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Biden: CEO Pensions "Go First" (And Your 401(k) Will Go Next)

BEGIN TRANSCRIPT

RUSH: 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.

Now, we're not going to go get their salaries, we're not going to cap their salaries, although that's what they want to do, he didn't say that. We're going to get their pensions. Their pensions go first. Meaning what? We're going to take 'em. We're going to punish this evil greed that is making you angry and making you poor. Well, the only way to punish the greed that is making you angry and making you poor is to take Biden's pension away first. Biden has a pension as well, and he didn't talk about his pension to this audience. His pension is what's called a defined benefit option. It's backed by the US Treasury, which means that Joe Biden and Obama and everybody else in Congress is sheltered from the ups and downs of the stock market. He gets a generous pension no matter how bad liberal legislation screws up the economy for the rest of us. Biden also has the option of drawing his benefits earlier than private sector employees, with no penalty. His contributions accrue faster.

Now, the private sector greed that Biden attacks cannot hold a candle to the greed that liberals have for your tax dollars, as evidenced by Obama, who cannot wait to get his paws on your tax dollars, and Biden. This is striking! "Their pensions go first." He's going to take away people's pensions. If you let that happen, he can take away yours. Guess what. They are doing it in Argentina. They are nationalizing everybody's pensions. You stick with me on this, folks. The failures in the private sector are minuscule compared to the continued massive failures of Big Government. Everything they touch has unintended consequences and goes wrong, and they then get to act like innocent bystander spectators and point fingers at everybody else, and now they've got Greenspan up there agreeing that the free market screwed up when the free market had nothing to do with this economic mess. It was just the exact opposite.

So, Senator Biden, if anybody's pension deserves to go first, it should be yours. You are the person of greed. You're the person who's made how many millions of dollars over the last number of years and given $3,600 of it to charity? You and your liberal buddies, you go first. You give up your pensions. Show us some leadership, Senator Biden. You go first. You show us how it's done. You want to be fair, you'll get rid of your own pension, because you'll say, "What we have done up here has been a disgrace and we are resigning out of a sense of honor." Now, this is just part of this pension and 401(k) business. 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).

Now, we don't know if Obama would go along with this. The odds are pretty good that he would, because they have another plan. But now stop and think, here's Biden, they're going to take -- I don't care what you think of Big Oil, I don't care what you think of Enron -- the New York Times, by the way, is the Enron of media. They are now officially, according to Standard & Poor's, junk, on the very day they endorse Obama, they are junk. This just goes to show you propaganda does not pay. There isn't profit in propaganda. The New York Times is no longer the New York Times. Not what it was. They're losing advertising revenue, they're dropping pages, they're losing readers, circulation, and they are obstinate as hell about it, and now they are officially junk on the day they endorse Obama. So you can talk about all of this greed and all of this private sector greed and so forth, and they're going to go out and they're going to take some CEO's pension, his pension, their pensions go first? Next, your 401(k) is no longer deductible, and get this. This from James Taranto yesterday at the Wall Street Journal, Best of the Web today, and the headline of his piece here, "Are 401(k)s Safe from Congressional Democrats?"

Now, I could answer this in two ways. First, I know you're scared to look at your 401(k) statements when they come in, what's happened to this market. Are your 401(k)s safe from congressional Democrats? They're not safe from Democrats right now, folks, because Democrats have caused what we're all experiencing. The second answer to the question is the startling information in this story. "If you have a 401(k) or equivalent retirement plan, you've probably been watching nervously the past few weeks as your nest egg has shrunken owing to the current turmoil in the markets. Well, it could be worse. But don't take heart, for what we mean is it could get worse. The market turmoil has some politicians on Capitol Hill eyeing the end of the 401(k) as we know it. Workforce Management reports on a hearing of the House Education and Labor Committee earlier this month."

Listen to this. Look at me. "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. "The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation."

Now, the purpose of this plan is they think you'll go for this because you've seen these wild market gyrations, and you've seen your 401(k) plunge, so now they're thinking that you'll go along with the Social Security Administration running your private retirement plan at a guaranteed 3% a year. "The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated," so no longer would you get the deduction off the top of your income for whatever you contribute to your 401(k). The current system of tax breaks on 401(k) contributions and earnings would be eliminated. Teresa Ghilarducci, "I want to stop the federal subsidy of 401(k)s. 401(k)s can continue to exist, but they won't have the benefit of the subsidy of the tax break." So that's two people now that want to come along and take away the tax deductibility and subsidy of your 401(k). George Miller, who runs the committee, and some babe, professor of economic policy analysis at the New School for Social Research in New York.

"Ghilarducci outlined her plan last year in a paper for the left-liberal Economic Policy Institute, in which she acknowledges that her plan would amount to a tax increase on workers making more than $75,000--considerably less than the $250,000 Barack Obama has said would be his tax-hike cutoff. In addition, workers would be able to pass on only half of their account balances to their heirs," so that your 401(k) would be subject to the 50% death tax rate because the government's going to own it. The government's going to own your 401(k), and your 401(k) will guarantee you just 3% in government bonds administered by the government. Your private retirement account that the government set up and got you into, now they want to take over from you, just like Joe Biden wants to go out and make sure that these evil CEOs, their pensions go first. The concept that your money is your money will vanish when the Democrats take over Congress and Obama takes over the White House. All money will officially be government's.

