"Powerful House Democrats are eyeing proposals to overhaul the nation's $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive. House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed accounts to which all workers would be obliged to contribute. ... The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation", 16 October 2008, http://www.workforce.com/section/00/article/25/83/58.php.
Ben Franklin said, "No man's life, liberty or fortune is safe when the legislature is in session". He was right. What's going on here? This is a tax increase. Teresa Ghilarducci, a New School economics professor created this plan in May, which Congress is now considering. Why? To seize $3 trillion in 401(k) assets, that's why. Congress will then give you a TIPS bond. If someone wants to put TIPS in his 401(k), he can do it now. If this plan is adopted, inflation will rise as Congress steals your 401(k)'s real value. This is called a "forced loan" scheme. South American countries resort to them from time-to-time when they need money. Argentina is considering one now. Keynes urged Great Britain adopt a forced loan scheme to pay for World War II, see Time, 27 November 1939, http://www.time.com/time/magazine/article/0,9171,762868,00.html. There is nothing new here.