Newsletter From Rush Holt

With the continuing turmoil in our financial markets, we must address its effect on the retirement security of American families. According to the Congressional Budget Office, American workers have lost as much as $2 trillion in retirement savings over the last year. Americans rightly are worried that their savings will not be there to meet their needs as they hoped. We have also seen leading companies freeze or end their defined contribution, 401(k), plans. Further, even some defined benefit plans, which provide retirees with a guaranteed pension check, may be in doubt.

The House Committee on Energy and Labor, of which I am a member, continues to study ways to preserve defined benefit plans and strengthen 401(k) and other retirement plans. One step we must take is to suspend temporarily a federal regulation that will force individuals over 70 ½ years of age to make a withdrawal from their retirement account. This week, the House passed this with my support, and we await action by the Senate. The Census bureau estimates that 5.5 million seniors have IRA’s or 401 (k) plans and could be forced to sell financial assets at a tumultuous time in the market. I have heard from many New Jersey seniors, about these required minimum distributions for 2008. This Congressional Research Service report contains more information on this issue.
Of course, our committee cannot turn around the stock market and the whole economy. Nonetheless, our committee will continue our work to protect retirement security, and I hope to hear from you about any ideas you may have to address this issue.

Helping the World’s Poor
I previously have written about my interest in lifting millions around the world out of poverty by providing them access to small loans. Such microfinance programs have the power to transform the lives of the world’s poorest by providing access to small amounts of money (often less than $150) to start self-sustaining businesses. Microfinance programs are having a very positive effect around the globe.
Recently, I wrote a bipartisan letter requesting that World Bank President Robert Zoellick expand microfinance efforts. Specifically, my letter, signed by 92 Members of Congress, encourages the World Bank to create a $200 million grant program to reach the very poor with microfinance loans, and to establish regionally-focused Centers of Excellence. The global financial and economic crisis appears to be affecting the world’s poor badly. Increasing the availability of microfinance is one way we can help those most in need, both abroad and here at home as credit remains tight.
Help for Small Businesses
Recently, the Small Business Administration announced it is allowing banks to make 7(a) loans at interest rates based on the London interbank offered rate, which is lower than the standard U.S. prime rate. Many New Jersey banks offer the lower rate, and small businesses in the region will now be able to benefit. All businesses that are considered for financing under SBA’s 7(a) loan program must meet SBA size standards, be for-profit, not already have the internal resources (business or personal) to provide the financing, and be able to demonstrate repayment.
By the way, I was pleased to see Governor Corzine’s announcement this week creating the “InvestNJ Business Grant Program” to help stimulate capital investment and job creation. Under the program, companies can obtain $3,000 grants for each new job they create and sales tax reimbursements on capital purchases of $5,000 or more. Applications will be available next month. More information can be found here.
Member of Congress

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Filed under 12th congressional district, 401(k), Congressional Budget Office, Financial crisis, INVEST NJ, Jon Corzine, Newsletter, Rush Holt, small businesses, World Bank, World's poor

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