DALLAS (May 4, 2000) – The following letter was released today by John C. Goodman, president of the National Center for Policy Analysis, in response to inaccurate statements issued yesterday by the Gore campaign:
May 4, 2000
The Honorable Albert Gore
Vice President of the United States
2410 Charlotte Ave.
Nashville, TN 37203
Dear Mr. Vice President:
You inaccurately described my views on Social Security in yesterday's news release from your presidential campaign and on your web site Gore2000.org.
Neither I, nor any representative of the NCPA, have ever called for the abolition of Social Security. To the contrary, I have consistently proposed reforms that are necessary to save Social Security for the future.
Sincerely,
John C. Goodman
President,
National Center for Policy Analysis
NCPA Fact Sheet on Personal Social Security Retirement Accounts
Although Texas Gov. George W. Bush has not endorsed a specific Social Security reform proposal, based on the principles that Bush has outlined and plans now before Congress, such as those by Sens. Phil Gramm and Pete Domenici and by Reps. Bill Archer and Clay Shaw, a personal Social Security retirement account plan will include these elements:
No threat to the elderly. Those now drawing Social Security or nearing retirement age will not be affected.
Investment of a portion of the payroll tax. Most of an individual's Social Security payroll tax will continue to go to Social Security, but a portion – probably 2 to 2 1/2 percent – will be diverted into individual accounts that will be invested. These accounts will be funded from the surplus.
No risky investments. Individuals can choose among a number of private professional money management firms to invest the money in their accounts. The firms will be restricted to conservative stock and bond investments such as index funds.
No downside risk. The government will guarantee that future Social Security beneficiaries will receive no less than they would have under the current system.
Future benefits become more secure. The earnings generated by individual accounts will relieve government from part of the burden of funding Social Security benefits – a point that becomes more important as the population ages and the ratio of active workers paying taxes to retirees drawing benefits continues to diminish.
Advantage of funding individual accounts rather than paying off national debt. Both approaches put money in the private capital market. However, with a pay-off-the-debt approach, government will still have to collect high taxes in the future to pay Social Security benefits. With individual accounts and the income they generate, much of the money needed for benefits will already be available at the time of retirement without the need for higher taxes.