- The Washington Times - Tuesday, January 4, 2000

Most of the Republican presidential contenders support the idea of creating personal Social Security retirement accounts but, with the exception of Steve Forbes, they appear to be downplaying the issue for now.

Among all of the domestic issues being debated in the 2000 campaign, few would affect more people than the idea of letting workers put part or all of their Social Security payroll taxes into their own tax-free investment plans. But some Republican strategists think the issue is being woefully underplayed.

"Every poll I have seen shows saving Social Security is a major issue on the voters' minds. And the candidates ignore it at their peril," said Mike Shields, president of SocialSecurityPlus.org, an organization lobbying to turn Social Security into a system of private retirement accounts.

"It would be a shame if Republican candidates did not step up to the plate in this vacuum and communicate a positive message about creating personal tax-free retirement accounts," Mr. Shields said. "It would profoundly change the country."

It is estimated that about 75 percent of all Americans pay more in Social Security payroll taxes than they do in income taxes, but the benefits that retirees get back "are quite low. Most workers will only receive the equivalent of a 1.2 percent rate of return on their taxes," according to a new study published by the Heritage Foundation.

If workers were permitted to invest their payroll taxes in government bonds, "they would earn 3.4 percent after inflation over twice as much," the study said.

Stocks have provided an average of 7.5 percent real rate of return annually since the mid-1920s.

"It could be the sleeper issue of the 2000 election. My polling shows it's a popular but divisive issue, with a majority supporting some form of privatization," said independent pollster John Zogby.

But the major candidates have had relatively little to say on the issue up until now, outside a perfunctory endorsement of the idea.

Texas Gov. George W. Bush has said he is for letting workers invest part of their payroll taxes into stock portfolios, but so far he has not initiated any major discussion of the issue in his stump speeches or in interviews.

"He talks about it occasionally. It's something he will talk more about as the campaign progresses," said Mindy Tucker, Mr. Bush's campaign press secretary.

Other Bush advisers said the Republican front-runner intends to delay discussing the idea more fully until after the presidential primaries, when he thinks the voters will be paying closer attention to the campaign.

"You have got to have something to talk about in the general election," one adviser said.

But another reason for not pushing the issue into the front ranks of campaign debate at this time is the fear of its impact on the eve of the Iowa caucuses and the New Hampshire primary, political analysts say.

"The strategy for downplaying it is that they do not want to be too out front on this for fear of alienating the all-important independent voters in Iowa and New Hampshire," Mr. Zogby said.

At the same time, both Vice President Al Gore and his only Democratic rival, former Sen. Bill Bradley, are staunchly opposed to privatization. Mr. Gore has attacked the GOP for wanting to "destroy" Social Security, even though many Democrats, including Sens. Daniel Patrick Moynihan of New York and Bob Kerrey of Nebraska support personal retirement accounts.

Mr. Bush "clearly understands the way this issue is demagogued," Miss Tucker said. It is for that reason that Social Security has come to be known as "the third rail" of American politics.

Sen. John McCain of Arizona, Mr. Bush's closest rival for the nomination, also supports the idea, and aides say he plans to discuss it in greater detail in a speech soon.

But in response to a formal request from The Washington Times to search Mr. McCain's legislative record, his Senate aides say that he has not introduced or co-sponsored any of the bipartisan bills in Congress that would enact such a reform.

Still, he has promoted the idea in the past, most recently in a speech in June in Sun City, Ariz., where he said the only way to save the program was to let "workers invest some of their Social Security savings, privately, in higher paying accounts."

Yet when Mr. McCain ran a TV ad on Social Security in New Hampshire last week, it did not contain a single reference to personal retirement accounts. Instead, he clung to the politically safe promise that he would "not allow your Social Security money to be used for any purpose except Social Security. No ifs, ands or excuses."

"No, it's not mentioned in the ad. You can't lay out all your proposals in a 30-second ad," said McCain campaign spokesman Howard Opinsky.

But Mr. Forbes, who has made privatization a central issue in his campaign, does just that in his latest TV ads on Social Security. In one ad running in New Hampshire this week, he calls for a new Social Security system "where you control your retirement account, not the politicians or bureaucrats."

A line in his stump speech tells voters that ordinary workers starting in the work force today can end up with a retirement nest egg of $2 million by being allowed to invest their money in an IRA-type stock and bond fund over their working life.

Pollsters say the idea to privatize Social Security resonates strongly with younger professional voters and with some traditional Democratic voting groups like Hispanics.

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