A Bipartisan Appeal To Save For Retirement
Clinton, congressional leaders call on Americans to plan for the future
WASHINGTON (AllPolitics, June 4) -- In a bipartisan appeal, President Bill Clinton, Senate Majority Leader Trent Lott and House Speaker Newt Gingrich on Thursday urged working Americans to put more of their earnings aside for retirement.
Clinton reiterated his call to set aside all of the federal government's projected budget surpluses
until lawmakers figure out how to strengthen Social Security. He called that "the right policy for America and the right thing for the 21st century."
But Clinton also suggested government can only do so much, and individuals have to better prepare for their own retirement through 401(k) savings plans and other methods.
Young people have a particular opportunity to plan ahead and build a nest egg for the future, he said. One simple answer, Clinton said, might be to allow companies to automatically enroll workers in 401(k) savings plans unless they opt out.
Companies that have tried that have seen participation rates jump from 67 percent to 90 percent, he said.
The leaders appeared at the opening session of a two-day "national summit" on retirement savings.
Sen. Lott praised the bipartisan call, noting the speaker line-up of Clinton, Vice President Al Gore, Gingrich, Rep. Dick Gephardt and himself.
"This is something you won't see very often," Lott said. "It goes to show we are serious about this opportunity ... We must get away from suspicion. We must get away from demagoguery. We must get away from partisanship."
Both Lott and Gingrich said the federal government can do more to help people prepare for retirement through tax incentives and regulatory relief.
"We have discouraged it [savings]," Lott said. "We haven't thought about it." Lott said he sees the issue in a more personal way now, after having to sell his childhood home to help pay for assisted care for his mother, who suffered a stroke last year.
Gingrich said Washington can help by spending less and reducing the tax burden, so people have a greater chance to save.
"To go to somebody who's at the margin, with three kids, barely earning enough money, both the husband and wife working, and say to them, 'Gee, why aren't you saving more?' is a sign that you were never in that situation," Gingrich said.
Saving for retirement is a tougher problem than it used to be, Gingrich noted, because many Americans are living longer now, well into their 80s and beyond.
"None of us saved for that world," Gingrich said.
Clinton said while the federal government's expected budget surpluses are great, lawmakers should resist the temptation to immediately embark on new spending or tax cuts.
"Those [budget] projections don't mean a lot because sometimes they don't pan out," Clinton said.
Clinton said the nation's political leaders should address Social Security's problems now, because the nation is at a "magic moment" of high employment, low inflation and smaller welfare rolls.
"If we can't deal with this issue now, when will we ever deal with it?" Clinton asked. "Our goal ought to be to have the Congress take up Social Security reform as the first order of business early next year, and finish in the first half of 1999 ... so we baby boomers don't bankrupt our children in their ability to raise our grandchildren. My commitment is to try to get that done on that timetable."
Americans save far less than people in some other nations. The nation's savings rate -- that is, what people save as a percentage of after-tax income -- was 3.9 percent last year, and it dipped to 3.6 percent in the first quarter of 1998.
The Associated Press contributed to this report.
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