Now, this is getting pretty brutal, so they had this babe up to testify before this committee, Teresa Ghilarducci, and she offered a sweetener. "Short-term I propose ... that the Congress allow workers to swap out their 401(k) assets, perhaps at August levels, for a guaranteed retirement account--just a one-time swap. ... How would this work? You go back to your districts and meet up with a 55-year-old who had had $50,000 in his account last month and now has $40,000 in the account. He can swap out that $50,000, valued in August, for that guarantee of what would become, if he retires at 62, a $500 a month addition to Social Security." So her plan is to have your 401(k) plan taken over by the government, invested by the government, the Social Security plan at 3%, and then your retirement is paid back to you in a Social Security check. Whatever your Social Security benefits are when you retire will be added to by whatever is in your 401(k). The point is that in your mind, if you go along for this, the government is in total charge of your retirement.

And the sweetener, the little hook here is for people to say, "Well, my 401(k) in August it was worth a lot of money, and now it's lost." Okay, we'll give you the August value. Your generous and benevolent government will give you the August value, and then they will take your plan and will put it in the Social Security Administration and will invest your plan in safe bonds at 3% a year, and then when you retire, that money in your 401(k) gets added to whatever your Social -- you get one check, your Social Security check. And in that check will be whatever your retirement account is, and you're essentially giving it up. You're essentially giving it up. By the way, gone also is any incentive to contribute to it, in terms of the subsidy you get off the top of your income for whatever you donate to your 401(k). Now, I don't want to totally alarm you here, it's by no means a certainty that Congress or Obama would embrace this proposal, but I'll tell you when you listen to them talk, this is the direction they're headed. You know they're going to come after pension plans. It's one of the largest sources of money out there, be it you California teachers, public employees, Teamsters Union, your pension plan, I guarantee you people like Obama and Democrats in the House are eyeing that as though it's theirs. Joe Biden, "Their pensions go first."

And then Buenos Aires: "A year ago, when leftist Cristina Kirchner was elected to succeed her husband Nestor as president, many Argentines hoped she'd follow a more conciliatory path ... But with gambits like Tuesday's proposal to nationalize private pension funds, the 55-year-old former senator has shown a combativeness that is every bit the equal of her husband's. Mrs. Kirchner justified the proposed seizure of $30 billion in pension assets by accusing the funds of having instrumented 'policies of plunder.' She said Argentina was setting an example of how to deal with the global financial crisis." So here's Argentina with a leftist nationalizing everybody's pension on the basis of people running the pension funds are crooks. Folks, if you don't take this election seriously, this is exactly the kind of stuff headed our way.

BREAK TRANSCRIPT

RUSH: By the way, this move down in Argentina by the new leftist president, Cristina Kirchner, to nationalize private pension funds is being fought. The citizens, there are all kinds of lawsuits being filed against her down here. People are not standing for this. Look it, Argentina, if I'm not mistaken is the country we always heard about in the late nineties as a model for how to reduce Social Security. That's right, Chile. Sorry, Chile. One South American country is like all the rest, I guess. I get them confused out there.

BREAK TRANSCRIPT

RUSH: The first hour contained a detailed explanation of plans that Democrats have to take your 401(k) away from you and give you the value of it before the market plunge and then put it into the Social Security trust fund, and your 401(k) then will be invested. It's not your private retirement account anymore. The government owns it, and they're going to guarantee you 3% growth every year with the purchase of government bonds. And therefore you give up all of the tax deductibility, you know, let's say you earn whatever it is, a hundred thousand dollars and you put whatever percentage of it into your IRA, then of course your adjustable gross income comes down. So you face a smaller tax payment while saving money. It's a government sponsored deal and everybody was happy with it. They're going to take all of that away and put the money in the Social Security trust fund, and then when you retire you'll get one check that represents your Social Security and whatever your 401(k) has matured to at 3% a year in one check.

Now, one thing I forgot to mention here on this is that IRA contributions drive down adjusted gross income. Using my example, you earn a hundred thousand dollars, and let's say you direct that $20,000 of it go to your IRA, whatever the maximum you can put away. For some plans it's 30% max, SEP/Keoghs up to a certain ceiling, but let's say just for argument's sake it's 20 grand, so therefore your adjustable gross income is reduced by $20,000 so you're going to have a smaller tax payment. Once they take that away from you, guess what? Your tax rate's going to also go up because your adjusted gross income is not going to have your IRA deduction, and guess what this is going to do? It's going to push more people into Obama's new tax increase bracket. It's going to push more people over the $250,000-a-year magic number. Right now this is not an Obama proposal, I want to make sure that you understand, this is a Democrat Party proposal, and they have been conducting hearings on this already, and the appropriate committee in the House and this plan has been advanced by a professor that they brought in, and they're intrigued by it. Democrats on the committee are intrigued by it.

In the meantime, we've also learned that Ted Kennedy, on his sickbed, has been working on national health care with lobbyists and senators from both parties. The want to rush this through and, quote, "Do it for Ted." The Ted Kennedy National Health Care Act in his honor. I predicted this would happen. Here it is. Who can oppose that if you're in Congress? After Ted Kennedy passes away, who in their right mind would oppose it? So this is happening. Your adjustable gross income is going to go up. You might make it now into Obama's $250,000 or more tax bracket where you will get an increase, and then Snerdley said, "What are they going to do with the money that they're putting in there? They going to build roads and bridges and so forth?" Snerdley, come on, roads and bridges? New social programs. They might build some infrastructure because there are gonna be a lot of people out of work, the government will hire 'em, it's going to FDR all over again. The "new" new raw deal.

END TRANSCRIPT

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