Members of the United States military are inadvertently funding the rise of their biggest 21st Century adversary — China — through their retirement savings, Army Green Beret and Congressman Mike Waltz (R-FL) warned in an interview this week.
About $50 billion from the 401k-style plan that U.S. troops put their savings into is invested in an index that includes Chinese firms, some of which build weapons systems for the Chinese military, he said in an interview with Breitbart News on Wednesday.
“It’s insane,” he said. “This is the most dangerous adversary we have ever faced.”
Waltz said in a video he tweeted earlier this week:
Every month, me included as a National Guardsman, we contribute to this 401K-style plan. Well guess what? Billions of dollars from it are going over to Beijing and funding Chinese shipbuilding, plane building and all types of companies. Many of which are close to the Chinese Communist Party, some of which are even on the U.S. sanctions lists.
We cannot have the American military who’s out on the frontlines retirement account funding their biggest adversary in the 21st Century. America, we need to wake up. We are in a Cold War with China, they are certainly in one with us. And we would be no more funding their industry through our retirement than we would the Soviet Union and companies in Russia years ago. We need to think about this differently and this has got to stop.
The hard-earned retirement savings of our servicemembers are funding the #Chinese military RIGHT NOW.
Meanwhile, #China is attacking our online healthcare systems & stealing our intellectual property.
— Michael Waltz (@michaelgwaltz) April 20, 2020
Waltz is sponsoring a bill first proposed by former Rep. Mark Meadows (R-NC), now President Trump’s chief of staff, that would prevent those retirement funds from being invested in Chinese firms. Sen. Marco Rubio (R-FL) is sponsoring a companion bill in the Senate.
Waltz said another way to change this would be for President Trump to appoint a new chairman of the Federal Retirement Thrift Investment Board (FRTIB), which oversees the federal retirement fund known as the Thrift Savings Plan (TSP). The board‘s chairman is Obama appointee Michael Kennedy, a Harvard MBA.
Late last year, Kennedy overruled objections from both Republicans and Democrats to move forward with the decision to shift the TSP’s international fund index to the MSCI All Country ex-U.S.A. Investable Market Index, which invests in large, mid and small cap companies in 22 developed markets.
The move “constitutes a decision to invest in China-based companies, including many firms that are involved in the Chinese Government’s military, espionage, human rights abuses, and ‘Made in China 2025’ industrial policy,” Sens. Marcio Rubio (R-FL) and Jeanne Shaheen (D-NH) wrote in a letter to Kennedy in November 2019, according to industry website Chief Investment Officer (CIO).
“Many of these Chinese companies may soon receive investments directly from the paychecks of members of the US Armed Services and other federal government employees because of your decision,” they wrote.
One Chinese company in the index is Hangzhou Hikvision Digital Technology, which was placed on a trade blacklist last year because its surveillance technology is used in detention camps for China’s Uygher Muslim minorities, according to Reuters. Another company is avionics company Aviation Industry Corporation of China, which provides weapons for the Chinese military.
Lawmakers are also appealing to Secretary of the Department of Labor Eugene Scalia, whose department oversees the FRTIB, according to Reuters.
Supporters of FRTIB’s decision argue that the board is seeking the highest return on investment. But Waltz said it should not come at the expense of national security.
“I’m a free-market, pro-growth capitalist all day long. But not at the expense of national security. And China fully intends — it’s explicit in President Xi’s and many other officials’ speeches — to dominate the United States in the next 15 years, and we need to start treating this like the cold war that it is,” he said.
He said those opposing any change represent the thinking on China from the Obama-Biden administration, where the “rise of China was seen as peaceful” and that “if we just extend our hand and open ourselves up, that they will, too.”
“We’ve tried that for many years, and they’ve taken advantage of unfair trading practices, predatory cyber espionage, predatory mergers and acquisitions,” he said.