The Center for American Progress has launched the Progressive Savings Project to provide information about the state of retirement savings in the United States, the potential effects of Bush administration savings and tax proposals, and progressive alternatives to truly expand access to savings and wealth creation to millions of lower- and middle-class Americans.
In the U.S. today, too many Americans are left out of the process of saving and wealth creation for retirement. In any given year, more than half of American workers do not participate in employer sponsored pension plans; the same is true for 92 percent of the working poor, 80 percent of small business employees and 86 percent of part-time workers, including mothers who leave and re-enter the workforce after having children.
With the baby-boom generation set to retire, finding ways to expand opportunities for retirement savings is an imperative.
In early 2004, the Bush administration is likely to re-introduce a retirement savings proposal which would do exactly the opposite. They call it an offer of new ways to save, but really only the privileged few Americans who are already saving the most while offering little or nothing for hard-working middle class Americans. And the plan is fiscally reckless – blowing a new hole in our long-term deficit over the next 75 years that would be half the size of the existing Social Security deficit, according to the Tax Policy Center.
Below you will find information on progressive alternatives to the Bush Administration’s plan such as the Universal 401(k) plan developed by American Progress Senior Economic Adviser Gene Sperling. You will also find up-to-date critiques and analyses of the Bush plan by leading scholars, as well as more general information on retirement savings in the U.S.
New Ways of Savings, by Gene Sperling, November 18, 2002
Let’s face it: Neither Democrats nor Republicans have a viable plan for how they are going to reform Social Security so it can remain solvent for the next generation of retirees. What’s more, while the parties haggle over initiatives that are bound to fail, Social Security is becoming ever more vulnerable. Because a permanent solution is not on the horizon, we would do well to consider an interim one.
America Must Get Used to Saving, by Gene Sperling, October 14, 2002
Post-Enron reforms will do little for… tens of millions [of Americans] because they fail to address the backwards nature of the current national savings policy.
The Real Investor Class, Blueprint Magazine
Do we want to direct $100 billion a year to reward a handful of already wealthy investors, or do we want to promote an agenda to help 100 million more Americans become new or stronger members of the investor and wealth-creation class?
The Administration’s Savings Accounts Proposals: A Critique, PowerPoint Presentation by Peter Orszag and Gene Sperling, November 13, 2003
Orszag and Sperling lay out the current problems with out retirement savings system and explain how the Bush proposal would exacerbate, rather than alleviate, each and every one.
The Administration’s Savings Proposals: Preliminary Analysis, by Leonard E. Burman, William G. Gale, Peter Orszag, March 3, 2003
Details the regressivity and lack of real savings incentives in Bush’s 2003 proposal
Proposed Savings Incentives Would Cause Huge Revenue Hemorrhage In Future Decades, by Robert Greenstein and Joel Freidman
Analysis of Bush’s 2003 savings proposal, including the fiscal effects and negative impact on small business coverage.
“Progressivity and Government Incentives to Save” Robert Greenstein and Peter Orszag
Harvard Conference Paper
Engen and Gale “The Effects of 401(k) Plans on Household Wealth”
New America Foundation Asset Building Program
CBO Report “Utilization of Tax Incentives for Retirement Saving”
GAO Report: “Private Pensions: Issues of Coverage and Increasing Contribution Limits for Defined Contribution Plans”
BLS 401k data
Survey of Consumer Finances
Employee Benefits Research Institute