- The Washington Times - Friday, March 1, 2002

President Bush yesterday pushed his plan to partially privatize Social Security in the face of increased anxiety about the safety of private retirement plans caused by the Enron debacle.

Touting his plan as a way for women, minorities and working-class Americans to accumulate wealth and enjoy higher living standards in retirement, Mr. Bush sought to deflect Democratic arguments that the Social Security plan exposes retirees to the devastating loss of savings experienced by Enron workers who invested their retirement funds in the bankrupt company's stock.

"At a time when older Americans have longer lives and more options than ever before, we need to ensure they have access not just to a monthly check, but to personal wealth," he said, noting that the return on payroll taxes for American workers currently is only 2 percent.

A typical worker who retires today after 45 years of employment gets a monthly Social Security benefit of $1,128. But if his payroll contributions had been invested in stocks over the same time, he would have a nest egg totaling $590,000 and yielding a monthly income of $3,700, Mr. Bush said in an address to the National Summit on Retirement Savings hosted by the Labor Department.

With the savings rate, at just 1.6 percent last year, hovering near historic lows, most Americans are not putting aside nearly enough for retirement, he said. Working-class Americans in particular rarely build up nest eggs large enough to ensure a comfortable retirement. A stunning 80 percent of baby boom workers now expect to work some during retirement because of that savings shortfall, he said.

"Increasingly, the choices of seniors will only be limited by two things: the state of their health and the state of their savings," he said. Saving is "hard for some to do," but a mandatory savings program under the Social Security umbrella is one way the government can help people to do it and build up wealth, he said.

"The generation of wealth should not be limited to a few in our society; it ought to be an opportunity for everybody," he said, noting that a leading black entrepreneur, Robert Johnson, founder and chief executive officer of Black Entertainment Television, has endorsed partial privatization as a way for blacks to build wealth and pass it on to their children.

Despite the appeal of creating private nest eggs, Democrats believe they can tap growing anxieties about retirement security. They are stoked by deep losses in the stock market in the past two years and heightened by the highly publicized loss of nearly $1 billion in 401(k) retirement savings by Enron workers.

A poll last week by the Pew Research Center found that one-third of Americans said the Enron collapse has made them more concerned about their own retirement savings.

All of Enron's contributions to 401(k) accounts was in company stock that is now worthless. In addition, many Enron employees invested all or most of their own contributions in the stock, though they had other choices. Enron provided its workers with a regular pension plan that is still viable, however, which makes Enron workers better off than most Americans who are covered by only one plan, if at all.

The principal lesson from the Enron scandal is that "people are worried about their retirement security, and they should be," House Minority Leader Richard A. Gephardt said at a news briefing yesterday.

The Missouri Democrat called for a House debate on Mr. Bush's Social Security plan this year, and said he will seek to force the measure to the floor of the House with a discharge petition like the one used successfully by Democrats last month to force passage of a campaign finance reform bill.

Mr. Gephardt noted that House Majority Leader Dick Armey, Texas Republican, this week also called for debate on the Social Security plan, despite worries among other House Republican leaders that the public fears stirred up by the Enron scandal would create a favorable issue for Democrats at a time when control of the House is a factor in the upcoming elections.

Mr. Gephardt said he might be able to get the 218 votes needed to discharge the Social Security measure and bring it to the House floor if conservative Republicans who agree with Mr. Armey join House Democrats in signing onto the petition.

"The people of this country deserve to have a full debate" on the Republican plan versus the Democratic platform of keeping Social Security as it is while seeking to shore up the government's finances and ability to pay benefits to the baby boomers by eliminating the national debt, Mr. Gephardt said.

In an effort to pre-empt Democratic scare tactics, Republican leaders have proposed sending all current retirees a certificate guaranteeing that their benefits will not be cut under the privatization plan, which is voluntary.

Mr. Gephardt belittled that plan as a "PR exercise" and said it would cost taxpayers between $10 million and $20 million.

He was joined by Social Security Commissioner Jo Anne Barnhart, who testified yesterday that the plan would "use valuable administration funds" and might cause "undue alarm" among seniors who mistakenly do not receive certificates.


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