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Social Security reform coming, but not soon
Advisory panel offers three proposals
January 5, 1997
Web posted at: 10:30 p.m. EST
WASHINGTON (CNN) -- A proposal to let taxpayers opt to pay into private retirement investment accounts instead of Social Security is a "nonstarter," Senate Democratic leader Tom Daschle said Sunday.
The proposal is one of three being forwarded Monday by a 13-member federal advisory panel that spent more than two years studying options for reforming the Social Security program.
Government figures indicate that without changes, Social Security will begin in 2012 to pay out more than it takes in, and could go broke by 2029.
Haven't 'thought it through'
But with the generation of baby boomers watching and worrying, the experts could not agree on a single best reform option.
"If they can't come to a conclusion, they're reflecting the American public that hasn't thought about this yet, hasn't thought it through," said Health and Human Services Donna Shalala.
The mandatory personal retirement accounts, allowing owners to help decide how the money is invested, may appeal to taxpayers worried about ever seeing the money now deducted from their paychecks. But it is not finding immediate appeal among some politicians.
"I think it's a nonstarter," Daschle, a South Dakota Democrat, said Sunday on CBS' "Face the Nation."
Daschle said he supports a pilot project to test the profitability of investing some Social Security trust funds in the private sector, "but I am not in favor of the privatization of the Social Security system."
House Majority Leader Dick Armey, a Texas Republican, also on CBS, said private investment was "an attractive option for younger people."
But he said the government's first obligation is to protect its commitments to those already dependent on Social Security.
No quick decision planned
The concern of many is to protect people who may not know how best to invest -- and to protect taxpayers from having to bail out fellow citizens who may invest poorly.
"If they invest poorly and there isn't an adequate income for their retirement, just what will we do with them? Will society turn its back?" said Tom Jones, of the Social Security Advisory Council.
Another option to be announced by the panel on Monday is to raise Social Security and Medicare taxes. A third calls for investing some Social Security contributions in private stock.
Congressional leaders, who must decide on the course of reform, are predicting no decision for at least two years.
"I think we've got to go slow," said Rep. John Kasich, an Ohio Republican and House budget chairman. "We've got to know what we're talking about. We've got to study all the various options that are out there."
Reporter Kathleen Koch and The Associated Press contributed to this report.
Related stories:
- Social Security advisory panel disagrees on everything - December 8, 1996
- Private investments may replace ailing Social Security system - October 4, 1996
- Social Security: on its way to bankruptcy - October 3, 1996
- Putting Social Security on Wall Street - February 16, 1996
Related sites:
Note: Pages will open in a new browser window- Social Security Administration Online
- Social Security Reform - The Congressional Instiutue
- AARP - Social Security: Crucial Questions & Straight Answers
- Fidelity - The Importance Of Investing For Retirement
- Vanguard - Facing Your Retirement Navigator
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