of the middle class. Boehner and a cadre of colleagues known as the “House GOP Savings Recovery Solutions Group” (an organization founded by Boehner to, “help Americans protect and rebuild their hard-earned savings as quickly as possible while making sure the federal government does not hinder the process”) have written a memo to the secretaries of Labor and Treasury, imploring them to “take no action” to nationalize the retirement security of millions of Americans, representing trillions of dollars. The text of the letter is reprinted below: 

Dear Secretaries Solis and Geithner:

As members of the Republican Savings Solutions Group, we write today to express our strong opposition to any proposal to eliminate or federalize private-sector defined contribution pension plans, such as 401(k)s, or impose burdensome new requirements upon the businesses, large and small, who choose to offer these plans to their employees.

In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts, (GRAs)” which would provide for protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” — presumably at taxpayer expense. In the Report, the Vice President recommended “further study of these issues.”

The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary — again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen. This despite data showing that 90 percent of households have a favorable opinion of the existing 401(k)/IRA system.

In light of these facts, we write today to express our opposition in the strongest terms to any effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or disfavor the private 401(k) system in favor of a government-run retirement security regime.

Similarly, and more recently, the Departments of Labor and Treasury have jointly issued a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options.”  While we appreciate the Departments’ seeking guidance and information from all parties and stakeholders in advance of regulatory activity, we strongly urge that the Departments not proceed with any regulation in this area before they have carefully and thoroughly considered all of the information received.

More specifically, we urge that the Departments take no action to mandate that plan sponsors — often, small businesses — include a “lifetime income” or “annuitization” option if they choose to offer a 401(k) plan to their employees, or that beneficiaries take some or all of their retirement savings in such an option. Data shows that 70 percent of Americans oppose the concept of a mandated annuity or government payout of their 401(k) plan. On a more fundamental level, Congress should not be in the business of choosing “winners” and “losers” among retirement security stakeholders. Instead, we urge the Departments to make it easier for employers to include retirement income solutions in their savings plans and to help workers learn more about the value of their retirement savings as a source of retirement income. Finally, to the extent new mandates and bureaucratic red tape from Washington push small employers out of the business of offering these plans to their employees, we would submit such an effort weakens, rather than strengthens retirement security. 

We appreciate your consideration of our views in these important matters and stand ready to work with you and the Administration to promote secure and adequate retirement savings for all Americans. 

Sincerely,

House Republican Leader John Boehner (R-OH)
Rep. John Kline (R-MN) 
Rep. Dave Camp (R-MI) 
Rep. Sam Johnson (R-TX) 
Rep. Dean Heller (R-NV) 
Rep. Brett Guthrie (R-KY) 
Rep. Michele Bachmann (R-MN) 
Rep. Pat Tiberi (R-OH) 
Rep. Bob Latta (R-OH) 
Rep. Erik Paulsen (R-MN) 
Rep. Lynn Jenkins (R-KS) 
Rep. Ed Royce (R-CA) 
Rep. Buck McKeon (R-CA)

While the goal of Boehner’s group is noble and laudable, the tactics it uses to resist the administration’s attack on middle-class savings seems somehow to justify them, as well. If Congressman Boehner and his allies are genuinely committed to helping  “Americans protect and rebuild their hard-earned savings,” then their interest, as well as that of our Republic and the citizens thereof, would be best served by a bold and relentless campaign to drive all branches of the national government to retreat to a place within the borders of their constitutional authority.

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votemout said:

Hands off, no more! Don't we already have GRAs in the form of Social Security, and isn't that system already bankrupt? Thanks, but no thanks, Mr. Obama.

May 05, 2010

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rprew said:

Wake up, Colin They're not idiots. I beg to differ. When you consider the past relationship between bad ideas and government, one can safely conclude that the worse an idea is, the more likely it is that government will embrace it. References: DOD, ED, DOE, HHS, DHS, HUD, DOJ, DOL, DEA, FDA, ACF, USDA, ATF, BLM, CIA, FBI, EPA, FDIC, FEMA (and I haven't even scratched the surface)

May 05, 2010

Still Free said:

They're at it again... Remember they need to find some way to pay for all the bailouts and they can't stand to see some cash sitting around somewhere. The fact that that cash does not belong to them certainly will not stop them. They have already raided the Social "Security" funds paid via taxes by American workers. If the folks on the government dole or on the government's payroll via jobs were smart enough to figure this out they would be very, very alarmed -- when all sources of revenue are exhaused (as in from us), where will they get their money? From where I sit, it isn't looking very pretty for anyone living in America.

