Obama touts new retirement accounts, pushes for minimum-wage hike in post-speech trip
West Mifflin – Moving quickly to fulfill his State of the Union pledge to assert executive authority on behalf of everyday Americans, President Obama on Wednesday used a visit to the U.S. Steel plant here to announce the creation of a new kind of retirement account for workers who are not offered one through their employers.
The appearance, which came just hours after Obama called for a federal minimum-wage increase during a stop at a Costco Wholesale store in Glenarden, Md., marked the beginning of a concerted White House push to meet a slew of policy goals while avoiding the political pitfalls of a polarized Congress.
Obama on Tuesday issued an executive order raising the minimum wage on new federal contracts to $10.10 an hour. The new retirement plan rolled out Wednesday at the steel plant came in the form of a presidential memorandum.
The issues represent the kinds of pocketbook concerns that Democratic Party leaders see as key motivators for voters in this year’s midterm elections. Obama demonstrated Wednesday that he intends to use his presidential powers to portray congressional Republicans as hostile to workers.
“Now, I’m hoping that Congress goes along with this, but I’m not going to wait for Congress,” Obama told hundreds of steelworkers, many of them sporting bright-orange hard hats.
The new MyRA accounts will allow Americans to invest a portion of their salaries into government bonds using accounts that will be treated like Roth IRAs, a common type of individual retirement account. Contributions could be withdrawn at any time, tax-free, and workers could save up to $15,000 before transferring the money to a traditional Roth IRA.
Taxpayers will be able to open an account with just $25 and can contribute as little as $5 per pay period.
Treasury Secretary Jack Lew told reporters aboard Air Force One that the new savings vehicle is a “very simple, very safe retirement account” that will satisfy a gap in the market.
“When you look at the landscape of the retirement savings market, this is really a space that’s not well served right now,” Lew said, adding that it will encourage people to set aside money over time. “And what we’ve learned is that when people start saving they get into the habit of saving and they ultimately save more and for longer.”
Congressional Republicans on Wednesday criticized Obama’s latest proposals, part of a strategy in which he has pledged to use a “pen and a phone” to accomplish his goals.
Senate Minority Leader Mitch McConnell (Ky.) said on the chamber floor that “the president mostly refused to budge from his failed policies” on Tuesday in his State of the Union speech and failed to exercise his executive authority in the most critical area: approving the Keystone XL pipeline that would transport heavy crude oil from Canada to the United States. Environmentalists oppose the project, arguing it will increase U.S. dependence on fossil fuels and accelerate climate change.
“For all his talk of phones and pens, he didn’t even mention using his pen to sign off on the Keystone pipeline,” McConnell said. “It’s the single simplest action he could’ve taken to create jobs.”
Obama’s appearances Wednesday followed his speech to Congress, in which he vowed to use his executive authority “wherever and whenever I can” to advance his agenda. White House officials have said that more executive actions would come later on a range of topics, such as broadband service in schools and job training.
The president argued Wednesday that even more-modest domestic policy proposals could have an impact on Americans’ lives.
“These are real, practical, achievable solutions to help shift the odds back a little bit in favor of more working- and middle-class Americans, so that if they work hard, they can get ahead and they can leave something for the next generation,” he said.
Obama chose to speak about the new initiative at U.S. Steel, White House press secretary Jay Carney told reporters, because the company’s employees have “exceptional or strong retirement benefits” and the administration hopes to extend those opportunities more broadly.
Earlier in the day, Obama tackled a separate economic question, calling on Congress to raise the nation’s minimum wage from $7.25 per hour to $10.10.
He made his pitch at the Costco in one of Washington’s suburbs, where the local government recently passed legislation to raise the minimum wage.
“I am choosing this to be a year of action because too many Americans are working harder than ever just to get by, much less get ahead,” he told a cheering crowd, saying the wages and incomes of ordinary people have not gone up in more than a decade.
Support for raising the wage for working families has picked up in the country, with five states increasing their minimum wages since Obama called for an increase in last year’s State of the Union speech.
In Maryland, Gov. Martin O’Malley (D) recently proposed raising the state’s minimum wage to $10.10 an hour. In 2007, Maryland passed a “living wage” law for companies contracting with the state.
Several local governments have also forged ahead, in some cases passing legislation to increase the pay of low-wage workers. District lawmakers voted last month to raise the minimum wage to $11.50 per hour by 2016, following the leads of Prince George’s and Montgomery counties in Maryland, which moved to raise wages by 2017.
Obama on Wednesday said he supported those local efforts.
“If you want to take the initiative to raise your minimum-wage laws to help more hardworking Americans make ends meet, then I am going to be right there at your side,” he said.