Texas Gov. George W. Bush yesterday called for strengthening Social Security by letting workers invest part of their payroll taxes in private accounts, a plan Vice President Al Gore promptly labeled as reckless.
“There is a fundamental difference between my opponent and me,” Mr. Bush told an audience of seniors in Rancho Cucamonga, Calif. “He trusts only government to manage our retirement. I trust individual Americans. I trust Americans to make their own decisions and manage their own money.”
Mr. Gore, who last week warned of Mr. Bush’s “secret” plan to meddle with Social Security, yesterday pronounced the newly introduced plan too risky.
“Today, when Wall Street is booming, I know that plan sounds appealing,” the vice president said in Ambler, Pa. “It probably sounds like an easy way to make more money and have more control over your retirement.
“But in reality, the Bush Social Security privatization plan would weaken our economy and undermine the basic guarantee of a minimum decent retirement,” he said.
Mr. Bush, breaking with a decades-long Republican tradition of refraining from tinkering with Social Security, sought to pre-empt the vice president by declaring the sacrosanct program “a test of presidential candidates” and “a measure of seriousness and resolve.”
“Too many times, Social Security has been demagogued to frighten the elderly for political advantage,” he said. “Too many candidates have traded on the problems of the system instead of correcting them, shoving them off for others to handle some future generation, some other president and some other Congress.
“I am here with a message for America, and to put my opponent on notice: The days of spreading fear and panic are over,” the Texas governor said. “The days of delaying, dividing and demagoguing are over. When I am elected, this generation and this president will save Social Security.”
Mr. Bush also sought to turn the tables on Mr. Gore by raising doubts about the vice president’s Social Security plan.
“At a time for leadership for long-term thinking my opponent proposes a Band-Aid approach,” Mr. Bush said. “He says: ‘If it ain’t broke, don’t fix it.’ But in the lifetime of some people in this room, it will be broke and we must fix it.”
He added: “For eight years, the Clinton-Gore administration has failed to act and now wants to pass the burden on to future generations. The Gore plan will eventually require either a 25 percent increase in income taxes the largest in our history or a substantial reduction in benefits.”
His plan will give workers the choice of investing up to 2 percentage points of their 12.4 percent payroll tax into IRA-type accounts, and stock and bond mutual funds.
Within hours of Mr. Bush’s speech, the vice president was defending his own Social Security plan and counterattacking the Texas governor’s proposal.
He warned that the Bush plan would transform a universal safety net into a high-risk gamble that would pit unskilled investors against those who are more successful at playing the markets.
“If we turn the Social Security system into a system of winners and losers, we will be jeopardizing retirement security for too many Americans,” Mr. Gore said. “In the end, we will all have to pay to make up the difference.”
The vice president warned that Social Security is “not just a way to make money in the stock market,” but “a solemn compact between the generations. It is a basic guarantee of retirement security, built on a guaranteed minimum benefit.
“No matter what’s happening on Wall Street, no matter how the economy is doing, Social Security is supposed to be there to guarantee a decent retirement for every American,” he added.
Yet the vice president, mindful of Americans’ growing love affair with the stock market, was careful not to attack Wall Street too severely.
“Investing in the stock market is not only good for individual Americans, it’s good for America,” Mr. Gore said. “But that kind of private investment is not meant to replace Social Security. Rather it is intended to build on the foundation of Social Security.”
Mr. Bush tried to portray the vice president as someone who personally enjoys the benefits of the stock market while wishing to deny those benefits to less fortunate Americans.
“Al Gore, who calls these bipartisan proposals risky, has a substantial amount of his money invested in the stock market,” Mr. Bush said with a smile. “If he is building his own retirement security in the market, why does he object to young Americans doing the same?”
The Gore campaign hastened to insist the vice president has no money tied up in stocks. There is stock in Occidental Petroleum Inc. in a family trust fund for him that he does not yet own.
Mr. Bush repeatedly tried to reassure senior citizens that his plan would not jeopardize their retirement benefits.
“Let me put this plainly: For those on Social Security or close to receiving it nothing will change,” he said. “Yet without reform, younger workers face a great risk: A lifetime of paying taxes for benefits they may never receive. The reforms I have in mind will actually increase their retirement income.”
Mr. Bush emphasized that top Democrats including Sen. Bob Kerrey of Nebraska and Sen. Daniel Patrick Moynihan of New York, both Gore backers have sided with the Texas governor on the need for partial privatization of Social Security. Mr. Gore himself favored partial privatization until as recently as last year.
But Mr. Gore countered that his own plan would shore up Social Security, which is expected to run out of money by 2037, while also paying off the national debt.
He said the Texas governor’s plan would leave a $1 trillion hole in the Social Security fund at a time when the vice president says Mr. Bush already plans a tax cut of nearly $2 trillion.
“That’s bad for our nation’s economy, because the numbers just don’t add up,” the vice president said.
White House Press Secretary Joe Lockhart joined in the attack, saying the Bush plan “is based on the fact that he hopes that the stock market does well.”
Mr. Bush also pledged to strengthen Medicare by providing prescription drug coverage and other expansions of the medical insurance program for the elderly.