Writing in U.S. News and World Report on October 23, 2008, Would Obama, Dems Kill 401(k) Plans?, James Pethokoukis said:

I hate to use the “S” word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers’ retirement accounts (Efharisto, Fausta’s Blog). Now, even Uncle Sam isn’t that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans.

House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created “guaranteed retirement accounts” for every worker.

The next day, October 24, 2008, Rush Limbaugh said on his radio program:

I want to talk to all of you who have 401(k)s or SEP/Keogh plans, some kind of pension plan or retirement plan. The first thing I want to do is share with you something that Joe Biden — he the one given to rhetorical flourishes, according to Obama — on the campaign trail in Colorado, and he was out there doing full-fledged Democrat Party playbook 101. He promised a full-scale attack on corporate greed if he and Obama win. Biden vowed to target executives of failing companies who draw big salaries. “Their pensions go first,” he told the cheering crowd. Now, folks, I want you to stop for a moment and very seriously consider what you just heard Joe Biden say. Here he’s got a roomful, an auditorium full of rabid Obama supporting Democrats, they are there for whatever reason, they support Obama, they are filled with class envy, and here is Joe Biden telling this crowd that these CEOs of failing companies who draw big salaries, we are going to go get their pensions.

Rush warned against thinking this will only affect CEOs. Your 401K will be next:

I want to remind you, two weeks ago Congressman George Miller from California who chairs some congressional committee, big Democrat, been there for ages, said, “We’re going to have to do something about the tax deductibility of contributions to people’s 401(k)s because government’s losing money. We’re losing money on this,” so he’s going to propose eliminating the deductibility of whatever you contribute to your 401(k).

“A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. … Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the US government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration.” In other words, there is a plan that the Democrats are considering to convert your 401(k) to the Social Security Administration, your 401(k) then administered by the SSA, your private retirement plan becomes owned by the government.

Rush played a sound bite by Ghilarducci and then gave his comment:

GHILARDUCCI: And what’s amazing about this is that it’s actually, um, doesn’t cost the government anybody. (sic) I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.

RUSH: Spreading your wealth. But did you also notice the amazing thing is it doesn’t cost the government any money! It doesn’t cost the precious government any money! It’s gonna cost you money.

On November 5, 2008 a caller to the Rush Limbaugh show ask about the Democrats plan for her 401K. Here is the transcript of that call:

RUSH: Here’s Darcy in Dallas. Darcy, it’s nice to have you on the Rush Limbaugh program. Hello.

CALLER: Hello, and dittos from Dallas.

RUSH: Thank you.

CALLER: I need a little bit of education. I thought you might be the perfect person.

RUSH: Fine.

CALLER: (giggles) I thought there would be enough people with common sense so I wouldn’t have to ask this, but can we address this whole thing about my 401(k) and everybody else’s going away?

RUSH: Can you answer a question for me first?

CALLER: Sure.

RUSH: Do you know what’s going to happen to you? We don’t know what’s going to happen, but do you know what the Democrat plan for your 401(k) is?

CALLER: I believe it has something to do with circling the bowl.

RUSH: (laughing) Circling the bowl. You mean like flush it?

CALLER: Yeeeees.

RUSH: But seriously, how much do you know about it? You’ve just heard about it, or you want me to repeat what you know to other people?

CALLER: Please repeat, because like I said, since I knew I wasn’t going to vote for Obama, I said, “I don’t need to worry about it.”

RUSH: Let me give it to you very briefly. So far, this is not Obama yet, but this goes straight to my point about all of the idiots on our side and in the media expecting Pelosi and Reid and Obama and everybody to govern from the center. The 401(k) was a central plan, a central tenet to get people to save for their own retirement in addition to Social Security. It came into play during the Reagan years, and it was designed to supplement your own investment program, dollars that you have earned in a retirement plan that was independent of Social Security. And, of course, the way it works, your company offers you the 401(k). You can take a percentage of the gross, your gross pay every month and put that in your 401(k). It reduces your taxable income.

George Miller, who heads the House committee that deals with 401(k)s, about a month ago said, we have to eliminate this tax subsidy. The government is losing $80 billion a year. We can’t afford to lose this kind of money. There are too many people that don’t need this tax break anymore. So what we’re going to do, we’re going to take away the whole notion that you get to deduct from your gross whatever you contribute to your 401(k). The government needs that money. So one of the big incentives for having a 401(k) came under assault. Then that same committee two weeks later brought in an economist from the New School in New York called Teresa Ghilarducci. I’m having trouble with her name, and not on purpose but her idea is even worse, Darcy.

