- The Washington Times - Monday, August 14, 2000

Today, Aug. 14, Social Security so good to millions of seniors reaches the retirement age of 65.

Fortunately a growing number of Democrats and Republicans in Congress are working side by side to see that the system is kept on life support while a new and improved version is being born.

Unfortunately some continue scaring seniors. Today in Missouri you will hear Vice President Al Gore excoriate as "risky" Gov. George W. Bush's plan to save Social Security. You can hear Mr. Gore now: "Social Security is 65 years old today. Medicare was 35 years old two weeks ago and President Lyndon B. Johnson came here to Independence, the home town of Harry Truman, and personally handed him the first Medicare Card. George Bush and the Republicans want to take both away. Joe Lieberman and I are going to stop them."

Never mind that Mr. Lieberman has, prior to his being picked by Mr. Gore, advocated a Social Security privatization plan quite similar to the one proposed by Mr. Bush. Never mind that the wave of the future is to allow individual workers to take some personal control of their own financial destiny by investing in Personal Retirement Accounts (PRAs).

Never mind that workers are not at the mercy of Wall Street, instead having their investments managed by firms whose fiduciary duty it is to produce as good a rate of return as possible. Never mind that Mr. Bush, while showing remarkable leadership in advancing his ideas to save Social Security, is nevertheless embracing strikingly similar proposals put forth by a growing number of Democrats in Congress. To name just a few: Sens. Daniel Patrick Moynihan (who is no "risky scheme" taker), Bob Kerrey, John Breaux and Rep. Charles Stenholm, the latter co-chair of a bipartisan coalition to save Social Security, along with Rep. Jim Kolbe.

It has been said that one party has ridden the twin horses of hypocrisy Social Security and Medicare for over 30 years. Why? To garner votes.

Pity poor Barry Goldwater. Asked in the snows of New Hampshire about the future solvency of Social Security, the Arizona senator and 1964 Republican Party presidential candidate warned that unless changes were made the day of reckoning was coming for financially strapped taxpayers. The Democratic television ads that ensued showed a giant Social Security card being cut in half with a voice darkly intoning that this would be the result if you voted for Goldwater.

If he were alive today, I believe even President Franklin D. Roosevelt, who signed into law the Social Security Act 65 years ago, would readily admit that his dream of providing a secure retirement for seniors is rapidly turning into a nightmare. A system that has helped millions of seniors escape the bonds of poverty now faces bankruptcy. Lower birth rates produce fewer workers to pay into the system while the ranks of the retired, already swollen because we seniors are living longer, will be further strained in 10 short years by 77 million retiring Baby Boomers. The old system of raising taxes is no longer feasible.

In 1935, the 2 percent tax on $3,000 income worked well when there was a glut of workers, more than 40, paying into the system to support each retiree. Seniors did not live much past the designated retirement age, instead "conveniently dying" at about 65. The tax has now risen to 12.4 percent on $76,200 income, yet the system is going broke because fewer births means fewer future workers. Add to that the fact that medical and pharmaceutical advances allow seniors to live longer.

But there are those who are on the campaign trail, especially on this historic day, who are scaring seniors with the bogus line that the present system is just fine. For instance, in a New York Times interview on March 13, Mr. Gore defended the system by saying "if it ain't broke, don't fix it. Shore it up the way we always have." That runs directly counter to President Clinton's Social Security Trustees report which states that "tax revenues will be sufficient to cover only two-thirds of expenditures." Mr. Gore then labeled Mr. Bush's efforts to "fix it" a "risky scheme." What is actually "risky" to the future solvency of Social Security is to do nothing. Or to reform the system as Mr. Gore's plan does. His call to place projected surpluses out of general revenues into individual retirement accounts sounds good at first glance, but does not explain what happens when there are no surpluses. What then raise taxes even more? This general revenue proposal must have FDR spinning in his grave, for he warned against such financing as just another welfare scheme.

Federal Reserve Board Chairman Alan Greenspan has spoken out against the Gore idea of using general revenue funds. Privatization, a path trailblazed by Chile in 1981, is now embraced by some two dozen countries around the globe. As a matter of fact, the president's Advisory Council acknowledged that the old system of raising taxes was no longer a solution. The council, however, could not offer an easy solution. In fact, the 13-member council issued three separate reports and the only common thread running through each was an acknowledgment that partial privatization was the first step toward solvency.

For years I have urged privatization or "personalization" of the system, allowing workers to take some personal control over their financial destiny. I do not do so recklessly. I do so only after being convinced that PRAs are the wave of the future. I also stepped forth at the urging of my favorite senior citizen, my own mother, who is "80 plus," and upon whom I still rely for advice. Social Security is at the top of her list of assets, but also high on her list are her other assets her children, grandchildren and great grandchildren. It's for them that we should make sure the system is solvent.

James L. Martin is president of the 500,000 member 60 Plus Association, a national, nonpartisan senior citizens advocacy organization.

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