Newspaper Clippings Re: Social Security Debate, Dole for Senate 2002

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8 Pages

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c042_033_013_all

Title (Dublin Core)

Newspaper Clippings Re: Social Security Debate, Dole for Senate 2002

Date (Dublin Core)

1999-01/2002-12

Date Created (Dublin Core)

1999-02/2002-12

Congress (Dublin Core)

106th (1999-2001)

Policy Area (Curation)

Government Operations and Politics

Creator (Dublin Core)

Page, Susan, 1951-

Record Type (Dublin Core)

newspaper clipping

Names (Dublin Core)

See all items with this value Dole, Elizabeth Hanford

Rights (Dublin Core)

http://rightsstatements.org/vocab/CNE/1.0/

Language (Dublin Core)

eng

Collection Finding Aid (Dublin Core)

https://dolearchivecollections.ku.edu/index.php?p=collections/findingaid&id=343&q=

Physical Location (Dublin Core)

Collection 042, Box 33, Folder 13

Institution (Dublin Core)

Robert J. Dole Institute of Politics, University of Kansas, Lawrence, KS

Archival Collection (Dublin Core)

Elizabeth Hanford Dole Senate Papers, 2001-2009

Full Text (Extract Text)

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Social Security debate may be ready to reignite
Tue Dec 3, 7:25 AM ET Add Top Stories - USA TODAY to My Yahoo!

Susan Page USA TODAY

WASHINGTON -- White House advisers are debating whether President Bush (news - web sites) should push next year to add individual investment accounts to Social Security (news - web sites). Until last month, the proposal was considered too inflammatory to touch before he ran for re-election in 2004. (paragraph highlighted)

But the results of the congressional elections have altered the political calculations around the nation's retirement system. (paragraph highlighted)

Analysts in both parties were surprised by what didn't happen: Attacks on candidates who espoused the private accounts failed to significantly hurt them. (paragraph highlighted)

"What more do we need to know about the political viability?" asks Rep. Pat Toomey, R-Pa., who was re-elected in a predominantly Democratic district after a campaign that spotlighted his support for investment accounts. "A lot of us want to tackle it in this coming Congress."

Sen.- elect John Sununu won a close race in New Hampshire after being portrayed in an opposition TV ad as a lurking figure hauling bags of Social Security money to gamble. He says congressional hearings on investment accounts should begin next year. "The longer we wait, the worse the Social Security shortfall is going to become," says Sununu, who at 38 will be the Senate's youngest member.

Top aides to Bush say the debate in the White House is about when, not if, the president will press the issue. It was one of his signature proposals in the 2000 campaign. (paragraph highlighted)

Chief of staff Andy Card and congressional liaison Nick Calio have argued that next year's agenda already is crowded with big issues: the prospective showdown with Iraq, a proposal to make last year's tax cuts permanent and an effort to enact a Republican version of prescription- drug coverage for seniors that stalled this year. (paragraph highlighted)

"It's important that we have a debate about Social Security reform, (but) I'm not sure it can happen next year," Card said after the election on NBC's Meet the Press. (paragraph highlighted)

Political advisers such as Karl Rove say there are policy and political reasons to promote proposed Social Security changes in next month's State of the Union address, then move ahead with legislative proposals and hearings. Even so, a bill probably couldn't be passed until at least 2004. (paragraph highlighted)

Debate or 'education'?

Under the proposal, workers could divert a portion of the 12.4% payroll tax to individual accounts that would be invested in the stock market. The accounts are intended to gain a higher return than the Social Security Trust Fund now gets. But while the administration hasn't outlined

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the details of a plan, those who choose to have accounts presumably would have to accept a lower guaranteed benefit and the risks of market declines. ("those who choose to have accounts presumably would have to accept a lower guaranteed benefit and the risks of market declines" underlined; check mark)

The costs would be substantial -- roughly $1 trillion -- to convert the pay-as-you-go system to one in which some revenue would be lost from the general fund.

A senior White House adviser says Bush hasn't decided between a legislative debate in 2003 or more "education" to lay the groundwork for future years. Next week marks the one-year anniversary of a report by a Social Security commission that outlined three plans for investment accounts. The panel, appointed by Bush, called for a year of discussion.

The report was issued to some derision, in part because of the stock market's swoon and the abrupt end of budget surpluses that could have financed so-called transition costs. But while support for investment accounts has eroded during the bear market, it hasn't collapsed. A USA TODAY/CNN/Gallup Poll this fall found half of those surveyed supported the idea, down from about two-thirds in 2000 and 2001.

Some analysts say the continued support reflects the fact that nearly half of U.S. households now own stocks, most of them in mutual funds, and have faith in the long-term benefits of investments.