She wants to basically eliminate the 401(k), and the way she wants to do it is she wants to go to people who have a 401(k), who have seen its asset value plummet because of the market plunge. So she wants to go back to August levels. Everybody that has a 401(k), we’ll take you back and we’ll give you money. We’ll restore the value. The government will. We’re just going to print some money here, and we’re going to restore your 401(k) to its August amount. Then we’re going to take it. We’re going to take your 401(k), and we will put it in your Social Security account that the government is monitoring for you, and we will invest every year 3% in government bonds. We’ll buy government bonds so that your 401(k) will grow at 3% every year adjusted for inflation. The most that you will be able to contribute to your 401(k) every year is 5% of what you earn.

And then when you retire, your 401(k), and plus there’s a $600 annual addition that she formulates here because she finds it inequitable that some people get a 36% tax deduction and some don’t because the various income tax rates that affect how much of a deduction you get. So the bottom line is, they’ll take your 401(k) and put it in Social Security. They give you 3% a year plus 5% of your gross added, and then at the end when you retire, you get one check. Your Social Security check plus whatever your 401(k) is. The government takes over your 401(k). Not so much flushes it, they just take it, like they’re going to take some pension money. Now, this is not centrist. This is not moderate. This is George Miller, and this is the kind of thing that Reid and Pelosi will go for.

I don’t know where Obama will stand on this, but the odds are that it will sound attractive to him because these people are all about expanding government coffers. And that’s what they’re going to do. So that’s what’s ahead for people’s 401(k)s if the Democrats get their way. They may not, but that’s what their planning is. And it’s a great indication of where we’re headed, and this was all known by people who listen to this program. The Drive-By Media didn’t talk about this because they knew that it would be devastating.

Now fast forward to last Wednesday, February 17, 2010, and this article in Investor’s Business Daily:

Class Warfare’s Next Target: 401(k) Savings

You did the responsible thing. You saved in your IRA or 401(k) to support your retirement, when you could have spent that money on another vacation, or an upscale car, or fancier clothes and jewelry. But now Washington is developing plans for your retirement savings.

BusinessWeek reports that the Treasury and Labor departments are asking for public comment on “the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams.”

In plain English, the idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.

They will tell you that you are “investing” your money in U.S. Treasury bonds. But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds.

We can invest our 401K in U.S. Treasury bonds on our own, voluntarily. We don’t need the government forcing us to do it. But that’s not the point. The point is for the government to get control over the money we worked for and chose to save rather than spend.

This comes at a time when Obama and the Democrats have so over-extended the government deficit they may soon no longer be able to finance their wild spending by selling government bonds. The foreign governments that have been buying them are getting skittish, and the demand for U.S. Government debt is declining. The politicians need more money to spend and the billions, perhaps trillions, sitting in private 401K plans look like low-hanging fruit.

El Rushbo was, as always, a prescient prognosticator:

This proposal follows hearings held last fall by House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee focusing on “redirecting (IRA and 401k) tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute,” as reported by InvestmentNews.com.

The hearings examined a proposal from professor Teresa Ghilarducci of the New School for Social Research in New York to give all workers “a $600 annual inflation-adjusted subsidy from the U.S. government” in return for requiring workers “to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration.”

If you are retired or if you think you might be retired someday, this is especially important for you. More from the same article in IBD:

This is just the latest chapter in what is developing into a war by the left on America’s seniors. All that class-war rhetoric about “the rich” ends up targeting seniors, who tend to have accumulated the most in savings and investment on average because they have been around the longest.

President Obama, House Speaker Pelosi and Senate Majority Leader Reid targeted seniors for hundreds of billions in Medicare cuts to finance expanded Medicaid for the poor and other new entitlements in the ObamaCare health care takeover legislation. If you liked your health insurance, you were supposed to be able to keep it, except for the 25% of seniors who had chosen Medicare Advantage private health plans for their Medicare coverage.

Even the Medicare actuaries estimated that most of those seniors would lose their Medicare Advantage coverage because of all the ObamaCare cuts for those plans. Obama has even begun rationing for seniors under Medicare by slashing payments to heart and cancer specialists serving seniors under that program.

The major author of the plan to steal our 401K’s, Teresa Ghilarducci, has had the chutzpa to write a book with the title: When I’m Sixty-four: The Plot Against Pensions, And The Plan To Save Them. Written by the plotter in chief.

Now and in the past all of your contributions to your 401K are voluntary. You own every dime in your 401K, you can take it out when you retire, and when you die you can leave what’s left to your family. Isn’t it funny that when the government owns it your contributions will cease to be voluntary and will be mandatory. They know that if it’s not yours you won’t voluntarily contribute to it.