Clinton: ‘We must save Social Security for the 21st Century’

By CHERYL FRANKENFIELD
Collegian Staff Writer

President Clinton placed Social Security first on his list of proposals for America during the State of the Union address last night.

"First and above all, we must save Social Security for the 21st century," Clinton said, adding that by the year 2032, Social Security trust funds will be exhausted.

"I propose … that we invest the surplus to save Social Security. These changes … must be made on a bi-partisanship basis," Clinton said.

About 60 percent of the budget surplus, more than $4 trillion, will keep Social Security sound for the next 55 years.

Clinton proposed the budget surplus go toward Social Security, Medicare and educational programs.

But the decision to either cut taxes or add surplus budget funds to Social Security is not simple, Barry Ickes, associate professor of economics, said. Other fiscal policy decisions have an effect on either choice.

"You need some basic system to cope with the way life turns out," Ickes said abouretirement investments.

Clinton called for 11 percent of the budget surplus to go toward the creation of Universal Savings Accounts. Americans will be able to invest a portion of their trust fund and the government will contribute additional funds for these individual investments.

Economic Security 2000, which describes itself as the nation's first non-partisan educational organization dedicated to saving and reforming Social Security, wants to promote the long-term solvency of Social Security, said Joe Sanders, regional field director.

Sanders said individual investment accounts are beneficial because they provide better returns for retirement funds. Currently, the returns of money invested in individual accounts are about 3 to 4 percent and at most 7 percent, he said.

If an individual has an account, a small portion of the Federal Insurance Contribution Act tax would be invested in it, Sanders said. Without an individual account, the government receives 12.4 percent of earned money, rather than having a portion of it go into the individual account.

Having a chance to see the statistics on individually invested accounts is an added benefit, Sanders said. Also, in the case that a person dies, money paid into the system would be given to family members, he said.

"That's a nice little nest-egg," Sanders said. "(Individual accounts) give people the chance to watch (funds) grow."

With regards to individual and collective responsibility for retirement funds, Ickes said there is a dilemma.

People can save for retirement in private accounts and do well or poorly. If someone has bad luck with investments, the collective public will not want that person to starve, Ickes said.

Everyone has a responsibility to plan for his own retirement, but options are always beneficial for decision-making, Barbara Lindenbaum, director of the Centre Region Senior Citizen's Center, said about the individual accounts.

Clinton said the improvement of Medicare, long-term care and education were also important issues for America to focus on for a better 21st century.

"The state of our union is strong," Clinton said. "Let us bring excellence to every part of America."