In this year's campaigns, many Republican candidates distanced themselves from the proposed changes in Social Security. Nearly all rejected the controversial word "privatization" to describe them. But those who advocated individual investment accounts fared well in some of the most closely watched contests. Saxby Chambliss in Georgia, Norm Coleman in Minnesota and Elizabeth Dole (news - web sites) in North Carolina won Senate races in which their support for the accounts was blasted by opponents. (paragraph highlighted)

Backing individual investment accounts wasn't seen as a decisive issue in the Republicans' victories. But advocating a fundamental change in the retirement system was at worst a wash -- a seismic change from previous elections.

An aging weapon

Advocacy groups that oppose investment accounts say the issue helped make some races more competitive. But they are hard-pressed to cite a close race in which Social Security helped a Democratic candidate defeat a Republican who supported the idea. "Democrats found it more difficult than they anticipated to focus on the trade-offs" because Republicans spoke only in generalities, says Hans Riemer of the liberal Campaign for America's Future, which financed ads on the issue.

But Michael Tanner of the libertarian Cato Institute, a leading advocate of private accounts, declares, "The 'third rail' is dead." That's a reference to the political truism that Social Security is like the subway's electrified third rail. Touch it and die.

The pledge to protect Social Security has been the most reliable weapon in Democrats' arsenal since President Roosevelt pushed for its creation over GOP objections in 1935. But it apparently has lost some of its power. More voters now say the system needs to be changed. Analysts warn

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that it will be strained by the looming retirement of the baby-boom generation. In the USA TODAY survey in September, seven in 10 said Social Security faced major problems or a crisis.

In the past, an overwhelming majority of voters saw Democrats as more trustworthy on Social Security. But this year, that edge had narrowed to about 8 percentage points by Election Day, according to Bush pollster Matthew Dowd, a senior strategist for the Republican National Committee (news - web sites).

"The question for voters is how fundamental reform needs to be made, not if there needs to be reform," Dowd says. "It's such a huge issue that it may not be able to be finally closed for a few years. But at least it's ripe for a real, serious discussion."

Support from younger voters

Individual investment accounts have considerable political appeal among some groups, especially younger voters who doubt that Social Security will be financially sound enough to support their retirements. In the USA TODAY survey, the clearest factor affecting attitudes toward the accounts was age: The younger you are, the more likely you are to support them.

More than two-thirds of those 18 to 29 favored investment accounts. The proposal was supported by 57% of those 30 to 49. Only among people 50 and older did a majority, 55%, oppose it.

In the wake of the elections, opposition to the concept isn't likely to be as united among Democrats in Congress. Some influential party thinkers, including Will Marshall of the centrist Progressive Policy Institute, are arguing that Democrats have faltered by failing to outline solutions to Social Security's long-term solvency problems.

"In 2000, George Bush touched what was supposed to be the 'third rail' and wasn't electrocuted, and now it's happened again" for some Republican candidates, Marshall says. "Democrats have made a mistake in simply saying what we're against."

Others vow to continue the fight. "What the Republicans did was obscure the issue," says Rep. Bob Matsui, D-Calif., the point person for House Democrats on the issue. He says establishing the accounts would require such controversial steps as cutting benefits, increasing taxes or using other government revenue to support the system.

"I would welcome a debate," Matsui says. "We'll expose them."

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JUN-21-2002 10:00 DOLE 2002 COMMITTEE INC 704 630 6925 P.04

Copyright 1999 Crain Communications, Inc.
Pensions and Investments
June 28, 1999

SECTION: News; Pg. 1
LENGTH: 1256 words
HEADLINE: PRESIDENTIAL HOPES: CANDIDATES HAWK THEIR PROPOSALS FOR SOCIAL SECURITY
BYLINE: Vineeta Anand
BODY:

WASHINGTON -- Social Security reform is emerging as one of the top issues in next year's race for the White House. Many of the leading contenders for the Republican and Democratic tickets are staking out their positions on this issue early on.

While few of the candidates have detailed proposals for resuscitating the Social Security system, all of the leading Republican candidates broadly favor letting workers invest a portion of their Social Security payroll taxes directly in the securities markets through IRA- type accounts.

Most recently, GOP front-runner George W. Bush and his rival Elizabeth Dole signaled their support for such an approach, joining millionaire publisher Steve Forbes, Sen. John McCain, R-Ariz., and Rep. John Kasich, R-Ohio, who already had stated their preferences for giving individuals some measure of control over investing their Social Security taxes. Last week, former Vice President Dan Quayle joined the other Republican contenders in supporting private accounts, but instead of using the payroll tax itself to invest In the securities markets, he would let individuals invest part of the current Social Security surplus. On the Democratic side, Vice President Al Gore is wedded to the Clinton administration proposal to invest part of the Social Security trust funds directly in the stock market, and strongly opposes giving individuals any form of control over investing their payroll taxes.

