Last week, the Senate Committee on Health, Education, Labor & Pensions (“HELP”) held a hearing on what Sen. Tom Harkin (D-IA), the HELP Committee’s Chairman, refers to as the “retirement crisis.” Sen. Harkin states that the “retirement income deficit” (which he defines as the difference between the assets people need for retirement and what they have available) is approximately $6.6 billion. The hearing was largely in response to Harkin’s report in which he outlines, in broad strokes, his plan to enhance retirement security. Sen. Harkin’s plan has two basic prongs: (1) strengthen Social Security and (2) create a new retirement fund option that will be government-run, but largely privately funded.
On the Social Security side, Sen. Harkin proposes to increase the benefits payable by modifying the formula for calculating benefits and improving the built-in cost of living adjustment for Social Security benefits. He also proposes to remove the