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Social Security

President, Advisers Stage First Road Show on Social Security Issues

By Ceci Connolly
Washington Post Staff Writer
Wednesday, April 8, 1998; Page A06

President Clinton today convened his first class on the complex and contentious issue of Social Security, a marathon gabfest complete with three-color charts, a satellite hookup and homework assignments.

The only thing he left out were answers. They won't come for at least a year, well after the November elections.

"People are always saying, `Well, so what's your plan?' " the president said during a forum here at Penn Valley Community College. "What I'm attempting to do here is to avoid announcing a plan while we go through this period of educating the whole electorate."

However, Clinton did offer some clues on how far he is willing to go to revamp the government program that serves 44 million retired and disabled Americans. He supports limiting Social Security benefits for wealthier retirees, opposes increasing payroll taxes and wants younger Americans to be better savers. Clinton was also receptive to the idea of personal security accounts as one component of a comprehensive overhaul.

Clinton opened this national dialogue on Social Security in his State of the Union address last January, when he urged lawmakers to hold off spending expected budget surpluses until he and Congress agree on a plan to preserve Social Security for future generations.

During panel discussions today, Clinton struck a cautious theme, reassuring today's seniors that he will not fiddle with their benefits and promising to "act with care as we make needed repairs" in the future.

Sen. Rick Santorum (R-Pa.), who accompanied Clinton aboard Air Force One this morning, said: "He doesn't want to get out ahead of the American public or Congress." Referring to the public backlash against Republicans when they proposed dramatically revamping the nation's health care program for the elderly, Santorum added, "He mentioned he doesn't want another Medicare catastrophe."

Santorum, who advocates a more radical approach that would allow individuals to invest, as they like, nearly half – 5 percentage points – of their 12.4 percent Social Security tax, predicted that a tough, partisan fight is yet to come, perhaps in the fall campaign. "I prefer him to hold his fire," he said. "I'm afraid that his plan will be one I am not eager to embrace."

The Depression-era Social Security program is now on sound financial footing. The problem comes in about 15 years, when the country's baby boomers begin retiring and the government will be asked to pay out more in benefits than it will collect in payroll taxes. In 30 years, Clinton said, the depleted Social Security bank account will be able to provide only 75 percent of the current benefits.

"One of the reasons we want to move now is that by making relatively modest changes now, we can extend the life of the Social Security trust way out beyond 2029," he said.

Today's forum was the first of four regional sessions Clinton plans as a run-up to a White House summit in December and legislative action next year. About 750 people selected by the American Association of Retired Persons and the Concord Coalition attended the four-hour gathering.

The strong economy, which Clinton called "this sunlit moment," offers a "rare opportunity to prepare our nation for the challenges and opportunities of the 21st century – or in the words of the old saying, to fix the roof while the sun is shining."

The forum and recent polls illustrate how far public opinion has moved on an issue once considered to be political dynamite. In years past, proposals for reviving Social Security have focused on benefit levels, retirement age and cost-of-living increases. But as more Americans reap the benefits of a soaring stock market, the public debate has shifted to "privatization," a hybrid approach that would combine the current system with some personal retirement investing.

"The idea of privatization sounds very appealing to me," said Bettylu Donaldson, a 71-year-old Kansas City retiree who worries about the financial security of her children, grandchildren and great-grandchildren. "It seems like a way to increase your revenue."

Although Republicans have been in the vanguard of a privatization movement, even prominent liberals such as Sen. Daniel Patrick Moynihan (D-N.Y.) are now supporting the concept. White House aides and other economists, however, caution there are risks in private investing that could damage the safety net Social Security has always provided.

"My answer to the privatization question is a 35 percent stock market correction," said Robert Reischauer, a budget analyst at the Brookings Institution. "It's all more complicated than people want to admit."

Clinton's two-day Midwest swing, with a fund-raising dinner in Chicago tonight, was the president's first trip outside Washington since he returned from Africa. He and a large contingent of economic advisers clearly relished the opportunity to talk policy.

© Copyright 1998 The Washington Post Company

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