Smart Savings Act

Floor Speech

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Mr. ISSA. Thank you, Chairman.

Again, thank you, Ranking Member Cummings.

Mr. Speaker, we are the board of directors for the Government of the United States. Our committee oversees the equivalent of an IRA or a 401(k) in the private sector, known as the TSP. It sounds like a lot of initials, perhaps, to people who are hearing this, or it is even, in some cases, confusing to the Federal workforce, but it is really quite simple.

We have through oversight discovered with the Thrift Investment Board that, in fact, we have done a disservice to the Federal workers by putting them into an absolutely, positively safe investment that does not keep up with inflation. Effectively, the dollars they contribute, and matching dollars from the government as an employer, are shrinking every year in constant dollars. Their investments are, in fact, smaller if they stay in that fund.

Now, near the end of people's careers--in those last couple of years--they may want to lock in with absolute certainty the size of their retirement funds to use in some way after they leave government, but in the first days, it is clear that, in the long run, the only way for an investment to grow greater than inflation is to make the kinds of investments that are possible in the other offerings under TSP, which, again, is the equivalent of a 401(k) in the private sector.

This recognition was well thought out by the Board, was well researched, and brought to our committee. It is one of those simple things that should have been done sooner, so I appreciate that the committee marked it up quickly and that we are bringing it to the floor only a short time later. I hope the Senate will hold it at the desk and will quickly allow the President to make it law because, once it is law, Federal workers will, for the first time, have a default that keeps up with or exceeds inflation.

The decision to make it quick is not because we are in a hurry. It is because, every day, Federal workers, by default and through no fault of their own, unwittingly, are finding themselves in inappropriate savings plans in their 401(k)s, known in government as the TSP. I know it is always one of those things where people say: Why are you in a hurry? In this case, we are in a hurry because we realize we should have gotten it right sooner, and we certainly are glad that we got it done now. On behalf of the committee that oversees the Federal workforce, we hope that they will appreciate that they have, if you will, a bit of an apology that we didn't act on this even quicker.

It is important to make sure that the Federal workforce has a good pay and benefits package, and in this case, they have a good retirement package through TSP that was underperforming for many of our Federal workforce. I believe, today, the default will make it perform better while taking away none of their inherent choices, including if they want to remain in the G Fund.

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