THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, April 20, 1996 TAG: 9604200021
SECTION: FRONT PAGE: A12 EDITION: FINAL
TYPE: Editorial
LENGTH: Short : 47 lines
President Clinton has proposed legislation to make retirement finances more secure for many Americans. The proposal could be considered a companion piece to the Kennedy-Kassebaum reforms aimed at giving workers between jobs or with pre-existing conditions access to health insurance. Both recognize that there's widespread anxiety about health and retirement security in a volatile economic environment. They don't seek to stop change but to cushion its effects.
The Clinton proposals would simplify 401(k) plans that permit workers to defer taxes on retirement savings. Now, cumbersome regulations make the plans too costly for many small businesses and prevent some employees from taking full advantage of them.
Clinton also questions a one-year waiting period for new employees. Employers argue that most turnover is in the first year of employment and that processing paperwork for employees who enter plans only to exit them within a few months is prohibitively expensive. But why not let individual employers decide that?
By enabling more people to save more for retirement, the reforms would help them and provide a spur to the economy. Americans are notorious for how little they invest. These measures could help.
Of course, the Clinton proposal is more of a campaign promise than a likely legislative accomplishment. Virginia's senior U.S. senator, John Warner, is persuaded that little legislation of substance is going to be produced by Congress for the rest of this year. The next Congress and president (who may or may not be Clinton) will probably decide whether laws governing health care or retirement plans will be reformed.
But election years are times for setting agendas. If Clinton runs on a platform aimed at making health insurance more portable and accessible and making saving for retirement simpler and more rewarding, many will applaud.
At a time when the middle class is squeezed, employment is insecure and medical costs are unaffordable, those issues cut deep. Republicans can't make them go away, but they could help address them - and disarm Clinton - by joining in bipartisan legislation. by CNB