Moynihan seeks Social Security overhaul Changes would include diversion of some taxes to personal accounts

March 15, 1998|By NEW YORK TIMES NEWS SERVICE

WASHINGTON -- Sen. Daniel Patrick Moynihan moved yesterday to reshape the national debate on Social Security by offering a comprehensive proposal to cut payroll taxes, reduce the annual cost-of-living adjustment and encourage workers to establish personal savings accounts for retirement.

Moynihan, a New York Democrat who is respected by members of both parties as an expert on social policy, said it is imperative that defenders of Social Security propose changes in the program, rather than just resist the proposals of conservatives hTC who want to turn it into a vehicle for investing in stocks and bonds.

Under a bill to be introduced in the coming week, Moynihan would allow workers to divert about 15 percent of payroll taxes into personal savings accounts.

"With this investment provision," Moynihan said, "workers can build up estates. The fellow who worked at Bethlehem Steel for 40 years would not just have a pension, an annuity, but could leave substantial amounts of money to his children. That's kind of a new America. It responds to the energy that the 'privatizers' have had, without losing your basic annuity."

Moynihan described his proposals in interviews over the weekend and in the text of a speech prepared for delivery at Harvard University tomorrow. The proposals are likely to be a catalyst for the yearlong national debate on Social Security that President Clinton is trying to stimulate. For more than a year, Republicans in Congress have joined with Wall Street executives in suggesting that Social Security taxes be invested in the stock market, possibly through personal accounts.

Moynihan is the ranking Democrat on the Finance Committee, which writes Social Security legislation. He was a member of the bipartisan commission that devised a plan to keep Social Security from going bankrupt in 1983.

"It's said that you can't touch Social Security because it's the third rail of politics," Moynihan said."If you make any change in it, you die. So what is the alternative? You don't die, but let the Social Security system die."

Pub Date: 3/15/98

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