WASHINGTON (AP) — Even proponents of President Barack Obama's new retirement savings program readily concede it won't be a cure-all for a nation of people who are saving far too little for their golden years. Many Americans won't be able to participate initially, and those who do may find the benefits are modest.
Yet the Obama administration is hoping that the savings program — dubbed "myRA," for "my IRA" — will serve as a call to action, spurring Congress to take more sweeping steps to shore up retirement security as company pensions become a thing of the past. Given a presidential boost, like-minded lawmakers are already pushing new legislation to vastly expand the number of Americans who put away cash for retirement.
"This is a small first step," said Nancy LeaMond, AARP's executive vice president. "We think it is starting to generate a debate. Our hope is there can be action."
Aiming to help the roughly half of Americans with no retirement plan at work, Obama announced in his State of the Union speech Tuesday that the Treasury would create new "starter" savings accounts. The program is geared toward low- and middle-income Americans who lack the upfront investment that many commercial IRAs require. Starting with as little as $25, savers could invest a little each month in Treasury bonds and then convert the accounts into traditional IRAs once the savings grow.
The idea is actually contained in a broader retirement proposal that Obama has been asking Congress to take up for years in his annual budget request. Obama wants all workers to be automatically enrolled in IRAs unless they specifically opt out. Under one scenario, monthly paycheck deductions would be invested in bonds unless workers choose another option.
But Congress hasn't acted on the proposal. So Obama is carving out the part he can accomplish without Congress and hoping that by raising the issue, lawmakers will feel pressure to act and the remaining pieces will fall into place.
Call it a "me first, now your turn" strategy — not dissimilar from the approach Obama is taking on wages. The president is ordering a higher minimum wage for federal contractors in hopes that Congress will take the next step by raising the wage for all Americans.
"I could do more with Congress, but I'm not going to not do anything without Congress," Obama told workers at a Pennsylvania steel plant on Wednesday as he signed a presidential memo creating the myRA program.
Yet as with the minimum wage, the retirement program illustrates the severe limitations in what Obama can do to alter the economic reality for Americans when Congress refuses to go along.
Workers will only be able to open myRA accounts if their employers agree to participate in the program, at least initially. Although myRA has been in the works for years, the Obama administration said Wednesday it hasn't yet secured any commitments from businesses to offer it, and Treasury Secretary Jacob Lew offered no prediction for how many Americans might participate.
The White House said it was optimistic that since the program won't cost much to employers, businesses will be glad to take part. But because the program relies on paycheck deductions, businesses that don't use automatic payroll systems will be excluded unless and until the administration develops a new system for them to participate.
Leading providers of retirement accounts, including Fidelity and Vanguard, said Wednesday they were supportive of Obama's myRA program even though they were still studying the details. Still, there's scant evidence that Congress will take up the baton from Obama by making IRAs automatic.
Seeking to build on Obama's momentum, Sen. Tom Harkin, D-Iowa, who chairs the Senate's pension panel, plans to introduce a far-reaching bill Thursday that includes automatic IRAs. Previous attempts have stalled in both the House and Senate.
Rep. Richard Neal, D-Mass., who has been pushing automatic IRA bills for years, said he's already seen new interest in the wake of Obama's announcement.
"A couple of Republicans have already spoken to me this morning about it. They'd love to figure out how to embrace it," Neal said, declining to name the Republicans.
But after the calamitous rollout of Obama's health care law, skepticism is running high in Washington about big, new government programs — especially those that touch Americans' personal finances. And businesses are concerned about their own liability if employees who are enrolled involuntarily grow dissatisfied with how their investments perform.
"Similar to the concerns with health care, where you're trying to expand coverage, when you mandate options, you drive people to something that's not as good as what the private market is offering," said Aliya Wong, who heads retirement policy for the U.S. Chamber of Commerce.
WASHINGTON (AP) — A widening cheating scandal within the Air Force's nuclear missile corps is revealing systemic personnel problems in the force and is setting off high-level meetings to search for solutions.
For the first time, Defense Secretary Chuck Hagel summoned 15 of his top Air Force, Navy and nuclear mission leaders to the Pentagon, where they worked Wednesday to figure out whether cultural problems within the nuclear force make launch officers feel more compelled to cheat on their proficiency tests.
Pentagon press secretary Rear Adm. John Kirby said the officials spent the bulk of the meeting discussing the breadth of the problems, which include low morale, cheating and serious security lapses, and how to begin solving them.
"I think the general consensus in the room was that we all need to accept the reality that there probably are systemic issues in the personnel growth and development inside the nuclear mission," Kirby told Pentagon reporters after the two-hour meeting with Hagel. "The secretary made it clear at the end of the meeting that he intends to do these on a regular basis."
The cheating scandal is the latest revelation in a growing morass of problems among the men and women who maintain and staff the nation's nuclear missiles.
The number of officers in the nuclear corps who have been implicated in a cheating investigation has more than doubled to at least 70, officials said Tuesday. That means that at least 14 percent of all launch officers have been decertified and suspended from missile launch duties.
All are at Malmstrom Air Force Base, Mont., which is responsible for 150 Minuteman 3 nuclear missiles, or one-third of the entire Minuteman 3 force. The officials who disclosed the higher number spoke on condition of anonymity because they were not authorized to disclose the information by name while the investigation is ongoing.
It wasn't immediately clear whether the additional airmen suspected of being involved in cheating on proficiency tests are alleged to have participated in the cheating directly or were involved indirectly.
The meeting Wednesday included the heads of the Air Force and Navy nuclear weapons organizations, as well as U.S. Strategic Command, which is responsible for nuclear war planning and for oversight of the nuclear forces.
The Air Force announced on Jan. 15 that while it was investigating possible criminal drug use by some airmen, it discovered that one missile officer at Malmstrom had shared test questions with 16 other officers. It said another 17 admitted to knowing about this cheating but did not report it. The 34 officers had their security clearances suspended and they were taken off missile launch duty.
The Air Force has 450 intercontinental ballistic missiles, or ICBMs, on alert at all times, with a contingent of about 500 launch control officers, some number of which are unavailable on any given day due to illness or other reasons. So the number temporarily unavailable for duty because of the cheating scandal is substantial. It's not clear how that affects the mission, beyond requiring the remaining crew members to bear a bigger share of the work.
Each day, a total of 90 officers work in pairs inside 45 underground launch control centers, with each center monitoring and controlling a group of 10 ICBMs. They work 24-hour shifts in the missile field and then return to their base. They generally do as many as eight of these shifts per month.
The tests in question are designed to ensure proficiency by launch officers in handling "emergency war orders," which involve the classified processing of orders received through their chain of command to launch a missile. These written tests are in addition to two other types of monthly testing on the missile system and on launch codes.
Malmstrom is home to the 341st Missile Wing, which is one of three ICBM groups. The other two are in North Dakota and Wyoming.