Social Security Debate Rages

By Trish Anderton on Thursday, October 24, 2002.

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Social Security has become a key issue in the race for U-S Senate between Republican John Sununu and Democrat Jeanne Shaheen. The candidates present clearly different views. But as NHPR's Trish Anderton reports, unanswered questions remain on both sides.

THE PROBLEM WITH SOCIAL SECURITY IS PRETTY SIMPLE: IT'S A PAY-AS-YOU-GO SYSTEM. MONEY PUT IN BY WORKERS TODAY PAYS RETIREES. THAT'S WORKING WELL FOR NOW, SINCE CONTRIBUTORS OUTNUMBER RECEIVERS. BUT THE NUMBER OF RETIREES IS BOOMING. OVER THE NEXT TWENTY YEARS THE BENEFITS GOING OUT WILL START TO OUTSTRIP THE CONTRIBUTIONS COMING IN. ACCORDING TO GOVERNMENT FORECASTS, STARTING IN 2041 THE SYSTEM WON'T BE ABLE TO PAY FULL BENEFITS.
ONE IDEA FOR IMPROVING THE SYSTEM IS TO TAP INTO THE STOCK MARKET. MANY REPUBLICANS HAVE EMBRACED THAT APPROACH, INCLUDING CONGRESSMAN JOHN SUNUNU. JULIE TEER IS A SUNUNU CAMPAIGN SPOKESWOMAN.
John sununu believes we oughta allow individuals the voluntary option to take a small portion of what they pay into soc sec and put it into an indivudyak retirement acct.
THAT WAY, AT LEAST IN THEORY, YOUR CONTRIBUTION WOULD TAP INTO THE MARKET?S HISTORICALLY STRONG GROWTH. YOU'D GET MORE BANG FOR YOUR BUCK, AND YOU'D BE LESS DEPENDENT ON FUTURE WORKERS FOR YOUR RETIREMENT. CONGRESSMAN SUNUNU.
SU: If the rate of return is higher in the long run, we're gonna have much more money in the system to supplement and even increase the minimum benefit of retirees
ONE BIG QUESTION IS HOW TO PAY FOR THAT CHANGE. PRIVATE ACCOUNTS WOULD SIPHON AWAY SOME OF THE MONEY THAT'S CURRENTLY GOING INTO RETIREES. BENEFITS. MICHAEL TANNER IS A SOCIAL SECURITY EXPERT AT THE CATO INSTITUTE, A LIBERTARIAN THINK TANK IN WASHINGTON. TANNER SUPPORTS PRIVATE ACCOUNTS, BUT HE ADMITS THEY'LL REQUIRE AN INITIAL INVESTMENT.
006 152 theres no painless way of changing the system. If you're going to try to stop a chain letter without hurting top of chain, you have to find some revenue.
QUESTIONED REPEATEDLY, SUNUNU HAS FAILED TO SAY HOW HE WOULD PAY FOR THOSE TRANSITION COSTS. COLIN VAN OSTERN, A SPOKESMAN FOR DEMOCRAT JEANNE SHAHEEN, SAYS VOTERS DESERVE TO KNOW.
If you take money out that leaves a deficit. You have to raise taxes or cut benefits or increase the deficit. None of those is acceptable.
FURTHERMORE, SUNUNU'S CURRENT STATED POSITION APPEARS TO CONFLICT WITH HIS RECORD. THE CONGRESSMAN SAYS HE SUPPORTS A SOFT APPROACH, OFFERING OPTIONAL VOLUNTARY ACCOUNTS ONLY TO YOUNG WORKERS. BUT HE HAS CO-SPONSORED A MEASURE TO CREATE MANDATORY ACCOUNTS FOR ALL WORKERS UNDER 55. THE SHAHEEN CAMPAIGN HAS ATTACKED SUNUNU, CHARGING HE'LL PUT SENIORS' BENEFITS AT RISK BY PRIVATIZING SOCIAL SECURITY. THE CATO INSTITUTE'S MICHAEL TANNER SAYS THAT'S A PRETTY FAMILIAR DEMOCRATIC APPROACH.
for twenty odd years they've beat up on republicans on the issue and the republican response is traditionally to curl up into a fetal position and beg the democrats to stop saying nasty things about them
REPUBLICANS FIND THEMSELVES CAUGHT IN A SEMANTIC TRAP OF THEIR OWN MAKING. SUPPORTERS OF PRIVATE ACCOUNTS INITIALLY EMBRACED THE WORD "PRIVATIZATION." BUT PRIVATIZATION IS A VAGUE WORD. IT COULD BE TAKEN TO MEAN THE WHOLE SOCIAL SECURITY PROGRAM WOULD BE TURNED OVER TO AN INVESTMENT HOUSE. TANNER SAYS CRITICS HAVE USED THAT VAGUENESS TO THEIR ADVANTAGE.
