Will falsely suggested Sen. Clinton's support of tax credits for private retirement investment is new
Research ››› ››› BRIAN LEVY
George Will wrote that Sen. Clinton "stridently opposed" President Bush's "advocacy of personal accounts financed by a portion of individuals' Social Security taxes" and suggested that her recent proposal to offer a matching tax credit to families that invest in 401(k) retirement accounts reflects "an undisclosed epiphany," after which "she belatedly recognizes that 401(k) funds invested in equities are a foundation for security." But contrary to Will's suggestion, Clinton has long expressed support for tax credits for retirement investments, while opposing the diversion of Social Security payments into private accounts.
In his October 17 column, Washington Post columnist George Will noted that Sen. Hillary Rodham Clinton (D-NY) both "stridently opposed" President Bush's "advocacy of personal accounts financed by a portion of individuals' Social Security taxes," and recently proposed "a matching tax credit" for families that invest in 401(k) retirement accounts. Will wrote of Clinton's proposal: "After an undisclosed epiphany, she belatedly recognizes that 401(k) funds invested in equities are a foundation for security." But contrary to Will's suggestion, Clinton has long expressed support for tax credits for retirement investments, while opposing the diversion of Social Security payments into private accounts.
Clinton's idea for helping Americans save for retirement is this: Any family that earns less than $60,000 and that puts $1,000 into a new 401(k)-type plan would get a matching $1,000 tax cut. For those earning $60,000 to $100,000 the government would match half of the first $1,000. To pay for this, she proposes taxing people who'll be stoical about it - dead people - by freezing the estate-tax exemption at its 2009 level.
A conservative case can be made for something like this. It's a case for reducing the supply of government by reducing demand for it, and doing so by giving people ownership of enlarged private assets as a basis for their security. It's a case for raising the nation's deplorable saving rate and simultaneously encouraging economic literacy and temperance by giving more people a stake in equities.
President Bush made this case in his advocacy of personal accounts financed by a portion of individuals' Social Security taxes and invested in funds based on equities and bonds. Clinton stridently opposed him - and not just because she thought it would undermine Social Security's solvency and political support.
She also said it was a dangerous gamble that would make retirement insecure by linking retirement savings to the stock market - that investing retirement funds in the stock market was a "risky scheme."
Today her Web site calls her proposal a way to save for "a secure retirement." After an undisclosed epiphany, she belatedly recognizes that 401(k) funds invested in equities are a foundation for security.
During her U.S. Senate campaign in 2000, Clinton supported tax credits for people who put money in private retirement accounts. An October 30 New York Observer article quoted Clinton saying that Sen. Daniel Patrick Moynihan (D-NY) "really wants people to be able to save and have retirement security, and that's why I support the kind of retirement accounts that the President and the Vice President have proposed in slightly different forms, because I think that we should create means for people to be able to save and add to their Social Security benefits, and I support that."
Similarly, in an October 22, 2000, article, The New York Times reported that "Mrs. Clinton has recently endorsed a plan, modeled on [then-Vice President Al] Gore's, that would give tax credits to people who make less than $100,000 a year and put money away in special retirement savings accounts. Her plan limits the amount of money individuals can invest to $1,000 a year, rather than Mr. Gore's $2,000, and would cost about $120 billion over a decade, according to her campaign." And a November 5, 2000, Times article reported, "When it comes to retirement plans, Mrs. Clinton backs a scaled-down version of Vice President Al Gore's proposed retirement savings accounts." An October 2000 Manhattan Institute report stated that "Mrs. Clinton's supplemental retirement savings program, which she calls Retirement Savings Accounts (RSA), is the same as Gore's RSP [Retirement Savings Plus] program but with a maximum account size half as large -- $1,000 per individual, compared to $2,000 under the Gore plan." An October 9, 2000, Time magazine article described Gore's savings accounts as "voluntary, tax-free savings accounts similar to 401(k)s that can be used to supplement Social Security."
During the 2000 campaign, Clinton also rejected proposals to allow private investment of Social Security funds. A November 6, 2000, New York Daily News article reported that Clinton's Senate opponent, then-Rep. Rick Lazio (R-NY), "[f]avors [the] concept of privatization to let workers invest some of their Social Security money." By contrast, the Daily News reported that Clinton "[o]pposes privatization of Social Security as too risky" and that she "proposes creation of new Retirement Savings Accounts, which would feature automatic annual government contributions."
In 2006 Clinton again supported a proposal for the government to give tax credits for retirement savings. In a July 2006 report, the American Dream Initiative, which Clinton chaired, laid out a "new opportunity agenda." Among the report's recommendations was a "Saver's Credit":
Instead of more breaks for those at the top, we should provide saving incentives to hard-working Americans who can least afford to put money aside. We should make the Saver's Credit permanent and refundable so that working- and middle-class families receive a 50 percent matching contribution for retirement savings of up to $2,000 a year.
Running regularly in at least 1,377 English-language daily newspapers in the United States, Will appears more frequently than any other syndicated columnist, as Media Matters for America documented.