***

Dole endorses 'lockbox'

Ms. Dole also has discussed her thoughts on Social Security In sketchy terms at townhall meetings. She favors a "lockbox" approach, setting aside the entire Social Security surplus to pay for strengthening the system; she supports the creation of individual Social Security accounts; and she opposes President Clinton's proposal to let the government directly invest a portion of the assets in the stock market, according to a spokesman. (paragraph starred)

***

GRAPHIC: Republican presidential hopeful Elizabeth Dole has expressed support for letting individuals invest part of their Social Security taxes.

handwritten at bottom of page: 4

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JUN-21-2002 10:00 DOLE 2002 COMMITTEE INC 704 630 6925 P.05

Copyright 1999 News World Communications, Inc.
The Washington Times
October 15, 1999, Friday, Final Edition

***

Q: House Republicans planned to spread payments for earned income tax credits over 12 months to help balance the budget. Did that give the Impression, as Gov. George W. Bush said publicly, that House Republicans were trying to "balance the budget on the backs of the poor" - or did It at least open the way for Democrats to make that allegation in the 2000 elections?

Mrs. Dole: Well, there are other benefits that are given in the same way i.e., monthly, instead of in a lump sum and this would have made it consistent with the others.

Obviously, we have to have a safety net in this country - that's very important.

But I feel the key here is a broader point and that is that with leadership - I think the Congress and the president of the United States, the White House, should be able to sit down together and hammer out a budget, just like a family has to balance its checkbook. They can do the same thing. And we know there's pork in there. We know there are areas that can be cut, definitely. I would do a lot more privatization and I have the experience of having done that in a number of areas.

So, I'm just looking at what I would have done. And I think that this can clearly be done and I would respect spending caps. At the same time, I'm making certain that Social Security is locked down. That the surplus is going to be used for Social Security. And then on the non-Social-Security operating surplus - that's where you could move forward to limit your tax cuts. But clearly, Congress and the president ought to just sit down and hammer it out. Work together. (paragraph starred)

handwritten at bottom of page: 5

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Page 2 of 5
handwritten at top of page: Social Security (Red folder)

But Republicans say the Democrats are cynically pulling an old scare tactic out of the closet to try to regain control of Congress.

"Frankly, I'm sick and tired of national Democrats, year after year trying to say that Republicans are going to destroy Social Security," Dole said in an interview. "All the demagoguing. I think it's shameful. I think the American people are sick and tired of it." (paragraph highlighted)

The campaign talk is part of a continuing debate about how to financially prop up the Social Security program, which was created in 1935 as a cornerstone of Franklin Roosevelt's New Deal.

Social Security provides benefits to about 46 million Americans, including more than 1.2 million North Carolinians. The program not only provides pensions for retired workers but also extends benefits for widows, dependent children and the disabled. It is financed by a 12.4 percent payroll tax that is paid equally by the employer and the employee.

In 1960, there were five workers supporting every Social Security recipient. Today there are three, and in 2030 it is projected there will be only two workers for every recipient.

Unless something is done, Social Security is projected to run into financial problems in 2017 and to go broke by 2041. (paragraph highlighted)

During the last presidential campaign, President Bush proposed allowing younger workers to invest part of their Social Security contributions in personal savings accounts. In December, the President's Commission to Strengthen Social Security recommended three options for allowing some private investment.

But with the stock market in decline, Republican candidates have downplayed support for privatization, while Democrats have sought to make it a campaign issue.

Dole, a former secretary of transportation and labor, continues to support the Bush idea for private accounts, although she steers clear of using the word "privatization" -- a move GOP consultants are advising their candidates. (paragraph highlighted)

Dole said she would support allowing younger workers to invest "a very small portion" of their Social Security payroll tax into a diversified index fund for stocks or bonds as a way to gain a larger return and to stabilize the system. (paragraph highlighted)

"Here is what I would put on the table -- on the battleground of ideas," Dole said. "I think it is less than 2 percent -- the return people are [now] getting. If you were to go to bonds ... you get more than that. Let's take a senior retiree. I would not ever support cutting that person's benefits or increasing their taxes. If that senior has a grandson who voluntarily wanted to take a very small portion of that payroll tax and wanted to put it into a diversified index in a stock or bond market, like a 401(k), then so be it. That is something we should look at." (paragraph highlighted)

Republicans are sensitive about Social Security reform, and this week the National Republican Campaign Committee issued a memo to candidates saying they should insist that reporters refer to GOP Social Security plans as "personal accounts," not privatization.