May 05, 2010

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rprew said:

Study your history, Colin The CIA, FBI, ATF, FDA, and FDIC are all bad ideas? CIA: Drug running, assassinations, government overthrows, torture FBI: Waco, Ruby Ridge, OKC coverups ATF: complicity at Waco, Ruby Ridge, history of unlawful B&E, harassment of law abiding citizens FDA: laetrile, food additives, unsafe drugs, kickbacks, monopolies, high prices FDIC: essentially inadequate insurance to protect banks from bad practices facilitated and encouraged by the Federal Reserve Note that I have been extremely brief and very kind. Do you wish that these departments were never created or are you just disapproving of their performance? I am especially critical of their performance. In most cases, these agencies and departments were designed to fail, so, yes, it may be have been better that they were never created. I was simply making the case that washington could never get away with ... {whatever} Washington could never get away with involving us in one illegal war after another - Korea, Viet Nam, Grenada, Panama, Afghanistan, Kuwait, Iraq, Somalia... But it did. Washington could never get away with socializing our healthcare system. But it did. Washington could never get away with debasing our monetary system. But it did. Washington could never get away with involving us in a war in Europe which did not involve us in any way (WWI). But it did. Washington could never get away with using its own citizens as test subjects for chemical or biological weapons. But it did. Washington could never get away with land theft, genocide and consistent breaking of treaties. But it did. Washington could never nationalize any industry. But it did. It's a ridiculous notion that originates from a basic misunderstanding of how the capital markets work. Never underestimate the ability of greed, avarice, and power to manipulate government in control the markets.

May 06, 2010

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rprew said:

Colin... has closed eyes, stuck his fingers in his ears, and is humming very loudly. He has made it very obvious that he does not know his history and has absolutely no desire to learn. So be it... There is none so blind as he who will not see. I stand by my statements of illegal wars, testing chemical weapons on citizens, and genocide. I love this country dearly, but will not deny some of the terrible things done at various times by people wielding uncontrolled power in the name of our great nation. This is precisely why the Constitution, and strict adherence to it, is so vitally important. Mankind is capable of fantastic evil. The Constitution and the Holy Bible are our best safeguards against ourselves.

May 06, 2010

TaoMannaDon said:

Would this ever happen under a conservative administration? Of course it wouldn't. This is one more reason why liberalism must be stopped. The most outrageous liberal ideas are still waiting in the wings. They will surface when liberal control is absolute. We have only seen the restrained version of the liberal agenda. This is what they are willing to do while there is still a chance conservatives might begin a comeback in November. Imagine the damage inflicted upon America when liberals are confident of their power.

May 06, 2010 | url

rprew said:

... Would this ever happen under a conservative administration? Depends what you mean by "conservative"! If you mean "constitutional", then I whole heartedly agree. If, however, you use the word "conservative" in the same manner as is commonly used, i.e., the likes of the RNC, McStain, Palin, Bush I, Bush II, Gingrich, Romney, Huckabee, etc., then your hope is in vain. Look not to the two-edged sword of big party politics. One edge is as lethal as the other.

May 06, 2010

Patriot said:

Wow, Colin... REALLY? Colin Said: You just took a lot of surprising stances there. How is Afghanistan (just picking one from your list) an "illegal war"? What defines an illegal war to you? Are you serious? Like for real? Every war since WWII has been illegal. Stop getting your information from the TV and read a book. Why is Afghanistan an illegal war? Well let's see. Congress didn't declare war with Afghanistan, therefore it is illegal. Come on.

May 06, 2010

Job said:

No_Way GOD has the last word. I'd not want to be in the shoes of those who have concocted these insane illegal unethical immoral plans and schemes to take from the innocent.

