Skip to main content

Republicans Just "Protected" The Working Poor From Being Able To Retire

The Senate voted to repeal an Obama-era regulation that permits states to set up retirement accounts for low-wage workers.
You're safe now from having to ever stop working. You're welcome.

You're safe now from having to ever stop working. You're welcome.

American workers have been getting the shaft for years when it comes to retirement benefits. Defined benefit pensions (which provide a guaranteed amount regardless of market conditions) have largely gone the way of the dinosaurs, and many workers, especially those in low-paid jobs, have no retirement benefits at all other than their Social Security. On Thursday, Senate Republicans made sure that the insecurity many Americans feel over their retirement will now be worse.

The Senate voted 50-49 to roll back an Obama-era rule that would allow states to create retirement accounts for low wage workers in the private sector who don't get retirement benefits from their employers. The measure was previously passed by the House in February and it now goes to Trump's desk for a signature.

Under the soon to be repealed rule, states could set up auto-enrollment IRAs for private sector employees. Those employees could then contribute to their IRAs via payroll deductions. The state would administer the plans and would be responsible for investing employee contributions or with providing employees with a list of investment options.

You can literally count on the fingers of one hand the number of Republicans who opposed the bill in both chambers: two. Ileana Ros-Lehtinen of Florida voted against it in the House, and Senator Bob Corker of Tennessee was a "nay" vote in the upper chamber. No Democratic senators supported the measure, and only one Democrat approved of it in the House, Henry Cuellar of Texas, who votes with Republicans on many issues.

The rule, which went into effect in October 2016 was cited as an example of "federal overreach" by Senate Majority Leader Mitch McConnell.

"Under the guise of helping more people save for the future, it undercut a system of private retirement savings that has served millions of Americans very well for decades," McConnell said. "The end result would be more government at the expense of the private sector."

What McConnell is saying is that the rule threatens some of the people and institutions that are big Republican donors -- banks and other companies that deal in retirement instruments such as IRAs and 401Ks. And it is the same nonsense argument that Republicans and their libertarian cousins have offered for their opposition to Social Security over the years; the notion that everybody should show the "personal responsibility" to manage their own retirement.

The folks who stand to make a buck off of your retirement savings have been complaining about the rule since the Obama administration proposed it. The American Retirement Association, a lobbying group for the retirement account industry, whined in 2015 that the rule gives states an advantage over private financial institutions because the rule exempts states from the provisions of ERISA, the federal law that sets minimum standards for private sector pension plans.

This rule was an example of government doing one of the things it is charged with doing in the Preamble to the Constitution -- promoting the general welfare by providing retirement security to a group of people who currently don't have much. But by letting those people have access to state-run retirement plans President Obama was taking money out of the pockets of the GOP donor class. And to Republicans about the only thing they like for the government to do other than fight wars is help out the people who contribute to Republican campaigns and no one else.