As President Bush laid out his second-term agenda to a group of black pastors and community and business leaders at a recent meeting, one of the first subjects he raised was Social Security. Bush called his plan to restructure the program crucial to all Americans -- but none more so than African Americans, who he said are shortchanged by the current system.
"The president said Social Security reform is especially important to the African American community because it is so closely tied to life expectancies," said Michelle D. Bernard, senior vice president of the Independent Women's Forum, who attended the session.
 
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Black Americans' life expectancy is 72.3 years -- more than five years shorter than for whites. Black men die even sooner, living an average of 68.8 years, compared with 75.1 years for white men. It is a disparity Bush has highlighted as he has campaigned for personal retirement accounts.
"If you really think about that, you have people putting money in the system that aren't -- families won't benefit from the system," Bush said last month in an interview with The Washington Post. "And, therefore, it seems to me to make sense, if I were a part of a group of people that were being disadvantaged by the Social Security system, that I'd at least like to have the opportunity to have some of the money I put in the system passable to my family."
It is an argument some have found compelling. They say personal accounts would allow workers who die before they are old enough to collect retirement benefits to leave at least a modest nest egg for their heirs, no small matter for African Africans, one-third of whom have zero or negative net worth. Bush has said that the accounts would be tightly controlled, allowing workers to invest only in a handful of low-risk stock and bond funds.
"Private accounts could be a plus to anyone whose demographics suggest they are in the workforce, they pay contributions but they pass on before they are able to draw down benefits," said Gwendolyn King, a former Social Security commissioner who served on a bipartisan panel that recommended the creation of the accounts during Bush's first term.
Also, supporters say the accounts would expose a generation of low- and middle-income African Americans to the wealth-building power of the stock market. "Anything that gives African Americans more financial freedom with their own money and introduces African Americans as a people to investment in the stock market is good. I don't understand what the objection would be," said Robert L. Johnson, founder and chief executive of Black Entertainment Television, who also served on the panel.
But while proponents portray the accounts as wealth-building tools, others worry that they would weaken the safety net that Social Security has provided since being signed into law by President Franklin D. Roosevelt 70 years ago. "This move on Social Security is really an attack on Roosevelt," Jesse L. Jackson said. "It reflects the extreme right-wing ideology that says there should be no roof for the wealthy and no floor for the poor."
Critics such as Maya Rockeymoore, vice president of the Congressional Black Caucus Foundation, say that the promised benefits of individual accounts could prove illusory for many blacks. For one, the accounts would be subject to the whims of the stock market. "Any financial planner will tell you that retirement should rest on a three-legged stool: pensions, savings and Social Security," she said. "The only secure leg of that stool is Social Security. But if you move to private accounts and something happens to the stock market, you have a collapsed retirement stool."
Beyond potential stock market losses, Rockeymoore said, the cuts in guaranteed benefits sure to accompany them will erode many of the advantages that low-income people reap from the system. Not only does the system allow workers with modest salaries to capture a larger share of their income in Social Security benefits, but it also guarantees lifetime payments with increases meant to keep pace with the nation's rising standard of living.
In addition, Social Security retirement payments are calculated in a way that minimizes the impact of years of unemployment in a worker's career, another feature that tends to benefit blacks, whose unemployment rate is double that of whites. And, she said, blacks are more likely than whites to collect from Social Security's disability and survivor programs.
A 2003 report by the Government Accountability Office, the investigative arm of Congress, concluded that blacks tend to receive a higher rate of return than whites from Social Security because of their heavier reliance on the program's full range of benefits.
Bush's proposal would allow workers to divert into personal accounts almost two-thirds of the 6.2 percent of their salaries paid as Social Security taxes. Their guaranteed Social Security checks would shrink proportionately with the amount of money they divert, but the White House said they would recover that money as long as their accounts earn investment returns of at least 3 percent above the rate of inflation.
"The income disparities based on race will likely grow under a system of private accounts, even if whites and blacks get the same rate of return from their investments" because whites will have more to invest, Rockeymoore said.
Still, supporters of Bush's plan believe in the power of personal accounts. At a January appearance with Bush in Washington, Robert McFadden of Medford, N.J., an executive at a pharmaceutical information firm, described how his father had paid Social Security taxes for more than 30 years only to die at age 57. McFadden and his siblings were too old to collect survivor benefits, and by the time his stepmother retires, she will most likely qualify for a higher Social Security payment than his dad, so his father's contribution to the system was effectively lost.
"When my father passed, his Social Security passed with him," said McFadden, who said his fate was similar to that of many other black families. McFadden's testimony made an impression on Bush, who invited McFadden to sit in first lady Laura Bush's box during his Feb. 2 State of the Union address.
"Some people say this idea will only help people with certain lifestyles and certain incomes, but I challenge that," said McFadden, who grew up in Camden, N.J., where he is an assistant pastor. "I see seniors in my church right now who cannot even live off of what they are getting from Social Security. I think the idea of taking a small portion of your taxes and creating personal accounts in minimal-risk investments will teach people who don't save the concept that compounding interest over years provides an opportunity to increase their family's wealth."
