President-elect Donald Trump’s victory was fueled by a broad working-class coalition of voters — the most diverse group to elect a Republican president in modern history. Trump made inroads across the map, but his biggest gains were found in blue-collar strongholds and economically distressed areas.
With a remarkable victory, it will soon be time to govern and honor the promises made to voters. That starts with ensuring that millions of left-behind workers have access to proven tools to build wealth, achieve financial security, and retire comfortably.
Like most rich people, Trump isn’t wealthy because he earns a high salary. He owns things, and asset ownership is the key difference between getting ahead and simply getting by.
A shining example of this is found in retirement savings. Retirement accounts are the top source of aggregate household wealth in the U.S., exceeding even home equity. But there’s a problem: millions of workers are completely left behind because they don’t have access to retirement benefits through their employer.
A recent analysis indicates that nearly 53 million Americans, including more than 41% of full-time workers, don’t have access to workplace retirement plans. This is a particularly severe challenge for low-income workers, a staggering 85% of whom lack access to retirement benefits. In total, 28% of adults have nothing saved for retirement, posing a huge strain on our social safety net and undermining faith in the fairness of the American economy.
Sure, the government tries to encourage retirement savings through generous tax benefits, but these incentives are poorly targeted to low, and moderate-income workers, in large part because so few enjoy access to workplace retirement plans in the first place.
As a result, the U.S. manages to spend over $200 billion each year on retirement incentives only to see 1% going to workers in the bottom income quintile — the very workers least likely to have adequate savings.
This is an upside-down system that Trump can fix with his congressional allies.
A bipartisan group of lawmakers offers a solution modeled after the very retirement benefits they enjoy as federal workers: the Retirement Savings for Americans Act, a concept first proposed by Trump’s own former economic adviser, Kevin Hassett.
Led by my former colleagues in Congress, the RSAA tackles both sides of the retirement problem by expanding access to retirement accounts and enacting incentives specifically to reach left-behind low-and moderate-income workers.
The bill provides any worker without employer-sponsored retirement benefits the opportunity to enroll in a tax-advantaged program modeled after the enormously successful Thrift Savings Plan for federal workers. Once enrolled, low- and moderate-income workers will see their contributions matched up to 5% of their income through a refundable tax credit deposited directly into their accounts, providing a powerful incentive to work and save.
Eligible workers have full control over whether or how much to contribute. The accounts belong to the worker and are fully portable, and the assets workers build can be passed on to future generations. And, critically, top private investment firms would compete to manage these assets and ensure they grow by utilizing a simple, transparent menu of investment options and low fees.
By bringing tens of millions of left-behind workers into the retirement savings system, the RSAA would spark a boom in wealth for American families unlike anything in recent memory. Those excluded from the system today would have a direct stake in the success of the U.S. economy. After only a single generation of savings and compounding, the results would be transformative.
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In an era of deep political division, the RSAA is proven to be uniquely broad-based in its appeal. It is ambitious, pro-worker bipartisan legislation that unites powerful organizations like the AARP, business leaders such as Charles Schwab, groups like the U.S. Conference of Mayors, and prominent progressive and conservative economists.
The pieces to solve America’s retirement crisis are in place. What is missing is bold leadership to get it done. By making asset ownership a reality for tens of millions of workers, President Donald Trump will cement his legacy as a transformational leader on behalf of the left-behind men and women who sent him back to the White House with an overwhelming mandate for change.
Cory Gardner (R-CO) is a former United States Senator from 2015-2021 and a Member of Congress from 2011-2015
This article was originally published at www.washingtonexaminer.com
