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.
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?
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?
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.