Critics Say Gore Plan Has Nothing To Do With Social Security
June 23, 2000
Presidential candidate Al Gore has proposed a plan called Retirement Savings Plus or Social Security Plus. It would provide $200 billion in refundable tax credits over 10 years to low- and middle-income workers who choose to participate. Couples who make under $30,000 or individuals who make under $15,000 would get matching funds of $3 for every $1 invested, up to $2,000 a year.
Policy analysts note that the proposal would not affect Social Security revenues or protect it from approaching insolvency. But it would create an expensive new entitlement program.
- To obtain the $200 billion figure, U.S. Chamber of Commerce economist Marty Regalia says the Gore people "stuck a finger in the air and picked a number."
- Although the scheme is supposedly designed to encourage people to save more, Gore adviser Alan Blinder admits the Gore camp does "not know" what the participation rate would be.
- In order to shore up Social Security trust funds, the government will have to hike income taxes by at least 16 percent or borrow over $10 trillion to bail out the system between 2017 and 2037, according to Citizens for a Sound Economy (CSE).
- Gore's plan "does nothing to address the solvency of the system," says CSE's Scott Hodge, adding that the interest savings projected under his plan "would only cover 12 percent of the unfunded liability."
Source: Peter Cleary, "Gore's 'Social Security Plus' Proposal Offers New Funds, But Little Reform," Investor's Business Daily, June 23, 2000.
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