Obama touts wage hike, creates 'myRA' savings plan

Published on NewsOK Modified: January 29, 2014 at 8:57 pm •  Published: January 29, 2014
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WEST MIFFLIN, Pa. (AP) — Declaring that hard work should pay off for every American, President Barack Obama on Wednesday signed an order to create starter retirement accounts that could be opened with as little as $25 but acknowledged there's a limit to the help he can give low-wage workers without congressional action.

Obama followed up Tuesday night's State of the Union address by traveling to two workplaces to drive home the message from a pair of proposals aimed at boosting the personal finances of working-class Americans.

Obama visited a Costco food warehouse in suburban Lanham, Md., where entry-level employees start at $11.50 an hour, to tout his call for a $10.10 minimum wage. At a U.S. Steel Corp. plant outside Pittsburgh, he signed a presidential memorandum to create the "myRA" program, which he told employees would go toward "making sure that after a lifetime of hard work you can retire with some dignity."

Obama was trying to tap into Americans' frustrations with Washington that has been gridlocked amid partisan debate and an economy that's been slow to rebound from the recession. He accused Congress of wasting time when Americans need action.

"I could do more with Congress, but I'm not going to not do anything without Congress, not when it's about the basic security and dignity of American workers," Obama said.

The president then sat a wooden desk set up in the cavernous factory and signed the memorandum, then took it off stage and handed it to Treasury Secretary Jacob Lew, with a pat on the shoulder. Lew's initial task is to set up a pilot program with accounts available through some employers by the end of the year.

The program will operate like a Roth IRA, so contributions of as little as $5 per paycheck would be made with after-tax dollars. That means account-holders could withdraw the funds at any time without paying additional taxes. The funds would be backed by U.S. government debt, similar to a savings option available to federal employees. Investors could keep the accounts if they switch jobs or convert them into private accounts.

"We think this fills a space that, very importantly, we can do by our own authority," Lew told reporters aboard Air Force One en route to Pennsylvania. The idea is to encourage some of the millions of Americans who do not save for retirement to begin putting aside even small amounts of money. "When people start saving they get into the habit of saving," he said.



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