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Both rivals wield Social Security as weapon
© St. Petersburg Times, published May 16, 2000
Social Security, an issue that can turn Florida elections and doom candidates who dare tinker with it, is awakening presidential campaigns that have spent the past two months in hibernation.
George W. Bush on Monday renewed his call for allowing younger workers to invest part of their payroll taxes in private investment accounts. The Republican contended in a speech in California that he could offer that option while keeping Social Security solvent, maintaining benefits for older Americans and offering a substantial tax cut.
"For those on Social Security -- or close to receiving it -- nothing will change," Bush promised at the Rancho Cucamonga Senior Center. "Government has made a commitment, and you have made your plans."
The question of how to bolster the Social Security system is one that sharply divides Bush and his Democratic rival, Vice President Al Gore, who opposes the creation of private investment accounts. For that reason, it is certain to be a centerpiece of the debate leading up to the November balloting.
Gore immediately ripped into Bush's proposal, arguing that private investment accounts would undermine the fundamental tenets of Social Security as the "bedrock" of American retirement income and would further erode the economic soundness of the program.
"You shouldn't have to roll the dice with your basic retirement security," Gore told an audience at Beaver College in eastern Pennsylvania. "And you shouldn't have to pay for those who do."
Gore's advisers said the Democrat is concerned that Bush's plan would open the way for abolishing minimum benefits and raising the retirement age. In addition, they said, it raises the specter of "an S&L style bailout" for retirees who lose their money making risky investments.
Conservatives, meanwhile, praised the Bush plan.
"Gov. Bush's plan puts the "security' back in Social Security and, for that, small business applauds him," declared Jack Faris, president of the National Federation of Small Business, which has been advocating the creation of personal retirement accounts with Social Security funds.
Gore is expected to drive home his argument against the Bush plan on Wednesday at an AARP convention in Orlando. The Social Security debate could prove decisive in Florida, which is expected to play a key role in deciding the November election.
Gore has vowed to compete for the state's 25 electoral votes and match the success of President Clinton, who in 1996 became the first Democratic presidential candidate in 20 years to carry the state. Since then the state has become even more Republican, and Bush's younger brother, Jeb, has moved into the Governor's Mansion.
A recent poll by the American Research Group in Manchester, N.H., indicated Bush leads Gore in Florida by 47 percent to 40 percent.
But Social Security is a volatile subject in a state where nearly one in five residents is older than 65.
A St. Petersburg Times/Miami Herald poll in November indicated more than a third of Florida voters rank Social Security and Medicare among their top two issues. Tax cuts were listed among the top two issues by just 14 percent.
"Any alteration to the program is going to make older voters nervous," said Jim Kane, editor of the Florida Voter, a non-partisan opinion poll. "It could affect the Florida race if it gets closer."
During his recent visits to the sprawling retirement condominium complexes in South Florida, Gore has warned seniors that Bush wants to change Social Security. The vice president has described the Republican's plan as too risky.
Susan MacManus, a University of South Florida political science professor who closely tracks elderly voters, said her unpublished survey of 600 elderly voters after the 1998 election indicated a majority still opposed allowing Social Security taxes to be diverted into individual retirement accounts.
But MacManus said the opposition appears to be softening, particularly at a time when the economy is strong.
"There is a little more support for some of these alternatives among seniors than you might think," she said. "It is a different environment than it was in '96 or '92. But it is still a tightrope. And if this is a low-turnout election, as many analysts believe, the senior vote is magnified."
Created in 1935, Social Security is expected to become insolvent in 2037. When the economic soundness of the program was in question in previous years, the federal government either raised taxes or reduced benefits.
Gore and Bush are trying to avoid both of those alternatives. Each is trying to portray himself as the presidential candidate best positioned to preserve and protect a program that many younger voters doubt will exist by the time they retire.
The vice president would use virtually all of the Social Security surplus to pay down the national debt, then use the money saved in interest payments to extend the life of the program. His campaign says that would keep Social Security solvent until 2050.
The Clinton administration once proposed allowing the government, not individual retirees, to invest 15 percent of the Social Security surplus in financial markets to improve the program's rate of return. But Gore has moved away from that strategy and now calls it bad policy.
Gore also would use less than 5 percent of the Social Security surplus to improve benefits for widows and working women.
Bush's proposal is aimed at reassuring older voters that Social Security would not change for them while targeting younger voters who are more comfortable with investing in the stock market. He said Monday that a Social Security return that amounts to 2 percent a year now could produce a 6 percent annual return in the stock market over the long term.
"There is a fundamental difference between my opponent and me," Bush said. "He trusts only government to manage our retirement. I trust individual Americans."
The Texas governor's proposal, though, is short on details.
Bush does not specify where the cut-off would be for older workers whose Social Security contributions and benefits would remain unchanged. He also does not suggest what portion of payroll taxes could be diverted into private investment accounts by younger workers.
The number mentioned most often in several proposals is 2 percentage points of the current 12.4 percent Social Security payroll tax.
Would workers who choose to create their own retirement account and lose money find their Social Security benefits cut?
"It could be done any number of ways," Larry Lindsey, Bush's chief economic adviser, said in a conference call with reporters Monday.
Lindsey said Bush will not pick one of the half-dozen specific plans for changing Social Security that are floating around Washington. He said the Texas governor's goal is to promote the individual investment accounts as a sound concept that is better than the alternative.
"The current system," Lindsey said, "does not work."
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