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Marco Rubio Calls for Opening Federal Retirement Plan to All Americans

May 12, 2014 - 6:00pm

Speaking at the National Press Club in Washington on Tuesday, U.S. Sen. Marco Rubio, R-Fla., offered a plan opening the Thrift Savings Plan (TSP), a retirement program that federal employees and members of Congress have access to, to all Americans. Rubio, who is a potential Republican presidential contender in 2016, also called for more private-sector options for Americans looking to save for their retirements.

The TSP, which is similar to a traditional employer-sponsored 401-k, allows federal employees to save pretax money for retirement, Rubio said. And it is one of the most efficient savings plans in America. It charges fees which are a fraction of those in most private defined-contribution plans, allowing beneficiaries to save more. So the twisted irony is that members of Congress who are employees of the citizens of the United States have access to a superior savings plan, while many of their employers the American people are often left with access to no plan at all.

That is why I propose we give Americans who do not have access to an employer-sponsored plan the option of enrolling in the federal Thrift Savings Plan, Rubio continued. Opening Congresss retirement plan to the American people will allow us to bring the prospect of a secure, comfortable and independent retirement into reach of millions of people.

Pointing toward his parents experiences, Rubio said the recent economic problems are hurting Americans efforts to save for their retirement, calling it a real and looming crisis for most generations.

I believe the American dream my parents lived is still possible, Rubio said. But among too many of our people, there is now a nagging sense that achieving it has become more difficult than ever. Financial security has faded for millions of Americans and with it the hope of a stable and secure retirement.

The troubles of the last few years have forced millions to put retirement on hold indefinitely. It has even forced some to cut their retirement short and re-enter the workforce, Rubio added. Each of the three legs of our traditional retirement stool personal savings, pensions and Social Security is wobbling. And if we do nothing, each of the three will likely cease to exist as we know them well before my generation enters retirement. The instability of each is caused by a variety of factors, yet they all share one common cause of decay: the lack of sustained economic growth.

While insisting current retirees would not be impacted by his proposal, including nothing his mother currently relies on, which is both Medicare and Social Security, Rubio called for the elimination of the Social Security payroll tax for retirees and ending the retirement earnings test for seniors who still work. Rubio also backed allowing seniors more options to buy insurance from private companies or from Medicare, insisting this was saving Medicare which, he noted, will face bankruptcy in 12 years.

There was once a time when talking about Medicare reform was a third rail of American politics, Rubio said. But as we get closer to impending doom, it seems more people are at least willing to discuss serious ideas about how to save Medicare. And any serious effort to save Medicare needs to first take a hard look at what recent reform efforts tell us about what works and what does not.

Rubio also insisted President Barack Obamas federal health-care law has hurt Medicare as well as the economy as a whole.

Obamacare turned 4 last month, Rubio said. It raises the iconic question: Are you better off than you were four years ago? The answer is an unequivocal no. Jobs have been lost. Hours have been cut. Employers have been forced to drop coverage. Premiums have skyrocketed. Millions have lost coverage they were happy with.

Obamacare has even hurt Medicare recipients by cutting about $156 billion out of Medicare Advantage, Rubio added. This cut was a grave miscalculation. Medicare Advantage is a shining success story that millions of seniors, like my mom, rely upon. In short, it allows you to receive coverage from a private provider using funding from Medicare. This has encouraged providers to compete for business by tacking on all sorts of value-added services for seniors. For example, one of the reasons my mom picked her current provider is because, in addition to good doctors, they pick her up and drive her to appointments.

Rubio said the increased options from private companies helped seniors.

This sort of competition in the marketplace invariably leads to two very good things: a decrease in prices and an increase in choices, Rubio said. Choice and competition are also at the heart of another Medicare success story: Medicare Part D. Through this market-based program, seniors have at least 28 different prescription drug coverage plans to choose from, and competition has worked as a powerful cost-control mechanism.

Rubio closed with a call to action from both parties and expressed optimism that there would be bipartisan support on his proposals.

The responsibility to save these programs belongs to all who are elected to serve, Rubio said. Yet many seem to have forgotten that we are here to pass policy, not posture politically. They forget that issues such as these are the why of politics, not merely optional dirty work. Partisan politics in America has always been contentious. But throughout our history, on issues of generational importance, our leaders have agreed to put aside politics for the sake of our people.

If ever there was an issue worthy of this solidarity, preserving a secure retirement for 21st century seniors is that issue, Rubio said. And should we fail to address it, history will point its finger at all who stood aside or stood in the way. Today, I have presented an agenda for addressing this crisis head-on. I am eager to work with anyone Republican or Democrat who will work in good faith on these reforms. Ultimately, I believe we will solve the retirement challenge before it is too late.

With Rubio offering praise to U.S. Rep. Paul Ryans, R-Wis., plans for Medicare reform, the Democratic National Committee (DNC) looked to link Rubio to the losing Republican presidential ticket back in 2012.

This afternoon Sen. Rubio renewed the GOPs commitment to ending Medicare as we know it, forcing future seniors to spend more out of pocket on medical care when they need it most," said Michael Czin, a spokesman for the DNC. In 2012, the Romney-Ryan ticket ran on that plan and it was soundly rejected by the voters. Sen. Rubios plan is just the latest example of the Republican Partys out-of-touch policies that benefit a few instead of extending opportunity for all.

Simply put Rubios position is backward, but what else should we expect from someone who has attracted brutal headlines in the last few days for valuing partisan ideology more than science? Czin added.

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