Al Franken Makes Bold New Proposals

"BLOG"

07/23/2008

Paul Munnis
The Rochester Democrat


Al Franken, candidate for the U.S. Senate came to Rochester today and he spoke to a crowd of an estimated 100-120 people during the lunch-hour over at the Rochester Labor Center.

He spoke of a need to fire Norm Coleman, the existing Senator and he gave the reasons why.

Key among them are that Coleman voted with G.W. Bush 95% of the time on legislation that has hurt America in general and Minnesotans and middle class people in particular.

He used the opportunity to announce three key new plans:

His first proposal is called: “Kitchen Table Tax relief.” this is a set of tax credits designed to ease the burden on families caring for children and elderly loved ones.

Franken wants to expand the dependent care tax credit to cover more than one-third of child care costs for families earning up to $100,000.

He would create a $2,000 tax credit to help families take care of elderly or ill relatives.

The second proposal is called: 21st Century Family Leave. This is a policy to address 21st century family structures by dropping the compmany size in the present law to cover companies with more than 25 workers. (Right now it’s a company with more than 50 workers).

Franken also wants to create a "State Innovation Leave Policy" and help fund it.

Finally he wants to set a federal worker paid leave program to set a good example.

His third proposal is called 401(U) a revolutionary new kind of retirement account to help every Minnesotan develop long-term financial security.

The 401(U) features the following:

• Universal. Every firm with more than 10 workers that does not provide a qualified pension plan would be called upon to offer universal automatic payroll-deduction retirement accounts (modeled on current IRAs) as a default for their workers. Employers would not have to sponsor any retirement plan; they would not make matching contributions; and they would not have to comply with traditional retirement plan rules. They would not manage the plan at all. They would merely deposit a portion of their employees' paychecks into standard, easy-to-open retirement accounts that would be managed and maintained by participating financial institutions. And to cover whatever administrative costs accompany these 401(U)s, employers would be given tax incentives similar to those now offered to firms that open qualified pension plans. This new savings vehicle would provide a no-hassle option to millions of workers who have no employer-sponsored retirement account. It is designed not to replace existing employer-sponsored plans, which Al Franken would seek to promote as the savings vehicles of choice, but rather to encourage more employers to move toward sponsoring an employer retirement plan.

• Automatic, portable, easy – and workers keep control. Workers would automatically have a portion of their paychecks directly deposited into their 401(U), unless they explicitly opt out. Account funds would be invested responsibly in low-cost, diverse portfolios. And 401(U)s would be fully portable. Families would be free to withdraw funds from their URA after age 65, or at any time for education expenses or the purchase of a first home. 401(U)s would also preserve autonomy and choice. Workers could opt out of the program, or any of its specifics, at any time. They could also shape their account to fit their unique needs.

• Generous. Current tax deductions for retirement savings would be replaced with a generous 30% government matching contribution that would be the same for all households. For each dollar that a worker puts into a 401(U), the government would add 30 cents, up to a contribution limit similar to IRAs. The same 30% match would apply to existing retirement savings vehicles such as 401(k)s. This matching contribution would be deposited directly into workers' retirement accounts. The result for a great number of middle class workers would be a tripling of the incentive to save. Many more workers who currently get no incentive to save – because they pay no taxes – would receive a generous incentive. (The system would be designed to ensure that workers making less than $250,000 are held harmless.)

401K(U) is revenue neutral.