HOW THEY SEE IT \ Social Security It's a matter of ensuring a reasonable return

ARLINGTON, Va. -- For the sake of our children and grandchildren, let's hope President Bush has more success reforming Social Security -- which he has identified as his No. 1 domestic priority -- than President Clinton had with health-care reform.
Fortunately, Bush is savvy enough to realize that he doesn't have to start from scratch, as the manager of the Clinton health-care effort -- better-known today as Sen. Hillary Rodham Clinton -- opted to do.
Instead, the Bush White House has acknowledged and embraced the considerable academic research and real-world experience that has preceded its reform push.
Let's be frank: The demographic changes that threaten Social Security with bankruptcy did not come out of nowhere. We have known about the problem -- seniors living longer, with too-few "juniors" replacing them in the workforce to support the pay-as-you-go financing system -- for a very long time.
The 60 Plus Association recognized years ago that the system designed in the Great Depression is a burden, not a blessing, on younger workers.
The 60 Plus Association, I am proud to say, became the first organization representing senior citizens to endorse personal retirement accounts. And that was a full decade ago.
Other examples
We know what needs to be done. Indeed, many other countries -- beginning with Chile in 1981 -- already have done it. Chile's pension system is relatively easy to understand: In short, every salaried worker is required to put a percentage of each paycheck into a personal retirement account that will finance his or her retirement.
As the Associated Press noted in a recent feature: The funds have delivered an average annual rate of return of 10.3 percent above the rate of inflation. It's clearly the wave of the future as dozens of other countries have followed Chile's lead, including Great Britain, Mexico and even Sweden.
There are basically only three ways to "fix" the Social Security system.
UReduce benefits: Reduce benefits openly or reduce them stealthily by increasing the age at which workers are eligible to receive full benefits.
UIncrease FICA taxes. Increase Social Security taxes by upping the tax rate or increasing the amount of wages subject to the tax. Talk about being unfair! (Haven't we learned yet that tax increases are a drag on the economy?)
UModernize the system. Creating a personal retirement account option within Social Security would give U.S. workers an opportunity (as workers elsewhere now have) to invest some of their Social Security taxes with professional managers who have a fiduciary responsibility to get the best return possible.
At present, the typical under-35 American worker, studies show, can expect his Social Security taxes to earn approximately nothing during his working career. If he could use some of those taxes to purchase a conservative mix of stocks and bonds, or an insurance annuity, he could do better.
In 1935 President Franklin Roosevelt created the Social Security system, which helped seniors escape poverty, but we now know, because of lower birth rates and the elderly living longer, there are major problems.
What better memorial to Roosevelt than to adopt a tried-and-true new system for a new generation of retirees.
X James L. Martin is president of the 60 Plus Association, a conservative senior citizens' advocacy organization in Arlington, Va. Distributed by Knight Ridder/Tribune Information Services.

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