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Member Questions of the Week of March 22, 2010

John Waldruff from Oscoda, MI asks, What is the true cost per family for cap and trade? OUR ANSWER: You can read The Heritage Foundations report detailing the cost of the Senate version of cap and trade (the Boxer-Kerry bill) here. In total, our nations Gross Domestic Product would drop by an aggregate $9.9 trillion between 2012 and 2035. That translates into a $108,000 loss of income for families of four over those twenty-three years, or more than $4,500 a year. Additionally, families are expected to lose over $40,000 in net worth by the year 2030. Gasoline prices will rise by 45% and electricity prices will shoot up 72%, while families can expect to see their energy spending rise by more than $1,000 per year by 2035. There is little doubt that a cap and trade program would significantly affect the financial well-being of many American families for decades to come. Go here and here to read the latest from the Foundry about cap and trade.

Joe Bashara from Dallas, TX asks, Have you ever reviewed the American Recovery and [Re] Investment Act of 2009? OUR ANSWER: Yes, Heritage has released numerous papers, fact sheets, and blog posts detailing the Presidents wrongheaded stimulus plan from last year. For a one-stop shop for all of our stimulus research you can go here.

Jeff Busby from Tulsa, OK asks, Was social security originally intended to be retirement or just a supplement to retirement? OUR ANSWER: Social Security was originally intended only to supplement personal retirement savings. President Franklin Roosevelt noted in a message to Congress about the original law that, social security can furnish only a base upon which each one of our citizens may build his individual security through his own individual efforts.” In fact, the formula used to pay benefits today ensures that a safety net is created for low-income workers, but higher-income workers need to supplement their benefits with personal savings to ensure a comfortable retirement. Especially since Social Security is facing financial trouble, it is even more important for younger Americans to save for retirement, whether its through an employer-sponsored plan like a 401k or an individual account like an IRA. Saving can also be made easier and therefore more likely through policies such as automatic enrollment in IRAs that would provide workers with a simple way to save for retirement that they could still opt-out of if they choose.

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