Bush Again Pushes Stock Investments for Social Security

President Bush on Thursday renewed his call to allow workers to invest a portion of their Social Security payroll taxes in the stock market, but he sought to deprive Democrats of a favored campaign issue by not urging Congress to act this year.

Instead, Bush merely promoted his plan to partially privatize Social Security in the larger context of ensuring retirement security.

The call for reform of retirement programs gained new prominence after the recent collapse of Enron Corp., which left many of the energy firm’s employees with virtually worthless company-sponsored retirement accounts.

Democrats and Republicans long have clashed over how to reform Social Security--which was created in 1935--while actually doing very little. This year may be no different, judging by Thursday’s rhetoric.

In a luncheon address at a Labor Department-sponsored summit on retirement security, Bush also touted his recently unveiled pension-reform proposals as he alluded to the Enron scandal.

“In recent months we’ve seen how workers can lose a lifetime worth of savings if their company were to fail,” the president said. “So my administration has proposed reforms to make sure that the money Americans put away in their working years grows safely so it is available in their retirement years.”

In separate remarks at the National Summit on Retirement Savings, Federal Reserve Chairman Alan Greenspan sought to inject a note of reassurance into the increasingly partisan debate over Social Security reform.

“I cannot imagine a viable political scenario in which full payment of benefits will not be forthcoming,” he said. “Does anyone doubt that Congress would prevent benefits from being curtailed if the trust fund were depleted?”

Even before Bush spoke, Senate Majority Leader Tom Daschle (D-S.D.) mocked the president’s proposals as “retirement insecurity.” And he accused Republicans of intentionally delaying Social Security reform because they want to hide the fact that workers would lose benefits under the GOP approach.

“We don’t think it ought to be postponed until after the election,” Daschle said.

On the other side of the Capitol, House Minority Leader Richard A. Gephardt (D-Mo.) said Democrats would try to bring up Bush’s Social Security reform plan for a vote. “I think it’s essential,” he said.

To be sure, Bush is not alone in his desire to partially privatize Social Security, which would give workers the option of using some of their payroll taxes to create personal savings accounts whose investments they would control.

This week, House Majority Leader Dick Armey of Texas called on his GOP colleagues to embrace this approach.

But many Republicans have been lukewarm in their reaction to the president’s plan. Historically, Democrats have staged significant political gains by portraying Republicans as hostile to Social Security.

Still, Bush pressed his case Thursday.

“Some people like their Social Security exactly the way it is. And they’ll be able to keep it exactly the way it is,” he said in his luncheon address.

“But for younger workers who want to take advantage of the power of compounding interest, we should allow for personal retirement accounts.”

According to the president, the average return on Social Security is less than 2%, and the program in the long run pays retirees less than 30% of what they earned before retiring.

“And that’s not good enough. . . . We can do better,” Bush said.

“Because there’ll be an expanding number of retirees for Social Security [to] support in the future, we must apply the power of savings, investing and compound interest to the challenges of Social Security by introducing personal retirement accounts into the system. Americans would own these assets. After all, it is their money.”