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About The daily Nebraskan. ([Lincoln, Neb.) 1901-current | View Entire Issue (April 8, 1998)
Kerrey’s plan would protect
private investments, tax cuts
PRESIDENT CLINTON listens to a question from the crowd during The Great
Social Security Debate in Kansas City, Mo. Members of the audience were
invited to ask questions of the president and other panel members during
the town hall meeting.
By Brian Carlson
KANSAS CITY, Mo. - Social
Security reform can not only fix the
endangered program, but can help
narrow the gap between rich and poor
in the United States, Democratic Sen.
Bob Kerrey said Tuesday.
And Kerrey said he and Sen.
Daniel Patrick Moynihan, D-N.Y.,
have the best plan.
In a presentation Tuesday morn
ing prior to The Great Social Security'
Debate, Kerrey said Social Security
can’t maintain the status quo.
“We currently have a promise on
the table we can’t keep,” he said.
“Social Security has got to be saved
... every single beneficiary, whether
1 year old or 81 years old, you need to
know the promise we have on the
table, we can keep.”
Working families currently bear a
disproportionate share of the funding
for Social Security, Kerrey said. For
70 percent of families nationwide,
the payroll tax is the highest tax.
With Social Security funding in
limbo in anticipation of the baby
boomers retiring, the United States
can provide greater retirement secu
ritw A marioom' / roliainnrr fV\air
payroll tax burden and helping them
create wealth, he said.
The senators' plan calls for a 2 per
cent reduction of the payroll tax, total
ing S800 billion. Currently, payroll tax
receipts exceed payments, and the sur
plus is placed in a trust fund. The
Kerrey-Moymhan bill would return
Social Security to a pay-as-you-go
program in which receipts would be
about equal to disbursements.
Kerrey said building wealth is
essential for improving retirees' liv
ing standards. The proposed bill
would provide a monthly benefit
check and a tax cut for building
wealth. Citizens would be able to use
the tax cut for personal investments.
The bill would create a SI,000
retirement account at birth, followed by
S500 each of the following five years.
Through compounded interest, Kerrey
said, citizens will have a base of wealth
to draw upon in retirement.
Kerrey admitted his plan is
“unquestionably going to have a neg
ative impact on some current benefi
ciaries.” But he called on seniors to
help do what is best for their chil
dren's and grandchildren's future.
“This is a tremendous opportuni
ty for individuals at the lower end of
the economic spectrum to acquire
something that today they have no
hope of saving.”
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Hedrick Smith provides an insightful look at the current
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Clinton: Time is now
to fix Social Security
CLINTON from page 1
more likely to see a UFO than to
ever draw a Social Security check.
Crossing the lines
That doesn’t have to be the case,
he said, if citizens and politicians
can pool their efforts for reform.
“Clearly, we will strengthen
Social Security and reform it only if
we reach across lines of party, phi
losophy and generation,” he said.
Although the president said he is
waiting to form his own policy rec
ommendations until after hearing
citizen input throughout the year, he
outlined five points which must be
included in reform measures.
Clinton said reforms must:
■ Strengthen and protect Social
Security for the 21st century.
■ Maintain universality and
■ Provide guaranteed benefits.
■ Provide financial security for
disabled and low-income beneficia
■ Maintain fiscal discipline.
A secure Social Security
Clinton's opening remarks pre
ceded a handful of U.S. senators and
congressmen, including Democratic
Sen. Bob Kerrey.Kerrey said Social
Security transfers payments to citi
zens when they retire but doesn't
allow them to accumulate wealth.
He and Sen. Daniel Patrick
Moynihan, D-N.Y., have proposed a
partial privatization of retirement
Rep. Kenny Hulshof, R-Mo.,
said Social Security represents one
leg of a three-legged retirement
stool also including pensions and
savings. Reform must address all
three, he said, and ensure that citi
zens who save are rewarded, not
“It is time for Washington to put
your money where their mouth is,”
Rep. Earl Pomeroy, D-N.D., met
audience approval when he admon
ished lawmakers to “never take the
security out of Social Security.”
He agreed with Clinton that fed
eral budget surpluses must be used
to fix Social Security before fund
ing other spending and said reform
should proceed holistically, not by
The people are heard
In the afternoon, Clinton, the
congressmen and a panel of Social
Security experts participated in a
town hall meeting in which they
fielded questions from the audience.
One questioner asked panelists
if they would favor at least partial
privatization of Social Security
Clinton said he believed privati
zation plans consistent with his
reform criteria could be crafted. He
would not, however, favor “token
privatization” in which results
would be questionable, he said.
Another audience member
asked Clinton why he had not taken
a strong stand against federal bor
rowing of Social Security trust
funds for federal spending.
Clinton said he supported this
use of trust funds. U.S. Treasury
securities have the backing of the
federal government and are the
safest investment that can be made,
And, he said, expected federal
budget surpluses will allow the gov
ernment to fund Social Security
without borrowing more money,
which would raise interest rates and
hurt the economy.
Federal budget surpluses also
will allow pending reform proposals
to be achieved without an increase
in the payroll tax, which would only
increase the chances workers won’t
receive in Social Security benefits
what they paid into the system
throughout the years.
John Gasper, 68, of Wichita,
K.an., told the Daily Nebraskan he
thought the debate was informative.
He believed some retirement money
could be diverted into private invest
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at or near retirement.
“In fact, I think very little will be
done either way as far as current
beneficiaries,” he said.
Gasper said he was more con
cerned about the availability of
Social Security for his children and
Krista Yenter, a junior at the
University of Central Oklahoma in
Edmond, Okla., attended the event
with her^school's Students in Free
“A lot of people don’t realize
how important Social Security is,”
she said. “I think this was a good
starting point for young people. But
there is a long ways to go before we
have better representation for my
Clinton has scheduled a White
House conference on Social
Security for December and plans to
push for reforms beginning in
January. Both dates are after the
November midterm elections.
Other commissions, including
one in iyyn leu uy iveuey, nave
studied Social Security, and some
have questioned whether the United
States needs to study the program
for another year before putting ideas
As he strolled along the rope line
after Tuesday’s event, Clinton was
asked by the Daily Nebraskan if
strong Social Security reform was
being delayed to avoid political fall
out in the elections.
“No, we aren’t putting if off until
after the elections,” Clinton said.
“Actually, the politicians involved in
this are taking a risk by being out
spoken on these issues.”
Other commissions that have
studied Social Security didn’t draw
from as broad a population base,
Clinton said. His 1998 effort seeks
to inform citizens about how Social
Security works so they can con
tribute to reform that works, he said.
“Every year that goes by, more
dramatic changes have to be made,”
he said. “We want to build a base on
which Democrats and Republicans
can come together and build a base
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