No group of Americans would be affected more by President Bush's Social Security plan than those earning the least. Just ask 46-year-old Brent Allen.
Allen, who recently lost his job at a Massachusetts paper mill, faces a retirement financed exclusively by the money he has been paying into the Social Security system for the better part of 30 years. Like nearly half the U.S. population, he has no pension or savings to speak of. And his brief flirtations with the stock market have largely flopped.
So Allen, who lives on less than $15,000 a year in disability payments from Social Security and income from his live-in girlfriend, is distrustful of Bush's plan to allow workers to divert a portion of their payroll taxes into personal investment accounts.
"I have had stocks, and have had them for six years, and I have lost money continually," Allen said this week. "What's going to happen to people when they retire when the market is down? There is no guarantee [Bush] can make. There is a guarantee now," under the current system.
More than 60 million Americans 25 to 64 years old reported incomes of less than $25,000 in 2002, the latest year for which government figures are available. Like Allen, most of these workers have small or no pensions, scant savings, and serious concerns about their retirement years, according to government statistics and polling results.
Bush sees personal accounts as the gateway to their financial security -- giving them a chance to join tens of millions of Americans with significant investments in stocks and bonds for their retirement. But unless he can convince Democrats and skeptical Republicans that the personal accounts would be a wise and relatively safe investment option for low-income workers, his proposal is likely to fail, many lawmakers agree.
Bush is lobbying Congress to allow Americans younger than 55 to eventually put 4 percent of their income subject to Social Security taxes into personal retirement accounts, in exchange for a reduction in guaranteed benefits, if they choose. Those who opt to divert a part of their payroll tax would invest the money in a small menu of stock and bond funds that they could not touch until they retire. Unlike in the current retirement system, they could pass on the money accumulated in the personal account to family or friends when they die.
The president says Americans would end up with a stronger Social Security system and bigger nest eggs under his proposal, although the White House has yet to release full details of the plan.
"We can build a better system for low-income workers based on the power of investment and the magic of compound interest," said White House spokesman Trent Duffy.
Critics, including most Democrats, say individual investment accounts are too risky, they would impose restrictions on the way lower-income retirees could spend the proceeds from their accounts, and they would require unwise and costly reductions in the guaranteed benefits offered by the current system.
Because Social Security is often the biggest or the only source of retirement money for the poorest Americans, low-income workers would be hit particularly hard if the markets plunged and they were left with smaller benefits than they would have received under the current system.
Under the Bush plan, low-income workers would be required to purchase an annuity, which pays a fixed stream of money until the person dies, or set up an alternative way that keeps them above the poverty level until death using their personal account funds. The administration said such mandates are needed to keep seniors from falling into poverty by emptying out their accounts upon retirement.
Fay Lomax Cook, director of the Institute for Policy Research at Northwestern University, called the accounts "much too risky."
"The whole purpose of Social Security has always been to ensure basic income to those no longer able to work. That basic income can no longer be guaranteed" under the Bush plan, she said.