Reps. Huffman and Bonamici Fight GOP’s Attack on Americans’ Right to Retire
Washington, D.C.- Today, the House of Representatives approved legislation, H.J. Res. 66, that will make it more difficult for many Americans to save for retirement, repealing by a party-line vote of 231 to 193, federal rules allowing states to establish retirement savings plans for their residents. In response, Representatives Jared Huffman (D-CA) and Suzanne Bonamici (D-OR) today introduced the “American Savings Account Act” to provide a new savings tool to all American workers, even those without employer retirement plans, to help them save for a strong and secure retirement.
H.J.Res.66, which passed the House today, nullifies a critical U.S. Department of Labor rule, which went into effect in October 2016, that supports state efforts to establish retirement savings plans. By using the Congressional Review Act process, this vote would also prevent the Department of Labor from reissuing any “substantially similar” rules in the future.
The Huffman-Bonamici legislation, originally introduced in the 114th Congress, would create a new American Savings Account, a personal, tax-advantaged retirement savings plan modeled after the high-quality plan offered to federal workers since 1986, and make it available to every private sector American worker currently without access to an employer-sponsored savings plan such as a 401(k) or 403(b) plan. As workers switch jobs more frequently, they are less likely than in the past to be covered by a traditional employer-sponsored retirement savings plan, according to a recent study based on Census data.
“Some of my colleagues claim to stand for state’s rights, but their votes say otherwise: they are using the Congressional Review Act to trample on state efforts to help Americans save for their retirement,” said Rep. Huffman. “America is in the midst of a retirement-savings crisis and we can either help workers save now or the federal government will foot the bill later. The American Savings Act will preserve Americans’ ability to meet their retirement goals. Our legislation, modeled after the great progress pioneered in California, Oregon, and elsewhere would ensure that every worker in America has access to high-quality savings options to provide them an income in retirement.”
“Every American deserves to retire with dignity. The action taken by Congress creates uncertainty and infringes on states’ rights by dismantling rules that clarify federal law for states with state-administered retirement savings programs,” said Congresswoman Bonamici. “Oregon took an innovative approach to encourage workers to save for a secure retirement and carry their savings from job to job. The American Savings Act is modeled on the OregonSaves program and gives workers across the country the opportunity to save for a secure retirement and retire with dignity.”
“It shouldn’t matter whether you work part-time or full-time, as an employee or as a contractor, or for a huge corporation or a tiny business: every American worker deserves access to a financially secure retirement,” said Sen. Jeff Merkley (D-OR), who introduced the Senate version of the “American Savings Account Act” in the 114th Congress. “With private-sector pensions becoming rarer and rarer and an increasing number of workers relying just on Social Security to retire, it is more important than ever to expand high-quality retirement savings options to all workers.”
"It's a shame that this concept has been met with opposition from companies who have ignored the retirement needs of low-income families and small businesses that can’t afford their products,” said Yvonne R. Walker, President of SEIU Local 1000. “These low-cost retirement savings plans just make sense: they provide an opportunity for workers they would not otherwise have."
Specifically this legislation would:
· Automatically enroll private sector workers whose employers do not currently provide qualified retirement savings plans in an American Savings Account;
· Ensure that all private sector workers, including full-time, part-time, and contract, have immediate access to a retirement savings account no matter the size of their employer;
· Enable workers to discontinue their participation, or to change their contribution level between 2% and 10% to be deposited in the ASA from each paycheck;
· Permit employers to provide tax-advantaged matching or non-matching contributions to employee ASA accounts;
· Allow, but not require, self-employed individuals and 1099 independents to enroll in an ASA; and
· Protect substantially similar State programs to provide universal access to retirement savings accounts.
States like California and Oregon have long recognized the need to support their citizens’ ability to save for retirement and have moved forward with plans to establish state-wide retirement funds for all workers. In September 2016, California Governor Brown signed legislation to automatically enroll nearly 7 million workers in a 401(k)-like retirement plan managed by the state and available to private sector workers who do not have access to retirement savings plans through their employer. Oregon has taken similar steps to establish an Oregon Retirement Savings Plan. Congressman Huffman and Congresswoman Bonamici’s legislation includes many of the innovative policy recommendations currently moving forward in the two states.
The American Savings Account Act is also cosponsored by: Zoe Lofgren (D-CA), Grace F. Napolitano (D-CA), John Garamendi (D-CA), Barbara Lee (D-CA), Mike Thompson (D-CA), Juan Vargas (D-CA), Ted Lieu (D-CA), Mark Takano (D-CA), Gregory W. Meeks (D-NY), John Conyers (D-MI).