The politics of the joy of retirement


WASHINGTON -- The politics of the current debate over retirement plans is complex and tricky. But the maneuvering can be potentially significant if the Social Security issue finally emerges as the dominant one in this presidential campaign.

On the face of it, Vice President Al Gore seems to have placed himself at a pronounced disadvantage by appearing to be guilty of playing me-too politics once again. He has offered his proposal for individual retirement accounts after deriding as too "risky" the plan advanced the other day by his Republican rival, Gov. George W. Bush, for a different kind of accounts to accomplish the same purpose.

Mr. Bush and his advisers are crowing about how the vice president is once again changing his mind and following the lead of the Texas governor. He did the same thing, they say, in proposing his own plan for tax reduction after denouncing Mr. Bush's plan as dangerously excessive. The picture they paint, accurately, is one of the Republican nominee-presumptive setting the agenda for the campaign.

Mr. Gore counters, accurately, that the ideas advanced by the competing campaigns are quite different. He has proposed that the government make matching payments, at ratios up to 3 to 1, into retirement funds established by workers of low or moderate income. These funds would supplement the existing Social Security structure, just as the 401(k) plans offered by many employers do.

By contrast, Mr. Bush would allow workers to divert some of the taxes they otherwise would pay for Social Security into stocks or other investments that might pay a higher return. It is this feature that Mr. Gore originally attacked as "risky" because of the dangers of stocks losing their value and thus reducing the nest eggs of retiring workers.

Both candidates are vulnerable one way or another, however.

Mr. Gore's proposal, as the Bush campaign has been quick to note, gives lower income workers more of the surpluses now forecast but nothing to deal with the structural problems of the Social Security system to assure its health for the indefinite future. It also might be pointed out that Mr. Gore's plan is very similar to one advanced by President Clinton two years ago and quickly smothered in its crib by Congress.

Mr. Bush, however, faces a potentially more serious backlash.

His proposal would require some reduction -- he has not yet spelled out how much -- in monthly Social Security checks. The theory is that the money diverted to stocks would more than compensate for that loss of benefits because the market consistently rises faster than the cost of living. And, in any case, the reduced benefit levels would apply only to future generations of taxpayers who elect the option of private investments, not to anyone retired today or near retirement age.

All that sounds reasonable, of course. But it is not difficult to visualize Al Gore in a debate accusing George Bush of trying to pay for tax cuts for fat cats by slashing the income of the helpless old folks. The vice president is already trying out some class warfare lines, noting that the income limits on his matching funds mean the beneficiary wouldn't be the taxpayer drinking a Scotch at his club and gazing out over the golf course.

None of this matters a great deal at this stage of the campaign. The opinion polls show that few voters are following the candidates closely enough to make distinctions between them that make any sense.

One recent survey found that one-third to one-half of the voters weren't sure of the positions of the two candidates on issues as prominent as abortion rights and gun control. So it is fair to guess that relatively few are sorting out the differences between them on the Social Security question. This encourages sloganeering such as Mr. Gore's boast that, "My plan is Social Security plus, not Social Security minus."

The issue does have the potential to be highly influential in the campaign. Retirement is just over the horizon for the baby boomers in their 50s. And workers in the next generation are the ones most concerned about whether the system will be there with adequate funding when they reach retirement.

So far, both Al Gore and George Bush have been using the issue for political positioning. Before the campaign is over, however, they may be obliged to provide satisfactory answers on the substance.

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

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