WEST MIFFLIN, Pa.
Declaring that hard work should pay off for every American, President Barack Obama on Wednesday signed an order to create starter retirement accounts that could be opened with as little as $25, but he acknowledged there's a limit to the help he can give low-wage workers without congressional action.
Obama followed up Tuesday night's State of the Union address by traveling to two workplaces to drive home the message from a pair of proposals aimed at boosting the personal finances of working class Americans.
Obama visited a Costco warehouse in suburban Lanham, Md., where entry-level employees start at $11.50 an hour to tout his call for a $10.10 minimum wage. At a U.S. Steel plant outside Pittsburgh, he signed a presidential memorandum to create the myRA program, which he told employees would go toward "making sure that after a lifetime of hard work, you can retire with some dignity."
Obama was trying to tap into Americans' frustration with Washington, which has been gridlocked by partisan debate, and an economy that's been slow to rebound from the recession. He accused Congress of wasting time when Americans need action.
"I could do more with Congress, but I'm not going to not do anything without Congress, not when it's about the basic security and dignity of American workers," Obama said.
The president then sat at a desk set up in the steel plant and signed the memorandum. Afterward, he took it off stage and handed it to Treasury Secretary Jack Lew. Lew's initial task is to set up a pilot program with accounts available through some employers by the end of the year.
The program will operate like a Roth IRA, so contributions of as little as $5 per paycheck would be made with after-tax dollars. That means account holders could withdraw the funds without paying additional taxes. The funds would be backed by U.S. government debt, similar to a savings option available to federal employees, and investors could keep the accounts if they switch jobs or convert them into private accounts.