With future of Social Security in question, old idea gains ground


WASHINGTON -- What a difference the passage of time and a little prosperity make. It seems like only yesterday that Sen. Barry Goldwater was suggesting that the Social Security system be made voluntary, thereby bringing upon himself the ridicule of Democrats and saddling his party with the reputation of wanting to kill the program.

A hands-off subject

As a result, the Republicans headed for the hills anytime there was even the slightest hint from one of their ilk that the old-age retirement program might stand some tinkering. Social Security, thanks in large part to Mr. Goldwater, became known as "the third rail of American politics," meaning that any politician who touched it would be burned to a crisp.

Now, in the wake of the Congressional Budget Office's latest projection that the federal budget will actually have a surplus for the first time in 30 years by the end of the current fiscal year, Sept. 30, House Republicans are lifting their heads out of their bunkers to propose steps that could make "Goldwater's folly" a reality, at least in part.

They want to use part of the surpluses projected for years to come to create individual retirement accounts for Social Security payees. The investment in new IRAs in the private sector would start out as a supplement to the federal program, but could become a lead-in to privatization.

The proposal is a counter to President Clinton's call in his State of the Union address that all future budget surpluses be untouched until he and Congress arrive at a solution to shore up the Social Security system against the prospective torrent of claims from maturing baby boomers early in the 21st century. Mr. Clinton scored a political 10-strike with older voters with that one, and the Republicans have been looking for an effective response ever since.

House Speaker Newt Gingrich, aware of the political appeal of the president's position, says "the No. 1 concern" of his party is making sure that the solvency of the Social Security system is preserved. BUt he says he favors a plan that would "allow us to begin the transition so that our children have the opportunity to have a personal retirement account that has an interest buildup."

Representative Porter's idea

A prime cheerleader for the idea is House Budget Chairman John R. Kasich, who between pipe dreams of the White House takes credit for being the resident budgetary thinker in his party. The idea actually was proposed 10 years ago by Republican Rep. John Edward Porter of Illinois, who has reintroduced it. His plan would as an option enable a worker to create a Social Security IRA with 80 percent of his Social Security taxes being transferred into it and the remaining 20 percent continuing to fund the Social Security Trust Fund.

Older Americans could elect to stay in the existing system, but as that pool of elderly died off, Mr. Porter's office says, his alternative would be so attractive to citizens that eventually the public retirement system could be dropped and replaced by a fully privatized system.

Mr. Porter is aware of the political hazards involved, and the flak that predictably would come from many Democrats. He likes to joke that the quickest way to clear a room of lawmakers is to yell "Social Security!" In the 1980s, when the Reagan administration began making noises about tinkering with Social Security, the FTC Democrats jumped on the notion and used it effectively in 1986 to regain the Senate, which had gone Republican with Mr. Reagan's election in 1980.

However, a bipartisan blue-ribbon commission did provide political cover for some changes in the system. The hope now is that the future peril to the system without further change is well-understood by both baby boomers concerned about their own retirement, and elders who don't want to see their children left without retirement security when they're gone.

Jack Germond and Jules Witcover write from The Sun's Washington bureau.

Pub Date: 3/06/98

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