Over time as politics crept in many people have used it to mean something different, sort of abandoning the entire system. The result is it no longer works as shorthand.
NOW THAT DEMOCRATS ARE USING THE WORD IN ATTACKS, MANY SUPPORTERS OF PRIVATE ACCOUNTS HAVE BACKED AWAY FROM THE TERM. SOME REPUBLICANS HAVE ADOPTED THE WORD PERSONALIZATION INSTEAD. RAMESH PONNURU OF THE CONSERVATIVE JOURNAL, THE NATIONAL REVIEW, SUPPORTS THE CONCEPT UNDER ANY NAME. BUT HE SAYS REPUBLICANS ARE BEING A BIT HYPOCRITICAL.
If they'd said this is the word we used in the past but it doesn't make sense to keep using it, I think that would work better. but some are saying opponents made it up, which is just dishonest.
BUT PONNURU ALSO HAS SOME HARSH WORDS FOR THE OTHER SIDE. HE POINTS OUT THAT WHILE MANY DEMOCRATS HAVE PLEDGED NOT TO SUPPORT PRIVATIZATION, THEY HAVEN'T OFFERED A SOLUTION OF THEIR OWN.
007 111 they really have no answer to question about what they're going to do about upcoming the bankruptcy of the system.
INDEED, SHAHEEN SPOKESMAN COLIN VAN OSTERN DOESN'T OFFER ANY DETAILS WHEN ASKED WHAT KINDS OF REFORM THE DEMOCRATIC CANDIDATE WOULD SUPPORT. VAN OSTERN SAYS SHAHEEN IS FOCUSED ON PROTECTING THE SYSTEM FROM PRIVATIZATION AND PRESERVING THE SOCIAL SECURITY TRUST FUND.
001 145 beyond that there's room for both parties to work on real reforms that don't raise the retirement age, cut benefits or raise social security taxes.
BUT SOME ANALYSTS WORRY THE TONE OF THE CURRENT DEBATE WILL MAKE IT HARDER FOR THE PARTIES TO WORK TOGETHER. AGAIN, RAMESH PONNURU.
009 134 I think on the one hand you see demagoguery from the democrats, you know, republicans want to push old people down a cliff, and on the other hand you see cowardly evasion on part of the republicans.
PONNURU PREDICTS THE RHETORIC WILL PREVENT CONGRESS ACCOMPLISHING ANYTHING ON SOCIAL SECURITY IN THE NEXT TWO YEARS. MEANWHILE, SOME ANALYSTS ARGUE THE WHOLE ISSUE IS A RED HERRING. DEAN BAKER IS CO-DIRECTOR OF THE NONPARTISAN CENTER FOR ECONOMIC POLICY RESEARCH. A DEFENDER OF THE CURRENT SYSTEM, BAKER IS UNMOVED BY PREDICTIONS THAT IT WILL RACK UP A DEFICIT OF MORE THAN 20-TRILLION DOLLARS BY THE YEAR 2075.
When you look at anything for a period of 75 years, you get an enormous number.
BAKER SAYS SPREAD OUT OVER TIME, THE PROJECTED DEFICIT IS SIXTH-TENTHS OF A PERCENT OF THE GROSS DOMESTIC PRODUCT. HE COMPARES THAT TO MILITARY SPENDING, WHICH IS CURRENTLY THREE PERCENT OF THE GDP.
//. I wouldn't say its trivial, its not chump change, but we've put up with much bigger costs in the past and we may be looking at much bigger costs in terms of the war on terrorism or the war on iraq. // the idea that we should be terrified that we might have to pay this cost is a little farfetched.
BAKER ALSO POO-POOS THE IDEA THAT CONGRESS CAN FIX THE PROGRAM FOR THE NEXT SEVENTY YEARS.
I mean, we could say we were planning for 200 years, but the great thing about this country is it's a democracy and five, ten, 20 years from now, people are going to decide how social security should look and they may not like what we did now.
BAKER BLAMES CONSERVATIVES FOR HATCHING THE NOTION THAT SOCIAL SECURITY IS IN TROUBLE, AND LIBERALS FOR JUMPING ON THE BANDWAGON WHEN THEY REALIZED THEY COULD USE THE ISSUE FOR THEIR OWN POLITICAL ENDS. HE AGREES WITH CRITICS OF THE SYSTEM ON ONE CRUCIAL POINT: THAT THE DEBATE ACROSS THE COUNTRY IS CONFUSING RATHER THAN HELPING VOTERS. FOR NHPR.