The Salina Journal from Salina, Kansas on October 10, 1996 · Page 13
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The Salina Journal from Salina, Kansas · Page 13

Salina, Kansas
Issue Date:
Thursday, October 10, 1996
Page 13
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fl8 THURSDAY. OCTOBER 10, 1996 > SOCIAL SECURITY WASHINGTON THE SALINA JOURNAL Social Security debate escapes politics, so far Clinton, Dole haven't taken sides on reform, which some call good By MARTIN CRUTSINGER The Associated Press WASHINGTON — Whenever Social Security comes up, President Clinton and Bob Dole gingerly promise not to touch it. But away from the campaign, armies of researchers are amassing arguments to make sure the next president does take action to keep the system solvent. The most radical reforms would have Social Security "touched" in a big way — by privatizing at least part of the $400 billion collected each year. Instead of putting the money from workers and employers' payroll taxes into government bonds — the only option now — some money would be invested in the stock market, where it could earn a higher return but also face greater risks. A government advisory council, working out of the spotlight for two years, will produce its report soon after the election. The 13 members could not agree on a single remedy but instead will put forward three rival plans — all relying to some extent on privatization. What Clinton, Dole think Meanwhile, Clinton and Republican challenger Dole have endorsed the idea of appointing a blue-ribbon commission along the lines of a 1983 panel that dealt with an earlier crisis in the government's biggest benefit program. Clinton's and Dole's views on possible changes are pretty much a mystery, given their terse comments during the campaign. The subject did not come up, for example, in Sunday's debate. One possible hint: Carolyn Weaver, a longtime Dole adviser on Social Security who also serves on the advisory council, supports the most far-reaching privatization plan to divert $1.6 trillion of Social Security contributions into stocks. Individuals, not the government, would decide how to invest the money. Dole and Clinton signaled an openness to considering privatization in recent interviews with the American Association of Retired Persons. But both also expressed certain reservations. Dole asked, "Do you want the U.S. government owning corporations or parts of corporations?" Clinton and Dole also both expressed a willingness to look at raising the retirement age further. It is scheduled to rise from 65 to 66 in 2010 and to 67 in 2025. Advisory council plans Of the three plans that will be advanced by the advisory council, one would have the government invest $800 billion of Social Security money in stocks over a 15- year period. The other two plans would allow workers to make the investments themselves. "Even the most conservative plan being put forward by the advisory panel calls for steps that would be considered fairly dramatic just a few years ago," said Michael Tanner of the Cato Institute, a group pushing for privatization. A recent poll by the Employee Benefit Research Institute indicated that 65 percent of respondents T DEATH STATISTICS Accidental deaths up for 3rd year By The Associated Press WASHINGTON — Deadly accidents increased last year for the third straight year, led by the first rise in drunken driving deaths in a decade, a private safety group said Wednesday. Overall, accidental deaths including car crashes, poisonings, falls, drownings and fires increased to 93,300 in 1995, the National Safety Council said. That's up 2 percent from 91,400 in 1994. The 4 percent rise in alcohol-related traffic deaths, to 17,274 in 1995, was first reported in July by the government. The private safety group said motor-vehicle accidents accounted for nearly half of all accidental deaths in 1995 — 43,900 — up 3 percent from 1994. About 41 percent of all fatal car accidents are alcohol- related — while just 6 percent of all accidents, fatal and nonfatal, are alcohol-related. Also adding to the rise in accidental deaths was a surge in drug overdoses and other unintentional fatal poisonings, the council said. Poisoning by solids and liquids caused 10,000 deaths in 1995, up 11 percent from 1994. For the first time, poisonings caused more deaths in the home than did accidental falls. favored putting some Social Security money into stocks. Fifty-nine percent said they wanted to pick the stocks themselves. One reason is the growing fear among younger workers that Social Security, the Depression-era program to combat widespread poverty among the elderly, won't be around when they retire. Running out of money There is a basis for that fear. This year, the amount of money the government collects for Social Security will exceed, by $60 billion, the amount it must pay in benefits. But starting in 2012, as the baby boomers retire, the fund will pay out far more than it takes in each year, leaving it broke by the year 2029. At that point, payroll taxes will cover only 76 percent of promised benefits. The advisory committee, looking at those depressing figures, sought ways to fix the problem. One idea, supported by longtime Social Security champion Robert Ball, would divert 40 percent of Social Security tax collections from the years 2000-2015 into stocks. That would be an estimated $800 billion, after adjusting for inflation. Because the stock market has historically provided higher returns than bonds, supporters ar- gue that would end the trust fund's cash crunch. But there are many skeptics. Some worry about undue influence if the government controlled roughly 10 percent of the nation's stock shares. Others call the earnings projections too optimistic. Finance experts skeptical "The idea that we can privatize our way out of this problem is not realistic," said Peter Peterson, former Nixon commerce secretary and the author of a book called, "Will America Grow Up Before It Grows Old." Any long-term fix requires some combination of higher taxes and lower benefits, Peterson argues. He suggests raising the retirement age, reducing benefits for the well-off and taxing all Social Security benefits like other pension income. The lack of presidential debate this year on the topic could turn out to be a blessing, said Edward Gramlich, the panel chairman and a University of Michigan economics professor. Gramlich backs a compromise plan between the Balland Weaver-supported solutions. "There is a risk," he said, "that if these plans are discussed in the heat of a presidential campaign some good ideas might get tainted and not taken seriously after the election." 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