Obama Comes out Saving!

America Saves Week is turning out to be a big week. It's New America Foundation "moving week" (check out our new contact information), and it's Budget Week. President Obama released his budget overview today, you can download your very own PDF here, or get your very own, nicely bound copy for $26 from the U.S. Government Bookstore.

Of course, you could also let other people go through the budget for you. That's what we're here for. We've been doing a bit of quick searching in the document, and frankly, there's some good news in there (also, whoever invented "Ctrl+F" is a genius).

We'll be highlighting some additional findings throughout the day and in the coming days, but the big news from our perspective is right there on Page 37. The Administration has come out, as they said they would during the campaign, fully in favor of a system of "automatic workplace pensions."

What does that mean you might ask? Let's go to the text:

Making Saving for Retirement Easier as the Economy Recovers.
Over the long-term families need personal savings, in addition to Social Security, to prepare for retirement and to fall back on during tough economic times like these. However, 75 million working Americans—roughly half the workforce—currently lack access to employer-based retirement plans. In addition, the existing incentives to save for retirement are weak or non-existent for the majority of middle and low-income households. The President’s 2010 Budget lays the groundwork for the future establishment of a system of automatic workplace pensions, on top of and clearly outside Social Security, that is expected to dramatically increase both the number of Americans who save for retirement and the overall amount of personal savings for individuals. Research has shown that the key to saving is to make it automatic and simple. Under this proposal, employees will be automatically enrolled in workplace pension plans—and will be allowed to opt out if they choose. Employers who do not currently offer a retirement plan will be required to enroll their employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems. The result will be that workers will be automatically enrolled in some form of savings vehicle when they go to work—making it easy for them to save while also allowing them to opt out if their family or individual circumstances make it particularly difficult or unwise to save. Experts estimate that this program will dramatically increase the savings participation rate for low and middle-income workers to around 80 percent.

This has got to make our good friends at the Retirement Security Project very happy, President Obama has basically endorsed their vision of the Auto-IRA plan in his initial budget overview. We're happy for them. We're also happy for the 75 million Americans who can't access a retirement plan through their employer. Then there's this, "Research has shown that the key to saving is to make it automatic and simple." President Obama has just sent a signal that his Administration is going to be serious about saving and serious about using the talented behavioral economists that are in his Administration. That's great news, during America Saves Week or any other.