Here in Rhode Island, the issue of hedge fund investing of pension dollars has been a source of much conflict and concern. Hopefully with so many financial experts now leading our state government (Tom Sgouros, Seth Magaziner, Gina Raimondo, I’m talking to you!) we can make sure that public pension dollars in Rhode Island are invested wisely.
From the Whitehouse Press Office:
Sen. Whitehouse and Rep. Neal Introduce Retirement Savings Bill
Automatic IRA Program will Help Enhance Retirement Security for Tens of Millions
Washington, DC – Senator Sheldon Whitehouse (D-RI) and Congressman Richard E. Neal (D-MA) introduced legislation today that would dramatically enhance the retirement security of millions of Americans. According to most financial planners, the United States is at the precipice of an impending retirement crisis. Many Americans are simply not saving enough to be financially secure in retirement. It is estimated that 75 million workers have no employer-provided retirement plan or other opportunity to save through workplace contributions.
The Automatic IRA Act offers a common-sense solution to dramatically expand retirement savings in the U.S. Under the bill, tens of millions of workers would be eligible to save for retirement through a simple payroll deduction. The non-partisan Retirement Security Project has estimated the Whitehouse-Neal Auto IRA proposal could raise net national savings by nearly $8 billion annually.
“Each month, tens of millions of Americans build toward a comfortable and dignified retirement by contributing to employer-based savings plan. Unfortunately, half of American workers don’t have access to employment-based accounts and may find it much more difficult to save,” said Senator Whitehouse, a member of the Senate Budget Committee. “This bill would give those without access to a 401 (k) plan the opportunity to benefit from automatic monthly savings. Coupled with Social Security, such tax-preferred savings can help people in Rhode Island and across the country enjoy financial freedom in their golden years.”
“Getting more low and middle-income workers into the retirement savings system remains one of my top priorities. Far too many Americans are putting their retirement at risk because they do not have access to a workplace savings plan. I believe this auto-IRA bill can dramatically improve their post-employment years. By making it easier for workers to save, millions of Americans will enjoy their retirement more secure and content,” said Congressman Neal, a senior member of the House Ways and Means Committee.
The Whitehouse-Neal legislation creates automatic payroll deposit Individual Retirement Accounts, or Auto IRAs, for workers who do not have access to employer-provided qualified retirement plans. The bill would also require employers with 10 or more employees to automatically enroll workers in an Auto IRA unless the employee opts out. The employers could receive tax credits to defray the costs of setting up the accounts. We know that automatic enrollment has been extremely successful in getting more people to save for retirement. Studies have shown that participation rates are at least 10 percentage points higher in plans with automatic enrollment (77 percent) than those without it (67 percent). The GAO also found that automatic IRA enrollment could increase the number of lower-earning households with retirement savings and increase retirement income as well.
The Auto IRA proposal, which was jointly developed by Brookings Institution and Heritage Foundation scholars, has garnered widespread support, including the AARP, the U.S. Black Chamber, the Women’s Institute for a Secure Retirement, and the Aspen Institute Initiative on Financial Security.
I am thankful for Bill and Melinda Gates and all they have done for so many poor people in the world. But I don’t think philanthropy really has the teeth to address inequality in our country. It’s like in Medeival times when the Queen would give out gold coins to the poor. It’s a nice gesture, but it doesn’t solve the underlying problems. Unless philanthropy can change the tax structure and income distribution problems we have, it will remain a token effort to address inequality.
The successes of the civil rights movement are rightly remembered as a major achievement of grassroots organizing—with crucial assists by Lyndon B. Johnson and a muscular White House.
But there’s another part of that history that you won’t see on the big screen: How philanthropists supported the civil rights push at key moments. As well—fast forwarding to today—for all the media attention on racial justice in the wake of police killings in Ferguson, MO, and New York City, there’s been little mention of how foundation money has helped frame the response to those events and articulate a policy agenda going forward.
Alabama George Wallace famously pledged “segregation forever” in 1963, only to watch Jim Crow dismantled by federal law over the next few years. In the history books, and now at a multiplex near you, Wallace lost and Martin Luther King, Jr. won.
In fact, though, we all know there’s been no such storybook ending—especially when it comes to the segregation of America’s neighborhoods and schools. Instead, Wallace’s promise for the future has largely come true, minus the “Whites Only” signs—as documented by an endless stream of studies. One 2013 study, by Richard Rothstein and the Economic Policy Institute, put things this way:
Racial isolation of African American children in separate schools located in separate neighborhoods has become a permanent feature of our landscape. Today, African American students are more isolated than they were 40 years ago, while most education policymakers and reformers have abandoned integration as a cause.
With $3 million dollars in technical assistance and consulting from the Citi Foundation and Living Cities, three poverty-stricken U.S. cities now have more irons in the fire for improving government and building an inclusive economy.
In case you don’t know Living Cities, it was founded in 1991 and is now backed by 22 foundations and several financial institutions that partner with it “to develop and scale new approaches to dramatically improve the economic well-being of low-income people.” The big names in philanthropy are all behind this place, including Gates, Rockefeller and Ford, and big banks like Bank of America, Citi, and JP Morgan Chase are on board as well.
Living Cities has been around long enough to watch concern about urban poverty move in and out of vogue. These days it is most definitely in vogue. Not only is inequality writ large a hot issue, but there’s a huge amount of excitement about urban renewal and a number of mayors are doing interesting things to help cities create opportunity and stability for low-income people. As well, there’s a lot of energy around making city governments more innovative agents of change, which is crucial for enabling the local public sector to reduce poverty and drive economic growth. Creative programs are happening in many cities, but often in isolation.
From our union brothers and sisters:
Some Certified Nursing Assistants report having to buy their own equipment to make sure they can monitor patients’ oxygen levels. Physical plant workers report troubling shortages of critical equipment they need to combat mold in ventilation ducts to patient and operating rooms. Now the Hospital is threatening to make the situation even worse by laying off more employees.
At the same time, Lifespan – A Health System paid more than $16.6 million in compensation to just ten executives last year. These individuals averaged $1 million more in compensation than the average compensation earned by CEOs of nonprofit hospitals nationwide. Meanwhile, Rhode Island’s largest healthcare employer has employees working more forty hours per week that get no health coverage.