There was little that hadn’t already been touted by the nation’s 43 rd president. On Social Security, the Administration continues to promote the availability of voluntary personal retirement accounts for younger workers, while restating that there would be no changes in benefits for those currently in, or nearing, retirement. Additionally, he has restated that there would be no increases in the Social Security payroll tax. Still, Bush notes that, “…we must fix Social Security permanently for our children and grandchildren,” cautioning that without action, “…Social Security will be unable to pay the benefits promised to our children and grandchildren without enormous payroll tax increases.”
Noting the increased benefit and contribution limits provided by the Economic Growth Tax Relief and Recovery Act of 2001 (EGTRRA), the Bush Administration has reiterated its support for three “new” retirement programs – the Retirement Savings Account (RSA), Lifetime Savings Account (LSA), and Employer Retirement Savings Account (ERSA) – that it touted earlier this year (see They’re Baaaack, Again! ) and in 2003 (see ERSAs Bear Major Changes for Plan Sponsors ).
Both the RSA and ERSA have been promoted as efficient ways to consolidate a variety of existing savings vehicles: the RSAs for Individual Retirement Accounts (IRAs), and the ERSA for numerous employer-based retirement plans, including 401(k)s, 403(b)s, and 457 programs. However, industry groups have claimed that the expanded individual savings opportunities for small business owners in the new proposals might well discourage those businesses from establishing an employer-sponsored alternative (see ERSA Redux “Better,” But Doubts Linger).
On health-care, the Bush Administration continues to promote Association Health Plans as a means for small businesses to band together to provide more affordable health care for their employees (see DOL Pushes Health Insurance Alternative for Small Biz ). Additionally, the newly created Health Savings Accounts, or HSAs, are noted as a cost-effective way for small business employees to save and pay for their health-care needs (see Treasury Department Out with HSA Technical Guidance ), Treasury Department Adds HSA Information On Web Site ).