The Associated Press
Thursday, Sept. 7, 2000; 3:29 a.m. EDT

PORTLAND, Maine –– The nation's top Social Security administrator has "serious reservations" about creating individual savings accounts using portions of payroll tax revenues, an idea favored by Republican presidential candidate George W. Bush.

Social Security Commissioner Kenneth S. Apfel said "carving out" money from the 12.4 percent payroll tax and using it for savings accounts would make less money available to current recipients.

"The taxes that we all pay go to pay benefits to people," Apfel told the Portland Press Herald in Thursday's editions. "If we take that money and you keep it in your own individual account, then how are we paying for your grandma? That's a real serious question."

He said some of the federal surplus – projected by the Congressional Budget Office at $4.561 trillion over 10 years – should be used instead to strengthen the program, which has given older Americans a safety net since it was signed into law by President Franklin D. Roosevelt in 1935.

He declined to comment on the Social Security plans proposed by Bush and his Democratic opponent, Vice President Al Gore. But his comments appear to put him at odds with Bush's proposal.

The Texas governor wants to let younger workers put about one-sixth of their payroll taxes into savings accounts that they would own and control. The campaign has estimated that a young worker earning $20,000 annually could retire with more than $100,000 after inflation by investing the money in stocks and bonds.

A spokesman for the Bush campaign, Ken Lisaius, said the savings accounts would ensure a high rate of return and stressed that Bush is opposed to letting the government invest Social Security funds in the stock market.

"The governor believes Social Security is a defining American promise and he's dedicated to keeping it," Lisaius said. "But the only way to do it is through reforms."

Gore has proposed voluntary "retirement savings plus accounts" funded by employee contributions, up to $2,000 per year, beyond their Social Security payroll taxes. The program would not divert any Social Security payroll taxes.

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On the Net:

Social Security Administration: http://www.ssa.gov

Gore site: http://www.algore2000.com

Bush site: http://www.georgewbush.com