The obvious doesn’t always come easily.
By Michael Carroll
July 2001
Institutional Investor Magazine
The obvious doesn’t always come easily. For years politicians and pundits have warned about an impending retirement savings crisis in the U.S. With Social Security imperiled and most pensions less generous, Americans should be filling up their piggy banks. They’re not. Yet one solution - to increase the tax-advantaged amount that individuals can save via IRAs and 401(k)s - eluded Congress for years.
Why? Politics. Last fall Portman-Cardin, a bill raising the limits on annual contributions from $2,000 to $5,000 for IRAs, and from $10,000 to $15,000 for 401(k)s, won overwhelming bipartisan support, passing in the House of Representatives by a 401-to-25 count. But the measure, sponsored by Ohio Republican Rob Portman and Maryland Democrat Benjamin Cardin, stalled in the Senate when President Clinton threatened to veto the big tax cut bill that included it. Undaunted, the pair reintroduced their bill this spring for the fifth consecutive year and, in a coup, managed to get it passed as part of President Bush’s $1.35 trillion tax cut. Strikingly, it was the only portion of the tax package not crafted by the White House, which had vowed to scrap any efforts by legislators to Christmas-tree the tax cut. In “Coming Through in the Crunch,” the cover story beginning on page 48, Staff Writer Justin Dini explains how Portman’s close association with the Bush family over the past 20 years gave a big assist to his efforts. Now Portman is gearing up to play a role in Social Security reform and in cleaning up the tax code.
“Pension reform was nothing if not complicated, but Portman just loves taking on complicated problems and getting them solved,” says Dini, who has been covering pension issues for us since last fall, when he joined from TheStreet.com.
In-depth reporting on macroeconomics and matters of government policy, such as pension reform, has long been a core element in Institutional Investor’s editorial mission, in the U.S. and throughout the world. We look forward to adding vigor to that coverage with our new, London-based European editor, Tom Buerkle. Tom, who will oversee our editorial staff there while writing about politics and economics, joins us from the International Herald Tribune, where he most recently served as its international economics correspondent. During the mid-'90s Tom spent four years based in Brussels, which gave him profound insight into the challenges of European unification.
You can read Tom’s work in these pages or in our European edition, which can be reached through our Web site, institutionalinvestor.com.
