Duckworth Criticizes Republican Effort to Make it Harder to Save for Retirement
[WASHINGTON, D.C.] - Today, U.S. Senator Tammy Duckworth (D-IL) delivered a speech on the Senate floor criticizing legislation the Senate is considering that would make it harder for people to save for retirement while increasing regulatory burdens on employers. Specifically, the legislation would make it more difficult for states to help the 55 million Americans whose employers don't offer retirement plans save for their own retirements. Illinois's recently-created Secure Choice program would do just that for the 1.3 million Illinoisans who otherwise might not be able to save for retirement, but the plan is at risk if the Senate passes the legislation it is debating today. Video of the Senator's speech is available here and audio is available here.
Here are her remarks as prepared for delivery:
Thank you, Mr. President.
Our nation faces a retirement savings crisis. Too many seniors live in poverty after a lifetime of hard work and too many people are facing retirement who haven't been able to put away the savings they'll need.
That's a problem, not only on a human level and on a moral level, but also on an economic level.
When seniors are forced to live in poverty, that hurts all of us and is a strike against our nation's values. As more people have to spend money to take care of their retired parents and relatives, that hurts our economy.
For millions of seniors, they do not have family members who can spend those resources so it is taxpayers who have to make sure seniors have a place to live, food to eat and medicine to keep them healthy.
That's why we must do everything we can to help people save for retirement themselves and not have to rely on the taxpayer. To help them put a little bit of money away while they still can.
At the very least, we should stay out of the way of states that are taking action to address this looming crisis.
But that's not what the Senate is doing today. Instead, we are here debating a bill that would make it harder, harder for people to save for retirement. We are debating whether to limit the ability of state governments to help people save for retirement.
You see, while some Americans are fortunate enough to work at companies that offer their employees retirement plans, many more do not.
That is significant because research shows the best way for people to save for retirement is through a retirement plan at work. Without one, workers are less likely to invest in an IRA or a 401K savings plan.
That's why it's so worrisome that there are 55 million Americans right now in this country who do not have access to a retirement plan through their job. As the baby boomer generation approaches retirement, that's a serious problem.
President Obama proposed establishing a national individual retirement account program to help these 55 million Americans, but Republicans said no. So in the absence of Congressional action, both red states and blue states took the lead. And they did so by coming up for a way for Americans better save for retirement.
One solution that's gained momentum over the last few years is to establish retirement programs at the State level to give people the chance to have retirement contributions deducted out of their paycheck into that plan - if their company doesn't already offer a retirement plan.
It would give every worker access to the same tax breaks that those lucky enough to have access to an employer-sponsored plan receive.
In my home state of Illinois, we were one of the first to do this. A few years ago, our state created the Secure Choice Program. It's an innovative program that is poised to give 1.3 million Illinoisans the opportunity to save for retirement when it launches next year.
It is important to note that not only is Secure Choice innovative, it does not impose any burdensome mandates. It is optional - people can deduct up to 3% of their wages - and it applies only to businesses with at least 25 employees that have been in existence for 2 years.
Secure Choice is also portable so people can take their savings with them if they switch jobs. It's estimated to save taxpayers almost $243.8 million in the first 10 years because retirees will not need to rely as much on Medicaid spending.
It is a pragmatic solution to address a real world problem - and other States have since followed our lead in establishing similar programs.
That's why I find it so ironic that my Republican colleagues, who frequently speak about the need to protect State's rights, are using this bill we are voting on today to try to block states that are as culturally and politically different as Illinois and Arizona from offering - or even having the freedom to offer - these plans.
Instead of allowing States to be the laboratories of democracy they so often talk about, Republicans are trying to limit States' flexibility and, in the process, increase regulatory burdens on employers! That's quite a role reversal.
So why is there this push to block States from trying to help their residents better save for retirement? Well, one reason could be that it would pad the financial industry's bottom line.
That's because many investment brokers don't want increased competition and they're worried that programs like Secure Choice run by states will offer people saving for retirement a better deal.
News reports have indicated that mutual fund companies are worried that they will lose customers to state-based plans - even though the entire purpose of efforts like Secure Choice is to help the millions of Americans who are not currently saving for retirement.
Other news outlets have reported that Wall Street firms are worried state plans will be transparent about hidden fees, which means the financial industry may be forced to reveal that they are charging fees that are a little bit too high and they might be forced to lower how much they charge.
So, instead of encouraging greater competition that will help 55 million Americans save money for retirement, some of my colleagues appear to be listening to Wall Street lobbyists who want less competition and who want to take away a retirement savings option from people.
And here I was thinking that conservatives believe competition produces better outcomes for the American people!
At the end of the day, we, as United States Senators, must do everything we can to make it easier for people to save for retirement, not harder. We must look out for the constituents who sent us here to represent them, not for Wall Street or for special interests.
That's why I urge my colleagues to stand by the states that have led the nation in creating retirement plans - states as different as Illinois, Arizona, California, Maryland, Oregon, Connecticut, Washington and New Jersey.
Do not take away the opportunity to save for retirement from 55 million hardworking Americans.
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