"I would never want to privatize the system," Dole said. "The government would still be administering this. But it would provide an opportunity for more return on investment. If we don't find some kind of way to increase the return on investment, then that's when we are going to be in deep trouble." (paragraph highlighted)

8/28/2002

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Dole said no independent assessments of the transition costs have been done, but she said the cost of doing nothing would be "astronomical." (paragraph highlighted)

Her most visible rival in the seven-candidate GOP primary, Jim Snyder, a Lexington lawyer, also supports a partial privatization plan.

Under Snyder's idea, adults would continue under the current system, but 16-year-olds would be part of a new plan in which 75 percent of the money could go into the equivalent of Treasury bills and 25 percent could go into approved, high-quality investments.

"The funds would be entirely segregated, fully independent not only of other government expenditures but in effect be private funds -- analogous to a private portfolio -- joined together with millions of others which would help fuel our great economy," Snyder said.

Social Security has emerged as an issue, in part, because senior citizens are the most conscientious group of voters. During nonpresidential elections, people over age 60 make up a larger percentage of voters.

With economic anxiety rising, some experts think Social Security could be a dangerous issue for Republicans.

"This is an issue very much driven by the status of the economy of the moment," said Susan MacManus, an expert on voting by senior citizens at the University of South Florida at Tampa. "In an economic downturn, it becomes an even more important concern for those seniors who are dependent upon it."

Democrat Erskine Bowles, a Charlotte investment banker, said the Social Security debate involves more than politics. He said privatization is "bad economics."

Bowles said Social Security is a pay-as-you-go program, with today's workers supporting the current retirees. Diverting part of the Social Security payroll tax to private accounts would create a $1 trillion hole in the program. (paragraph highlighted)

"Where do you get this money?" Bowles said in an interview. "It can only come from reducing the guaranteed benefit, raising the payroll tax or increasing the national debt by $1 trillion. I think any of those are a dumb idea. I think it's too risky. Social Security is supposed to be a guarantee -- a floor. It's not supposed to be a gamble." (paragraph highlighted)

Bowles said that even more conservative investments, such as bond index funds, fluctuate. (paragraph highlighted)

Republicans note that when Bowles served as President Clinton's White House chief of staff, he was part of a group that talked about a new program to allow Americans to invest 2 percent of their earnings -- on top of the 12.4 percent Social Security payroll tax -- in private investments with tax advantages. (paragraph highlighted)

Bowles said the White House was looking at ways of improving national savings, rather than altering the Social Security program. (paragraph highlighted)

"I don't have a strong opinion for it or against it," Bowles now says of the 2 percent private fund plan. "I don't think I ever expressed one." (paragraph highlighted)

Other major Democrats are equally opposed to privatization.

8/28/2002

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"Many people rely exclusively on Social Security as their income when they retire," said state Rep. Dan Blue, a Raleigh lawyer.

Blue said Social Security recipients ought not to have their retirement funds wiped out by "corporate greed," as has occurred with some private pensions.

When asked how they would fix the Social Security system, the Democratic Senate candidates tend to fall back on generalities. They largely avoid proposing any of the painful choices that most experts think will be required of a long-term solution -- such as raising taxes, raising the retirement age, means testing or allowing private accounts.

Blue said he would ensure that the Social Security trust funds are kept separate from general revenue.

"I think we ought to make Social Security secure," Blue said. "The specific way to do it, I've not settled on it."

Bowles said he would work to re-create the balanced budget of the Clinton years, and that would enable Social Security to become more financially secure.

Marshall said some tinkering with the Social Security system, such as raising the earnings subject to the tax, should be considered.

Cynthia Brown, a former Durham City Council member and a consultant to nonprofit organizations, said she would eliminate the $84,900 cap on income taxed for Social Security purposes.

"When you think about multimillion salaries, people who make $38,000 per minute ... that means after January 1 you are no longer paying into the Social Security system," Brown said. "There is something fundamentally flawed about that."

Voters, such as Shinal, will be watching to see whether candidates offer any solutions to help fix the Social Security system.

"I do have a concern," Shinal said, "about whether the system will support people my age. And I'm only 50."

----------------------

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Meredith Williams
Press Assistant

www.ElizabethDole.org

Elizabeth Dole for U.S. Senate
P.O. Box 2109
Salisbury, NC 28145

8/28/2002

Newspaper Clippings Re: Social Security Debate, Dole for Senate 2002

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