psst! Representative Noriega, the economy has caused a complete paradigm shift for older Americans and working families. It is predicted that deflation and global economic weakness will extend until 2010. Even when recovery starts, there will be a several year lag before normal people will feel the effects. How do we protect people planning retirement right now, or in the next several years, whose 401k's and other pension plans have already devalued and will remain so for maybe another five to ten years.
Noriega: "We're all faced with it. Our 401k's have become 201k's. Especially those who are looking to retire in the next few years and who are not prepared to work another five to ten years to regain all that value they have lost.
I think first, we must restore confidence in our financial system and bring back balance and the regulatory components to restore trust to the taxpayers and [regulate] those poisonous products, and hedge funds, and derivatives on Wall Street that promised to police themselves and didn't. We want government to be an honest broker of checks and balances and not to allow runaway greed to rule the day. This requires both domestic and international regulatory measures.
We also need to keep people in their homes. I support giving bankruptcy judges the authority to keep people in their homes who previously had good credit, have a job, and are making good faith effort to make payments.
Another way to restore confidence in the system is to restore accountability and to call out the those who were egregious in their greed and proceed to prosecute people. When we have people taking our tax dollars and going off on junkets and getting manicures and massages, we have to act to restore faith in our system both domestically and internationally. We must demonstrate through prudent action that we are serious about right our house.
These things are essential to seeing the system recover. Another thing is that in addition to having a growth component in our economy, there also is a cut-back component. In my opinion, that means getting our men and women out of Iraq as quickly and safely as possible to save around $120-billion a year. And, we've got to get our health care reformed so that it saves government both locally and nationally.
As a government, we must got to get back to pay-as-you-go. The new energy economy is a way to stimulate jobs and job growth, and investments in small business helps to create jobs.
Again. grow our economy in conjunction with correcting our misplaced priorities on the spending side."
psst! Let me pursue the 401k issue a bit further. Even if things you outline and recommend do happen, we're still looking at a long-term window where those people who would like to retire and who have seen their 401ks, IRAs, or other pension plans decimated and who recognize that it will take some time to recover those losses. Would you support a measure, or temporary change to the tax code, for a specific period of time that would hold in abeyance the "draw-down" requirement at age seventy-and-a-half for 401ks?
Noriega. "Yeah, I think we have to look at all aspects, whether it's freezing penalties, or other options, such as you mention, and allowing withdrawals from IRAs, or other things to prevent massive losses from retirement accounts. I think we need to put all those on the table."