- The Washington Times - Monday, August 19, 2002

A recent rash of news stories report that some House Republican candidates are running away from President Bush's plan to let workers invest part of their Social Security taxes in the stock market.
One story in The Washington Post says these Republican candidates are deserting Mr. Bush on his Social Security plan because of the decline in stock prices that has deflated 401(k) retirement plans. What these stories do not say is that, despite some candidates' fears about how this issues plays in their districts, support for Mr. Bush's plan is stronger than ever.
A huge majority of voters say their public support for the plan is in part predicated on the stock market's decline. That is to say, they want more control over their Social Security contributions because many workers do not trust the government to make good on its promises to pay future benefits.
In fact, this was one of the pivotal findings in a nationwide survey of 1,109 likely voters conducted by pollster John Zogby, known for his independence and remarkably accurate campaign polls. He has a reputation for polling only registered voters who say they intend to vote in the next election, giving his surveys much more credibility.
Mr. Zogby's poll of a cross-section of voters was conducted for the Cato Institute July 8-12, two weeks after the WorldCom accounting scandal broke and during a bleak period when the Dow had plummeted 695 points.
His most remarkable finding was that, despite the market's collapse, most of the voters he interviewed still supported Mr. Bush's plan to put part of their tax payments into their own personal retirement accounts that they would control.
"While people are clearly concerned about recent market turmoil, there is a fundamental belief in controlling your own retirement that trumps any volatility," Mr. Zogby said.
Mr. Zogby asked voters: "There are some in government who advocate changing the Social Security system to give younger workers the choice to invest a portion of their Social Security taxes through individual accounts similar to IRAs or 401(k) plans. Would you?" Their response: 68.1 percent said they supported such a plan, while 29.2 percent did not.
This should not be surprising since 66 percent of all likely voters own stock, either directly or through their 401(k) plans or IRA accounts.
Notably, support is strongest among younger workers. Mr. Bush's plan won the support of 82.8 percent among ages 18 to 29, 76.4 percent among ages 30 to 49, 64.4 percent among ages 50 to 64, and 54.5 percent among those 65 and older.
The killer question that goes to the heart of what Democratic leaders hope will be the key issue in the November elections asked voters why they liked the idea of individual Social Security investment accounts.
The chief reason given by nearly 40 percent of those polled: "I control money in my account." Another 26 percent said, "People should be allowed to invest privately." And 15.6 percent said they liked such plans because of the "higher retirement benefits," while 14.4 percent said they would be able to leave the money accrued in the plans to their children or other heirs.
Mr. Zogby then gave voters two statements and asked them which one they agreed with:
"(A) [The Democrats attack line]: The Enron scandal shows the dangers of the stock market and why we must maintain Social Security as it is and not allow individuals to invest their payroll taxes in personal retirement accounts.
"(B) [The administrations response]: The Enron scandal proves that people need more choice and more control over their retirement savings, including allowing workers the option to invest part of their Social Security taxes in a personal account."
A stunning 63.6 percent chose B, while only 29 percent picked A.
In other words, the survey results contradicted news stories suggesting that the market's decline has scared people away from investing in the stock market for their retirement. The corporate accounting scandals have reminded workers that they need to have more control over their retirement investments, not less, over the long term.
Some congressional candidates, because of the demographic makeup of their districts, or because their opponent is demagoguing Mr. Bush's plan, may choose to sidestep this issue right now, though I think that is a mistake.
Democratic opponents of Mr. Bush's plan should be asked to defend the minuscule 1 percent to 2 percent return that workers can expect from their payroll taxes in their retirement years. Minorities, who statistically have shorter lifespans on average, will get a negative return on their tax dollars and will have nothing to leave to their heirs.
Meantime, it is worth noting that the newspaper stories I have seen rarely, if ever, mention that risk-free government bonds are also one of the investment options under Mr. Bush's plan. This is either bad reporting or a deliberate effort to make Mr. Bush's plan appear riskier than it really is.
Even bonds would provide a better return than the present system.

Donald Lambro, chief political correspondent for The Washington Times, is a nationally syndicated columnist.

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