Veep Sings New Tune On Social Security Reform
May 19, 2000
Republican presidential candidate George W. Bush has proposed that young workers be allowed to divert part of their Social Security payroll taxes into private accounts where the money could be invested in corporate equities. Such a move would be voluntary, Social Security benefits would not change for anyone who does not want them to change and benefits of current retirees would not be affected in any way whatsoever.
Democratic Party candidate Al Gore quickly attacked the Bush proposal as too "risky." Political observers note, however, that Gore once thought differently about the risk of investing Social Security funds in the stock market.
- At a White House conference on January 27, 1999, the Vice President praised the stock market for offering higher returns and urged that the Social Security trust fund -- but not individual workers -- be allowed to invest in the stock market.
- "During this whole national discussion," he said, "one of the single most important, salient facts that jumped out at everybody is that, over any 10-year period in American history, returns on equities are just significantly higher than these other returns."
- He was referring to the fact that returns on Social Security investments in Treasury bonds yield about 1.9 percent, versus 7 to 17 percent average annual returns on stocks, historically.
- He went on to say that his advisers were "totally convinced" that any problems with investing Social Security funds in the stock market "can be solved pretty easily."
Source: Bruce Bartlett (National Center for Policy Analysis), "Social Security Memory Lapse," Washington Times, May 19, 2000.
Browse more articles on Tax and Spending Issues