Whitehouse Still Behind Individual Accounts

July 30, 2002

Despite falling stock prices and corporate accounting scandals, the Bush administration continues to support Social Security reform incorporating personal retirement accounts. According to White House correspondent Ari Fleischer, the President worries about the future of young Americans:

"The President is very worried about younger people, who are going to pay a lifetime of high taxes and, under current trends, not get back the money they paid in for Social Security. That's a negative rate of return, and the President wants to provide them with more options, if they decide that they want to exercise them, on a voluntary basis. He thinks that's something that younger people deserve to have the right to choose.

While reform will allow workers responsibility of their future, it will not change benefits for current or near retirees. Fleischer adds:

"The President is focused on doing what's right long-term, the right policies. And the President is very worried about the future of young people. People who are older than 50, for example, right now, there are going to be no changes under what the President proposed for Social Security. So what the President is talking about are no changes at all for people approaching the retirement age. They will continue to get Social Security. Social Security will be there for them."

Washington Post reporter Amy Goldstein observes, "The remarks about the retirement system, on a day when the stock market rose after nine weeks of historic declines, typify an administration that has prized consistency in its policy positions, rather than shifting with changed circumstances."

At some point the government will be forced to choose one of the three solutions. Mr. Fleischer comments:

"Well the reality is that there are three options available. One is to raise taxes, which was done before and hasn't worked. The second is to cut benefits, which is something the President doesn't support and the third is exactly the President's proposal. To allow younger workers to right on a voluntary basis to put a portion of their Social Security taxes in other investments, whether they're fixed-income investments, bond investments, equity investments, as younger workers see fit. This is for more choices for younger workers, and I think that's something that younger Americans are looking forward to, and they understand the value of a long-term investment."

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