Clinton to Outline Savings Proposal

President Clinton will announce today new retirement savings account proposals that will include a $300-a-year contribution for workers who earn $40,000 a year or less, White House and congressional aides said.

Clinton’s so-called USA Accounts plan is part of his strategy to strengthen the U.S. retirement system.

Some senators, however, say they’re concerned the initiative could discourage businesses from offering their own retirement savings plans. In addition, Republicans have competing retirement proposals.

Clinton’s announcement will offer the most detail so far on his retirement savings plan, which he outlined in his 1999 State of the Union speech. Roughly 100 million U.S. workers would be eligible.

Clinton would set aside 12% of anticipated budget surpluses over the next 15 years for the USA Accounts plan. That’s roughly $522 billion of the projected $4.35-trillion surplus over the 15-year period.

Clinton’s plan faces an uphill battle because Republicans who control Congress have their own priorities.

House Ways and Means Committee Chairman Bill Archer (R-Texas) plans to announce a Social Security plan by the end of the month.

Although the contributions for the plan Clinton will propose would come in addition to those made by workers to employer-sponsored 401(k) plans, some lawmakers say USA Accounts might discourage small companies from starting their own plans.

According to the Bureau of Labor Statistics, about 78% of those who work for companies with 1,000 or more employees enjoy some form of retirement benefit but that just 13% of those who work for smaller businesses get a company-backed retirement plan.