Tuesday, March 17, 2015

Hillary Clinton Adviser Wants to Kill Your 401(k)

By Emily Cadei

Being an economist isn't often a path to fame, but Teresa Ghilarducci found her 15 minutes — and so much more — about seven years ago, when she went to testify before Congress on the intricacies of retirement savings. Overnight, she became a star. That is, if being branded "the most dangerous woman in America" or landing in the sight lines of a chorus of talk-radio characters counts as stardom.

The moment was propitious, in a way. Stock market vagaries had gutted millions of Americans' savings, and though Ghilarducci wasn't exactly celebrating, the crash did validate two decades of work and "every single one of my predictions" about the dangers of 401(k)s, she says. Her alternative is bold: She'd chuck the tax break people receive when they put money into the retirement accounts known as 401(k)s and use the savings to create an entirely new system run by the government. Terms like "government run" and "eliminate tax breaks" are catnip to the right, and Ghilarducci became, for a time, its favorite scratch pole: The woman who wants to "nationalize" 401(k)s, and the like.

If anything, Ghilarducci's brush with notoriety seems to have galvanized her. And over the past couple of years, her ideas have gotten play in huge states with pension problems, like Illinois and California, and with major unions, like the UAW, on healthcare trusts. Senate Democrats have used Ghilarducci's proposals as a springboard for their own plans. "Every candidate will talk to a pension geek," she explains. And "that's me." It's been reported that she's among a group of economists advising all-but-announced presidential candidate Hillary Clinton. (Neither Ghilarducci nor Clinton staffers would confirm — or deny.)

Which would give Ghilarducci, who is 57 with a pixie-like face and a high-energy manner, a broader platform for her controversial ideas than ever before. The daughter of a single welfare mom, Ghilarducci maintains a strong, if often unfashionable, faith in an active government and a strong safety net. How else could she have made it from a dusty California town to tenure at elite universities (first Notre Dame and now the New School, where she directs the Schwartz Center for Economic Policy Analysis) to the ear of the presumptive Democratic presidential nominee?

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