(U-WIRE) WASHINGTON – A Florida congressman introduced a new twist on the Bush administration’s plan to privatize Social Security earlier this month, sending analysts scrambling to measure its impact in Congress and leaving many students struggling to understand the effects the complex issue will have on their lives.
Rep. Clay Shaw, R-Fla., unveiled the “Guarantee Plus Plan” Feb. 10, which he said would allow taxpayers to invest their Social Security savings in self-selected market funds.
The plan, Shaw said, would create surpluses in the program without raising taxes or changing the retirement age.
“For the first time, a nation of savers, not the government, will own and control the assets backing Social Security,” he said in a statement.
Shaw’s office could not be reached to comment on the proposal, but the congressman publicly admitted that the proposal has its share of skeptics. Many Republicans worry about the risks of allowing unregulated investment of Social Security funds. So far, no Democratic congressman has stepped forward to back Shaw’s plan.
“I think there’s an enormous risk,” said Susan Sullam, press secretary for Rep. Benjamin Cardin, a Democrat who sits with Shaw on the House Social Security Subcommittee. “The average American would have great difficulty receiving from private investment what the president has been promising as a return.”
The lack of consensus on Social Security has led legislators on all sides of the issue to push their agendas through hard, sometimes unconventional means.
According to The Hill magazine, automated callers from an unidentified source phoned seniors in at least a dozen contested congressional districts across the country last month to tell them that their representative favors “privatizing Social Security.”
But to many students for whom retirement is barely a dot on the horizon, the debate over Social Security can seem like a distant concern.
“I think most people our age think about Social Security in the short term,” said David Kushner, a sophomore majoring in communications at George Washington University. “We assume the decisions we’re arguing about now will be turned around later before they can affect us.”
But realizing they are part of the first generation that Social Security privatization would substantially effect, many students have some opinion formed on the issue.
Brett Hollenbeck, a junior majoring in economics, did not hesitate to voice his support of privatizing Social Security.
“The rate of return to be had in market investments is significantly higher than what social security offers,” he said. “That’s the whole point of a pension program, to provide a guaranteed retirement with the highest possible returns.”
Hollenbeck expressed reservations about the deficit spending he said would be necessary to enact Shaw’s proposal. Still, he was enthusiastic about the plan.
“I like its voluntary nature, and I definitely agree that workers should have more control over their pensions,” he said. “The Bush plan would have government-administered choices.”
To invest Social Security is to take a gamble with one’s own retirement fund, Hollenbeck said, but investment offers a substantial potential for return and the decision of whether or not to take the risk should be left to individual taxpayers.
“While [Shaw’s plan] is more risky, you avoid the costs that this bureaucracy would create and you avoid a situation that might encourage corruption,” he said. “I don’t mind risk because it’s voluntary and up to the individual to take that risk.”
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