Max Baucus: “I rise to urge that Congress enact the Retirement Security and Savings Act, which has passed the House and been reported…”

“I rise to urge that Congress enact the Retirement Security and Savings Act, which has passed the House and been reported unanimously by the Senate Finance Committee. This is a balanced, bipartisan bill. It will encourage people to set their own money aside for retirement, by reforming the private pension rules and increasing the amount that people can put in an individual retirement account. It also will create two important new savings incentives. One is a tax credit for small businesses that set up pension programs for their employees. The other is a tax credit for low and middle income people who save for their own retirement. If, before adjourning, we can find a way to enact this bill, it will be a significant addition to the record of the 106th Congress. The American people have many wonderful qualities. But, these days, unfortunately, thrift is not one of them. During the last 20 years, personal savings rates have consistently declined, from 9 percent of GDP in the 1970s to less than 1 percent now. In fact, the preliminary net personal savings rate for August is the lowest rate since the Commerce Department began keeping records in 1959. So what? Why does this matter? In the first place, a low savings rate means that less capital is available for new investments. Perhaps that is not a pressing issue right now, with a booming economy. But it should be.”