Brownback Pushes Private Social Security Retirement Accounts
Thursday, March 29th 2007, 2:42 pm
News On 6
WASHINGTON (AP) _ Republican presidential candidate Sam Brownback said Social Security can be fixed with private savings accounts, a case President Bush has made without success during his second term in office.
Workers would invest a little less than half of their payroll taxes in stocks and other market-based investment funds under a plan the Kansas senator will he will lay out details in a speech to the anti-tax Club for Growth in Palm Beach, Fla., on Friday.
``The funds, instead of going into the government, are going into personal accounts that will be invested in the economy, creating capital and growth and economic activity,'' Brownback said in an interview Thursday.
``This would reduce the size of the federal government overall,'' he said.
Brownback is well-liked among conservatives because of his firm stances social issues, such as his resistance to gay marriage, embryonic stem-cell research and abortion. But he wants to be thought of as a fiscal conservative, too.
Under his plan, people could choose to remain in the old system, but young people would automatically get private retirement accounts as they enter the work force.
A grim future looms for Social Security. As post-World War II baby boomers begin retiring, the system won't collect enough taxes to pay for retirement benefits. Without big changes, the government likely will have to raise taxes or reduce benefits to pay for the system.
Brownback would raise money to pay for the shortfall by having the Treasury Department issue securities. The government would stop issuing debt once benefits paid to those in the old system drop below payroll tax revenue.
Opposition from AARP helped scuttle private accounts when Bush promoted them in 2005. The lobby group for older Americans fears the volatility of the stock market _ particularly in light of a Feb. 27 meltdown that sent the Dow Jones Industrials plunging 416 points.
``These kinds of proposals change the nature of the program and add unnecessary risk,'' said David Certner, legislative policy director for AARP.
``We do want to leave room for debate on the best way to deal with Social Security's long-term solvency, but proposals like this don't really deal with the solvency issue at all,'' he said.
Brownback said that even in the most volatile years, the rate of return on stock investments is positive.