How a Hillary Win Means Government-Run 401ks

Clinton reportedly considering Blackstone's James for Treasury Secretary

Is it a march toward Obamacare for retirement plans?Is it a march toward Obamacare for retirement plans?

It appears the high-dollar speeches to Wall Street firms paid off after all.

Hillary Clinton is reportedly considering Tony James for Treasury Secretary (should she win). Besides his role as the president of high-flying investment house Blackstone Group, he’s also a co-promoter of Teresa Ghilarducci’s novel Guaranteed Retirement Accounts idea.

The plan, according to International Business Times, would give “financial firms control of hundreds of billions of dollars in retirement savings,” Blackstone among them, by replacing voluntary 401(k)s with a “single national system, and much of the mandated savings would flow to Wall Street.”

James first outlined the retirement savings initiative in a speech a year ago to the Center for American Progress (CAP), and he joined Ghilarducci in a bylined piece in the New York Times shortly after. It immediately sent a shudder through the 401(k) industry, advisors no exception.

“It is a plan that proponents say could help millions of Americans—but could also enrich another constituency: the hedge fund and private equity industries that Blackstone dominates and that have donated millions to support Clinton’s presidential bid,” writes IBT.

The papers describes James as a “Washington power player” who reportedly turned down a slot in President Barack Obama’s cabinet. Clinton attended a fundraiser at James’ home in New York in September. The 30 people there raised between $50,000 and $100,000 per head.

“It’s an improvement on the 401(k) system, which isn’t close to being what’s needed,” Ghilarducci told 401(k) Specialist when describing the proposal in May. “It’s like we’re picking up the toddler, and helping this immature, underdeveloped child over the puddle and to the curb.”

She added that there’s “no indication that the 401(k) will ever include everyone, reduce fees to where they are appropriate, match long-term investing with long-term needs or provide fully for lifetime income. We need something that’s mandatory, with no leakage, and that’s what this is.”

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