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July 27, 2016 at 11:44 AM
The Democratic Party officially approved its platform at the Democratic National Convention on Monday in Philadelphia.
The Washington Post has called it “the most progressive Democratic platform ever.”
According to a UBS report, the proposals that Democratic presidential nominee Hillary Clinton has announced are “fairly modest from a macroeconomic point of view.”
“They would mostly maintain or extend changes implemented under President Barack Obama,” according to UBS.
Jeff Bush, of The Washington Update, again reminded not to “mistake platform for policy.”
“Obviously there’s a tremendous amount of red meat [in the platform],” he told ThinkAdvisor.
(Read how the Republican platform could affect financial advisors.)
ThinkAdvisor examined what the Democratic platform says about Social Security, the Department of Labor’s fiduciary rule, taxes and other issues that affect financial advisors. Here are five takeaways from the platform, and what experts in the industry are saying.
(Read the entire platform here.)
Social Security
The Democrats’ platform aims to protect and expand Social Security – and do so largely by raising wealthier Americans’ taxes.
“We will fight every effort to cut, privatize or weaken Social Security, including attempts to raise the retirement age, diminish benefits by cutting cost-of-living adjustments, or reducing earned benefits.
The Democrats vowed no changes in age or benefits, but what Bush found interesting was where the Democrats would expand Social Security.
The platform states, “Democrats will expand Social Security so that every American can retire with dignity and respect, including women who are widowed or took time out of the workforce to care for their children, aging parents or ailing family members.”
As Bush explained to ThinkAdvisor, the Democrats are getting rid of the gap years in a person’s Social Security work history.
“That’s certainly what it implies,” he added.
He also found it noteworthy that the democrats are basically saying “Social Security should be tied in with health care spending.
“The Democratic Party recognizes that the way Social Security cost-of-living adjustments are calculated may not always reflect the spending patterns of seniors, particularly the disproportionate amount they spend on health care expenses.”
Bush said many democrats were in favor of continuing to use the Consumer Price Index to calculate benefits, which is “not consistent with what they’re saying here” in the platform.
The platform is not ambiguous as to how it plans to fund Social Security.
“We will make sure Social Security’s guaranteed benefits continue for generations to come by asking those at the top to pay more, and will achieve this goal by taxing some of the income of people above $250,000,” the platform states. As Bush pointed out again, Social Security is a math formula with many variables.
“Democrats seem to be focused on only one of those variables,” he told ThinkAdvisor. “And that’s taxes.”
DOL Fiduciary Rule
In the Democratic platform, there is what Bush called an “obscure reference” to the Department of Labor’s fiduciary rule.
The platform states that “We will fight against any attempt by Republicans in Congress or on Wall Street to roll back the Conflict of Interest Rule, which requires that retirement advisors put the best interests of their clients above their own financial gain.”
There’s another nod to the fiduciary policy in the platform’s section on restoring economic security for the middle class.
“The Democratic Party believes consumers, workers, students, retirees and investors who have been mistreated should never be denied their right to fight for fair treatment under the law,” the platform states. “That is why we will support efforts to limit the use of forced arbitration clauses in employment and service contracts, which unfairly strip consumers, workers, students, retirees and investors of their right to their day in court.”
