Presidential influence on the economy and the markets is weaker than they would have you believe, but especially during a new President’s first-year honeymoon, legislation and the bully pulpit can have an effect. So how would the remaining major candidates for the office address the looming issues that will affect retirement planning?
Sen. Hillary Clinton opposes Social Security privatization. She would mandate health insurance for all, subsidized by employers and the government, and pay for it by eliminating Bush Administration tax cuts for households earning over $250,000. Clinton supports reducing the estate tax but not eliminating it.
Clinton’s main rival for the Democratic nomination, Sen. Barack Obama, also opposes privatization of Social Security. He advocates a plan that would automatically enroll workers in a workplace pension plan, and employers who do not currently offer a retirement plan would be required to enroll their employees in a direct-deposit IRA account. Obama also is in favor of universal health coverage. He has voted against raising the estate tax exemption to $5 million, and against permanently repealing the estate tax.
On the Republican side, Sen. John McCain has voiced support for a partial privatization of Social Security that would include a mandatory investment in private accounts on top of the public fund. In addition, he favors a cut in benefits and a rise in the retirement age to offset the expected shortfall in Social Security. McCain favors a kind of portable health insurance that could be purchased within the states and would provide incentives to improve preventive healthcare. He does not support repeal of the estate tax.
Former Arkansas Governor Mike Huckabee remained in the hunt for the nomination as of press time. He would give retirees the option of a one-time Social Security payout, and eliminate all federal income taxes in favor of a national sales tax. His healthcare platform is meant to decrease the cost and improve the portability of private insurance through reforms, technology improvements, and tax breaks. He favors estate tax repeal.
Former Massachusetts Governor Mitt Romney, who had vowed to stay in the race until the Republican convention in early September, announced the “suspension” of his campaign on February 7.–Kara P. Stapleton