May 06, 2010 | url

joeliberty said:

... "The heart is deceitful above all things and desperately wicked: who can know it?" (Jeremiah 17:9). I think our Founders knew human nature at its worst. They put safeguards in place that we have utterly failed in our corruption to uphold. Why would anyone think that the government is not capable of seizing 401k's? After all, I noticed after Obama's visit with Kirschner (President of Argentina, who seized private retirements) this idea became wildly popular with him. They use catch phrases to make it sound good like any slippery salesman would do. You have to be out of your mind to think that these retirement accounts are not in his sights. You are insane. He wants chaos, he wants revolution, he wants dictatorship....actually this is what the central bankers want. Obama is just doing what they have told him to do. People, this country is finished! Get used to it and come to reality! How will you maintain your freedom then? The only thing to stop this is a total and complete revolt of all Americans left and right against this stealing of their liberties! There is going to be a lot of angry people when this happens and their will not be any partisan ship to sail. I would not want to be a politician when this does happen!

May 06, 2010

toledofan said:

Insanity Insanity has taken over Washington and this Congress and the Administration has clearly shown why the Democrats can't be allowed to manage the government, the military or the economy. When you look around the world and see all the destruction Socialism has done, Greece comes to mind first, why would anyone in their right mind try to do the same thing here? The Democrats have become the 'Anti-American Party' and have shown their inability to do what is right under the Constitution or to do what is right for Americans. If these guys try to take away our retirement dollars, they won't be able to repel the angry mobs. I hope every Senior votes in Novemeber and we votes these bums out.

May 07, 2010

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Jeff Smith said:

As usual, after our money Nobody's money is sacred to politicians except their own - remember Al Gore "donated" his old underwear for a tax write-off, but gave no money to charity. Any scheme to steal the citizenry's money is OK with these b@stards - the current group in particular. If they steal my 401k money, I'm leaving the country. How I'll do that with no money remains to be seen, but I'm leaving. Or, maybe I'll take care of the problem another way...

May 07, 2010

Iceworm72 said:

This how the firestorm begins... Unless I am missing the mark by a mile, the seizure of 401(k)'s would trigger a firestorm worse than Health Insurance Reform created. Theft is theft and that is all that this move will be seen as in the eyes of those American who are law abiding and gun owning. If Eric Holder fears the Tea Partier now he should see them then! I am certain the ire of the the tax payer at that moment will be more than any administration or elected official can stand. Especially if it is attempted under this President, whom even his wife calls "a Kenyan". The Perfect Storm of intrique and villany is what this facistic avoricious is building towards. Again, I could be wrong, but I am afraid for where this will lead and what it will mean for our children.

May 07, 2010 | url

Sling Blade said:

... I'm sure we can all sleep better knowing the idiot Biden and his pack of corrupt cronies are now turning their attention to confiscating our retirement money. All these bottom-feeders are concerned with is appropriating ALL money for their personal use.I see revolt drawing nearer every day.These imperialist vermin believe themselves to be impervious to the day of reckoning. I think they are in for a big surprise.

May 07, 2010

Elephantine said:

Whatch out They are pushing for an armed breakout! We have to vote the basards out, and by big margins. Get the vote out, and protest like hell til the elections.

May 07, 2010

JayDe said:

John The ONLY verdict is Vengeance. The government SHOULD be afraid of the people. For a primer, re-view the 2006 movie, "V For Vendetta" One person standing against the government stands no chance. When the population stands against the government, the government stands no chance.

May 08, 2010 | url

cgrayt1 said:

this is what got Greece's people into the streets Promise - then renig. repeat. Big government's modis operendi. More of the "social justice" and big government growth meant to "control the people". Big brother, go ahead an jerk our retirement saving and redistrubuto to those who have not worked. This will kick the can down the road, but when the rest of our money is p1ssed away, you WILL see the people react like they are in Athens.

May 08, 2010

NeoConVet said:

Seizure of Private Investments It seems that the new Socialist Democratic Party (SDP) is following the leftist mantra of Argentina which recently played the same game of seizure in the name of removing risk (or gain). Perhaps the Greece approach is thought to be the way to go? Bigger gov't more handouts...few tax payers...and more reduction in freedom all in the name of someones idea of equality VS the Constitution.

May 08, 2010

DAN MOFFATT said:

THERAMMAN BRINGING BACK THE CHICAGO MOBS,THEY WILL HANDLE OBAMA POLITICS.THEY WILL BE THE GOVERNMENT MUSCLE.THIS BOZO IS DANGEROUS.WE HAVE TO VOTE THEM ALL OUT IN NOVEMBER.IF WE DO NOT DO THIS,THIS COUNTRY WILL FALL BIGTIME.

May 11, 2010