Mellody's Math: State of Your Economic Union

While the permanence of the tax cuts are a divisive issue between the two parties, consumers, for the time being, can count on seeing lower tax rates. However, in a recent ABCNEWS/Washington Post poll, 55 percent of Americans favor reducing the tax cut to keep the budget balanced. Despite varying opinions on the need for a tax cut, consumers are the beneficiaries with more money in their paychecks and less money withheld from them.

White House to Your House: In terms of one's own personal finances, these tax breaks are in place to encourage consumer spending. Stay tuned for an extended debate on taxes, with both parties vying for voter support of their proposals.

Protecting Your 401(k) and Pensions: In the wake of the Enron debacle, the nation's largest ever bankruptcy, thousands of its employees were left without retirement plans prompting Bush to call for the need to enact new safeguards for 401(k) and pension plans.

More than 40 million employees have access to corporate 401(k) savings plans, representing nearly $2 trillion in assets. Enron proved why employees need to be well versed on their retirement savings.

The Democratic response, delivered by House Minority Leader Dick Gephardt, went even further with regards to retirement protection. Gephardt voiced support for a universal pension system that would follow workers from job to job and protect them from "the next Enron."

White House to Your House: Look for Bush and Congress to propose legislation that may limit the amount of company stock permitted in 401(k) plans. In addition, the president spoke of a need for corporate America to be made more accountable to employees and shareholders. These sentiments are likely to usher in accounting standards and disclosure requirements-both good things for the American consumer.

Retirement Security: Retirement security, as Bush stated, also "depends upon keeping the commitments of Social Security."

Between 2010 and 2030, the number of elderly Americans will rise by 82 percent, while the working age population will grow by just 5 percent. This equates to a severe strain on the resources for social security and a wide disparity between the money taken out and the money coming in. In line with Bush's theme of job creation, he also indicated that a good job should lead to security in retirement.

White House to Your House: In this vein, Bush suggested allowing younger workers to set up personal retirement accounts. These personal retirement accounts are germane to the controversial issue of privatizing social security-another issue that is sure to be discussed in coming months. Whether it is a Democrat or Republican proposal or bill, partisanship will most likely take a back seat, as it is doing in many of the president's other initiatives, to an expanded safeguard of employee retirement assets.

Mellody Hobson, president of Ariel Capital Management in Chicago, is GoodMorning America's personal finance expert. Click here to visit her Web site, Ariel Mutual Funds.com. Ariel associates Matthew Yale and Anne Roche contributed to this report.

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