Local man wants to make it easier to buy war bonds

A Kingman resident is lobbying Congress to change federal law to make it more financially attractive for working people to buy war bonds to support any potential military campaign in response to the Sept.

11 terrorist attacks.

Michael Carter, 41, said he wrote letters to all 100 U.S.

senators urging them to change the law so that working people enrolled in 401(k) plans may withdraw funds to buy war bonds without facing penalties.

Currently, those enrolled in the retirement plans face penalties if they withdraw funds before they turn 59 1/2 with few exceptions.

"I hold a 401(k) plan, and (the idea) came to me," Carter said.

"Right now, I am vested about $2,500, and I would shift it all into the war bonds."

Such a proposal could raise billions of dollars for any war effort, Carter said.

"My main concern is that the sooner we get this done while the support is there, the sooner the monies can be put into the war effort," he said.

Carter suggested the issuance of a special war bond.

Once the bonds mature, the funds could be transferred back into the 401(k) plans or remain as a bond, he wrote the senators.

Several bills are being considered in Congress to revive war bonds, according to aides to U.S.

Sen.

Jon Kyl, R-Arizona, and Rep.

Bob Stump, R-Tolleson.

America last issued tax-free war bonds during World War II.

Kyl spokesman Matt Latimer said he is unaware of any proposal along the lines suggested by Carter.

"I need to know more about it," he said

Carter, a four-year Kingman resident who works in electrical sales, said he spoke to Stump's staff in Phoenix, and would travel at his own expense to lobby members of Congress.

Stump's district representative at his Phoenix office, Bruce Bartholomew, said the biggest 401(k) plan in the country, the thrift savings plan available to all federal government employees, allows participants to invest in government bonds.

"There is nothing stopping any other 401(k) from offering the same option to other workers," Bartholomew said.

"It is up to the administrator to the plan.

The federal government has guidelines to ensure the safety of the system.

They don't let administrators invest in too risky an investment or speculate."

However, Kingman certified public accountant Henry Varga said such a change would require an act of Congress.

"The plan administrator has no authority to release anybody from that penalty because that is a tax penalty," Varga said.

"You would have to have it literally an act of Congress and signed by the president."

Bartholomew said he would need to do more research to determine whether Carter's proposal requires legislation.

"We are going to look further into it," he said.

"It's an idea that is worth exploring.

So much depends on things that we don't know right now."

He said Congress is considering a variety of proposals to revive war bonds.

"They have to look at the debt management of the country," Bartholomew said.

"They would look to see what they need to accomplish in terms of raising money."

He said specifics such as the denominations for war bonds, their maturity and interest rates remain to be determined.

Efforts to reach the press staff for U.S.

Sen.

John McCain, R-Ariz., were not successful.