Sens. Gordon Smith (R-OR) and Kent Conrad (D-ND) announced yesterday their plans to introduce a Retirement Savings and Security Act, which they could unveil as early as next week. The purpose of the bill is to promote automatic enrollment of workers into company 401(k) plans, in order to minimize the risk of future generations outliving their retirement income. The bill could possibly produce 5.5 million new 401(k) participants over the next five years. The bill would also make changes to the saver's credit, a tax credit for low- and moderate-income workers who contribute to retirement plans and IRAs created under the Economic Growth and Tax Relief Reconciliation Act of 2001. Conrad said, "We think this can and will be passed this year."

Rep. Jim Gerlach (R-PA) has joined the long list of Republican opponents to President Bush's plan to reform Social Security. In a letter to Pennsylvanians United, Gerlach stated, "I am opposed to the President's PRA proposal and my focus is on finding other ways to [resolve the unfunded liability]." (more info here). Despite continuous opposition, Congressional GOP leaders seem bent on pushing legislation through. Tom DeLay (R-TX) said yesterday that Democrats "are obviously playing politics. They have decided that they're not going to participate and that creates a very difficult approach to getting the bill done." It is obviously not Democrats alone who are refusing to participate in discussions for reforms which include private accounts.

This June 7 editorial in the New York Times - The Bush Economy - is extremely pertinent to some of the tax reform legislation being considered by Congress right now. The article points out that if all of Bush's tax cuts are made permanent, in ten years people making between $100,000 and $200,000 will pay five to nine percentage points more of their income in federal taxes than those making over $1 million per year. Those making less than $80,000 per year will see their share of taxes rise slightly or stay the same. As the article says, at this level the tax cuts are about "giving more money to those who have nothing to do with it except amass enormous estates for their heirs." And some of the current legislation being considered by Congress is unfortunately not helping us move in the other direction. Many Senators, from both sides of the aisle, are currently focusing a good deal of time to discussions on reforming both the estate tax and the alternative minimum tax (AMT). Repeal of the estate tax, which passed the House but most likely doesn't have the 60 votes needed in the Senate, would cost close to a trillion dollars in lost revenue over ten years. (Irresponsible reform could be almost as damaging.) Repeal of the AMT - rather than reform to make the tax more fair - would add nearly $1.2 trillion to deficits and the federal debt over the next ten years, assuming the tax cuts are made permanent. Lawmakers seem to be jumping at the chance to "fix" fairness issues in our tax system by looking to repeal the estate tax and the AMT. However, these reforms would only further protect the super-wealthy in our society from paying their fair share of taxes, and would leave more of the tax burden on everybody else. Congress should be looking for ways, instead, to raise revenues and constrain spending in order to bring down these unsustainable deficits; which, in the long term, will not only worsen our fiscal situation, but will worsen it disproportionately for the bottom 90 percent of taxpaying Americans.

On Friday the Bureau of Labor Statistics reported that the nation's payroll only expanded by 78,000 in the month of May. This was 100,000 jobs below the expectations of jobs forecasters. This downward trend in May was coupled with other weak economic indicators including continued slow wage growth, losses in manufacturing, and ongoing high levels of long-term unemployment. Despite this low-level of job-growth, unemployment did dip down slightly, from 5.2 percent to 5.1 percent. Since May 2003, job growth has averaged 147,000 jobs per month. This level, according to the Economic Policy Institute, is enough to sustain the economic recovery, but the overall pattern of job creation over the past two years "suggests that a convincingly strong labor market recovery has yet to take hold." The Center for American Progress notes in this report that no American President since the Great Depression has, until now, sustained a net loss in private-sector jobs 52 months into their presidency. For more information, click here.