Facing The Third Rail
Common ground on Social Security reform may be hard to find, now that it's stuck firmly on this year's road to the White House.
Many sides on "the third rail in American politics" had their say on CBS News' Face The Nation on Sunday. At ground zero in the debate is Texas Governor George W. Bush's idea to let individuals invest a slice of their Social Security payroll tax money into the market. The partial privatization plan by the GOP presidential candidate is sparse on specifics, because Bush says he prefers to hammer out its details in bipartisan talks with Congress.
Bush's Democratic opponent, Vice President Al Gore, calls the plan "risky" and criticizes its vagueness. On Face The Nation, Sen. Charles Schumer (D-N.Y.) argued as much when he took the idea to task.
"If George Bush has a plan to radically change Social Security - and this does change it radically - he ought to lay it out before the American people before the election…" said Schumer. "No secret plans on something as important and almost as sacred as Social Security."
"What you are proposing is lowering the guaranteed (Social Security) retirement benefit, because if the stock market goes down or gets wiped out, you have lowered the amount that people get," he added.
Sen. Rick Santorum (R-Pa.) told Face The Nation that the Social Security system can't afford the status quo when it has to pay out benefits once the baby boomers start retiring.
"Social Security is unfunded now. You're assuming that we're talking about everything will be fine if we just leave it alone…There is no money in the trust fund. There are IOUs in the trust fund that we have to redeem some day," Santorum said.
And Sen. Bob Kerrey (D-Neb.), one of three senators favoring a bipartisan commission to study Social Security reform, said the market can be trusted if it's done right.
"You don't invest in individual stocks, you can invest in lower yielding bonds. You can invest in funds that are relatively low risk," Kerrey told Face The Nation.
"The problem that we have in America that this proposes to solve is that the poor working people, the middle income working people as well, are struggling to save money" to invest in 401Ks and IRAs, he added.
But Schumer said those people could be the very ones hurt by a plan such as Bush's.
"If you're a poorer person, and you depend on that Social Security…you don't want, even if there's a 25 percent chance that the stock market goes down cataclysmically, that you don't have that money."
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Santorum said the approach would mirror thrift savings plans, rather than picking individual stocks.
"What we're doing is a responsible way to put more money in the system through the growth of markets over time…Every other retirement system in this country is funded this way."
"If it's good enough for union plans and corporate CEOs, it should be good enough for the people who don't have savings to be able to participate."