Gore retirement savings plan draws fire from Bush
Washington - Vice President Al Gore is expected Tuesday to unveil a
retirement savings plan that already has drawn heavy criticism from his
chief rival in the 2000 presidential campaign, Texas Gov. George W. Bush.
The Gore campaign leaked details of the plan -- which on the surface mirrors Bush's own proposal to offer private Social Security accounts -- over the weekend. The vice president is expected to formally announce the plan, dubbed "Retirement Savings Plus," during a campaign event Tuesday in Kentucky.
Similar to private companies' 401(k) plans, the Gore proposal would allow workers to establish personal retirement accounts of up to $2,000 a year -- partially funded by tax credits -- to be invested in the stock market and managed by private firms.
However, unlike the Bush plan, Gore's proposal does not use Social Security funds and is intended to complement the federal retirement program, Gore aides said.
"This is not Social Security. This is an addition to Social Security," said Sarah Bianchi, a Gore policy adviser.
"The vice president's long-standing position is that Social Security is a benefit that should be secure and guaranteed and available and that beyond Social Security there should be other ways for families to build a nest egg for retirement," she said.
It builds upon an earlier, less comprehensive Clinton Administration
proposal for universal savings accounts, in which the federal government
would have started low-income workers with a $400 grant and matched contributions
in government-controlled accounts.
$200 billion plan
The vice president's plan would be open to families earning up to $100,000 a year. Couples with incomes of $30,000 or less would be able to invest $500 a year in the account and the government would provide a $1,500 tax credit. |
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| Vice President Al Gore | |
For those earning between $30,000 and $60,000 annually, the government would provide $1,000 a year. For couples with incomes up to $100,000, the private contribution would be $1,500 and the government's share would be $500. Qualifying income brackets would be cut in half for individuals.
Gore aides said if an individual fully participated for 35 years, benefits could reach around $200,000, depending on how it was invested and market performance.
Money could be withdrawn earlier and without penalty only to pay for a child's college education, a first home, or catastrophic medical bills.
Aides said the plan would cost the government about $200 billion over
10 years -- money they say would be available because of higher budget
surpluses.
Bush: Gore plan driven by polls
News of the proposal drew immediate charges of hypocrisy from the Bush camp, which said Gore's plan mirrors their candidate's proposal allowing individuals to take some of the payroll taxes that currently finance the Social Security retirement fund and invest that money in the market.After Bush announced his proposal, Gore repeatedly denounced it as "risky," arguing that Social Security should not be subject to the fluctuations of a volatile stock market.
“First the stock market was roulette and risky and the now the heat is on,” Bush said during a campaign appearance in Vancouver, Washington on Monday. He (Gore) changes positions. But what America wants is somebody who is going to stay steady when it comes to public policy, and that is the kind of leadership I’ll provide.”
The Gore campaign said Monday that such criticism highlights“ Bush’s misunderstanding of the Social Security issue.”
"What I criticized was investing Social Security trust fund money in the stock market which I think is a huge mistake,” Gore said. “ I have always encouraged individuals to invest in the stock market and to save. The difference is this: I protect Social Security.
Bush dismissed Gore's program as a gimmick, continuing a recent line of attack on the vice president. "It shows he's a man chasing polls and focus groups," said Bush before the Vancouver event.
Gore's advisers insist his plan would not require any reduction in current Social Security benefits, and they claim Bush's proposal would reduce the money available to pay today's retirees.
"Al Gore will use our historic budget surplus to save Social Security and provide people with an additional savings account," said Gore spokesman Chris Lehane. "In sharp contrast, George W. Bush would blow out the budget surplus on a tax cut for the wealthy ... and drain money from the Social Security trust fund for his risky and irresponsible privatization."
The Social Security program, which provides a retirement safety net for many Americans, is scheduled to start running into deficits within the next 15 years as baby boomers start retiring.
The Bush plan calls for "lock box" payroll taxes intended to prohibit borrowing against the Social Security trust fund; a pledge not to increase the current 12.4 percent payroll tax used to keep the trust fund solvent; and maintaining current provisions to pay benefits to widows, widowers and the disabled.
The vice president has called for extending the Social Security solvency until at least 2050 by continuing to balance the budget, paying down the national debt, and using the interest saved from debt reduction to shore up the program.
Gore -- who trails Bush in most major public opinion polls -- is set to embark on the second week of his "progress and prosperity" tour, intended to draw a link for voters between the nation's unprecedented economic prosperity and the Clinton Administration's domestic policies.
Last week, Gore announced a $500 billion tax cut package targeted at low- and middle- income Americans. Bush officials also denounced that policy as product of polls and focus-group research instead of convictions.
Campaign aides briefed reporters on Sunday, two days before Gore resumes the tour with a visit to Lexington, Kentucky. The vice president is also scheduled to host a forum in Des Moines, Iowa, on Wednesday and will compare his retirement proposals to Bush's.
