Talk About Social Security Is Just Beginning

President Clinton used his State of the Union speech Tuesday to shine the bright glare of national publicity on Social Security, making it clear he wants a conversation and debate among Americans about the future of the retirement program.

Beyond his high-profile proposal to set aside the emerging federal budget surplus to help pay future Social Security benefits, Clinton and Vice President Al Gore are likely to attend town hall meetings this summer, organized at the prompting of the White House, to get people talking about the program’s financial problems.

Clinton has invited the Concord Coalition, which endorses restrictions on Social Security spending, and the American Assn. of Retired Persons, a staunch defender of the current system, to be co-sponsors for the events.

The administration wants a blizzard of publicity throughout the year, leading to a White House conference on Social Security in the winter and culminating in a meeting between Clinton and congressional leaders in January 1999 to craft a bipartisan bill to assure Social Security’s solvency.

Clinton’s plan to reserve future budgetary surpluses for Social Security is, at best, a stopgap measure. It is essentially a bookkeeping device that would help reduce the overall federal debt by declining to spend the surplus on other federal programs.

But its real purpose is to send a strong message to Congress: Let’s fix Social Security first. “The surpluses should not be used for any tax or spending items until the Social Security issue is completed next year,” Social Security Commissioner Kenneth S. Apfel said Tuesday.

“This is an attempt to push the country to do something we’ve never taken on before: major entitlement reform when we weren’t facing an immediate crisis,” said Gene Sperling, head of the administration’s National Economic Council.

The AARP had invited Clinton to participate in one of its periodic events dealing with Social Security. A similar invitation came from the Concord Coalition, a citizens group pressing for such measures as a higher retirement age and reduced Social Security benefits for those with higher incomes.

The White House decided the best way to get a broad-based approach welcoming all points of view would be to have the AARP and the coalition as co-hosts for the series of bipartisan town meetings.

“We welcome the opportunity to co-host these conferences, and hope they will bring together Americans from diverse generations, economic situations, geographic locations and political affiliations to discuss this important issue,” said Martha Phillips, the Concord Coalition’s executive director.

Members of Congress and many organizations and groups will be invited to the conferences, said Horace Deets, executive director of the AARP. “We want more people involved, particularly younger people,” he said. “Changes in Social Security will affect my children and grandchildren.”

Clinton’s proposal for the meetings drew widespread approval, including from those who would like to give individuals the option of placing some of their Social Security taxes into personal retirement accounts.

“It’s important the president is beginning to talk about this,” said Rep. Marshall “Mark” Sanford (R-S.C.), author of legislation that would establish such accounts. “For too long this issue was in the far corners of the Washington debate.”

The threat to Social Security is a simple matter of demographics: the inexorable march toward retirement of 76 million baby boomers, the men and women born in the years 1946 through 1964, members of the largest generation in American history.

The first wave begins retiring in 2011, and the Social Security reserves will be steadily drawn down. By 2029, the system will face a financial crisis: In that year, payroll tax revenues will only be enough to pay 75% of the benefits promised under current law.

The national debate Clinton wants to promote will focus on the best ways to close the gap between tax revenues and promises.

The Social Security system collects payroll taxes (6.2% each from worker and employer on salaries up to $68,400 a year) from 143 million workers to pay retirement, disability and survivors benefits to 43 million people.

There is a surplus of about $50 billion a year of revenues over outlays, money that has helped trim the overall federal budget deficit.

When Congress and the president boast about balancing the budget this year, they are really taking advantage of the $50 billion in surplus revenues from the Social Security payroll tax.

Times Washington Bureau Chief Doyle McManus contributed to this story.