Hidden in the Reconciliation Bill, a Mandate

Michael Smith on the Open Thread: “‘Found this interesting. Tucked in the reconciliation bill they want to mandate employers with 5+ employees to contribute up to 10% to an IRA. Failure to do so is ‘taxed’.” 

Hidden In The Reconciliation Bill: A Retirement Plan Mandate That Will Take Most People By Surprise, Forbes, Elizabeth Bauer, September 25, 2021

“Under the proposal, starting in 2023, employers with five or more employees would have to offer a retirement plan and automatically enroll employees, diverting 6% of their pay to a retirement account. An automatic escalation clause would increase the automatic contribution to 10% of pay by year five. The default plan would be a Roth IRA invested in a target-date fund, a mix of investments based on your expected retirement year.

“For employers, it’s a mandate. They would have to offer the plans. Employees would be able to opt out.”

I found this to be an interesting comment. Nothing wrong with it or the author. It does raise a point in my mind.

We have issues with retirement, Social Security needs a hit and health care needs a hit to make it equitable for all. Both Social Security and Medicare are successful government programs. Why not expand Medicare and transform it into Single Payer eliminating much of the commercial waste and fix the Social Security Trust Fund.

Social Security payouts supposedly drains the TF by 2034. If we keep killing ourselves off by contracting the Covid-19 virus, we may see another year in TF longevity.

Why feed Wall Street when they will take their cut, which they take now, with 401Ks. IRAs, etc.? Providing better Social Security at 2% more withholding for an employer and 2% for employee “could solve much of the retirement issue and another 1% or 2% for Medicare. Treasury Bills are far safer than a Wall Street which takes their profits regardless of an investment being profitable or not.

We can not afford an increase in SS withholding or provide better healthcare for all; but, we can provide Wall Street charity? And it is a giveaway.

Why feed Wall Street when they still owe us for 2008?