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Democrats grab an issue -- Social Security
By Tom Scheck
Minnesota Public Radio
October 2, 2002

DFL and Republican candidates running Minnesota's 6th and 2nd congressional districts are attacking each other over the issue of Social Security. Bill Luther and Janet Robert, both DFLers, say their Republican opponents want to privatize Social Security and allow younger workers to invest in the stock market. Republicans John Kline and Mark Kennedy say their DFL opponents are misleading voters on the issue. They say their proposals will stabilize the system.

Liz Olsen says she doesn't support any changes to Social Security.
(MPR Photo/Mark Zdechlik)

Two years ago, many politicians, most notably President Bush, started talking about allowing workers to invest a portion of their payroll taxes in personal accounts. At the time, the stock market was soaring. Now that the market has dropped, Democrats are making it a theme in this year's election.

The Minnesota DFL Party is running radio ads (Listen) on behalf of DFL Congressman Bill Luther.

Party officials and Luther are attacking Republican John Kline because he supports a plan that would allow younger workers invest a portion of their payroll taxes in the stock market.

Luther says Kline's proposal would take money out of the Social Security surplus and hurt future retirees. He told a group of seniors at a Burnsville nursing home that current Social Security recipients would suffer if such a plan was adopted.

"I do not support the idea of taking money out of the Social Security system similar to the proposal of Mr. Kline. I believe that's wrong to try to fix Social Security by trying to take money out of the system because I believe that will reduce benefits or increase taxes and this is not I think the time to be gambling Social Security dollars on Wall Street," Luther said.

"Privatization is a word that has been used and taken and twisted to scare seniors," counters Kline. He and many other Republicans object to the term "privatization" even though he never objected to it in his last two campaigns for Congress. He's called on Luther and the DFL to pull the ads because they aren't true. The ads are still running, and they may be working on their intended target -- senior citizens.

Marie Kreider says she wouldn't mind allowing younger workers invest a portion of their payroll taxes in stocks or bonds.
(MPR Photo/Mark Zdechlik)

"I don't believe they should talk about privatization at all of Social Security because that wasn't what Social Security was meant to be," says Dean Haut, one of many seniors at the Woodbury Villa senior complex who say Social Security is an important issue this year.

Many of the seniors here -- Democrats, Republicans and split-ticket voters -- agree with Haut's sentiments. They argue that Social Security was meant as a safety net and shouldn't be changed at all.

Liz Olsen says she's not worried about her own benefits, but she says she worries that changes could harm future retirees. She says future investors could lose a portion of their Social Security money if they invest it in stocks or bonds.

"It should not be left to the individual to invest the proceeds. The government should handle it the way it has been handling it. How many people are competent enough to invest any of their money? Very few. I don't think I would be comfortable doing it," Olsen says.

Other seniors like Marie Kreider say they don't mind giving younger the workers the chance to get a higher investment return than the government.

"I think that would be pretty good to let it multiply instead of grabbing it all out at one time and start it low now and build it up and let it go. You get older up into the seventies and eighties and they got something that they can take out and use," she says.

Kline and other politicians who support changes to the current system say Congress needs to get the political muscle to fix the system. They argue the Social Security surplus is set to run out of money by 2041 if changes aren't made.

Kline says his proposal will not take money away from any seniors. "The proposals that I have always supported, regardless of the word used to describe them, are like the ones I was talking about today, where you allow younger workers the opportunity to invest a small portion of their Social Security taxes into accounts that they'll own. The accounts that they'll own is arguably a private account but that's a long way from privatizing Social Security because it's a voluntary program; others can choose to not do that."

Kline says he'll continue to support personal accounts until a better idea surfaces. He says Democrats don't have any good plans to keep the system solvent. Incumbent DFLer Bill Luther says he prefers a plan that would allow the government to invest a portion of the Social Security surplus in securities other than government bonds to make sure the program is solvent.

Second District Republican Congressman Mark Kennedy never objected two years ago when reporters or analysts said he favored privatizing Social Security. In an interview with MPR during the 2000 campaign, Kennedy was asked if he supported a semi-privatized Social Security system. He called Social Security his number one priority and said he favored a plan that lets younger workers invest part of their payrolls taxes in personal accounts.

"That includes making sure we keep Social Security trust off limits to the big spenders, it includes preserving the benefits for those that are at or near retirement, the disabled or survivors. But it also does include allowing younger workers the opportunity to voluntarily invest, and create wealth and grow their retirement assets," he said.

Kennedy now says he never supported "privatization."

"I've heard no one talk about privatizing Social Security other than Democrats," he says. I have seen no proposal that would do that. We'll always have a Social Security program that is run by the federal government, sponsored by the federal government ensuring that just as Social Security has done for generations that seniors will do for the future."

Kennedy has also signed a letter supporting the concept of allowing younger workers to invest part of their payroll taxes into personal accounts.

Kennedy says his DFL opponent, Janet Robert is scaring seniors by attacking his position. Robert said at a recent campaign event that Kennedy and other Republicans are trying to scare younger workers by telling them Social Security won't be there for them.

"There's so many workers out there who say 'What do I care? It's not going to be there for me anyway.' That's extremely upsetting. It means their marketing has gotten through to those people. We can fix Social Security and make sure it's there forever," she said.

Robert says she supports the idea of making the federal government pay back the money it borrows from the surplus at a higher interest rate which she says would make the system solvent. A spokesman for Robert says she would be against raising taxes and would prefer to see the government make some spending cuts to pay off the debt.

Larry Jacobs, a political science professor at the University of Minnesota, says Social Security is a key issue for Democrats and says it should be.

"The president and the Republican Party in Congress are on record saying they want to move forward with the structural change in the program that would open up options for individuals to invest a portion of their contributions in the stock market. Now that is the most significant change in the structural program in its seven-decade history," according to Jacobs.

Jacobs says he expects candidates to continue to focus on the issue since it's well known and critical to many seniors.

More from MPR
  • Audio: Bill Luther radio ad on Social Security