Cato Institute hails Lieberman

[Seth Ackerman]

> August 7, 2000
> 
> Cato Institute News Memo:
> 
> Cato Social Security Expert Hails Gore Choice of Pro-Privatization Running
> Mate
> 
> Michael Tanner, director of the Cato Institute's Project on Social
> Security
> Privatization, hailed reports that Vice President Gore will select as his
> running mate a supporter of Social Security reform through personal
> retirement accounts. Sen. Joseph Lieberman (D-Conn.), who press reports
> say
> will be formally invited to join the ticket today, declared in 1998 that
> "individual control of part of the retirement/Social Security funds has to
> happen."
> 
> In addition, Lieberman is currently chairman of the centrist Democratic
> Leadership Council, which declared last summer that "we must . . .
> gradually
> convert Social Security from a transfer program to a new system of
> individual private savings supplemented by modest public pensions for the
> needy."
> 
> The question now, according to Tanner, is whether Vice President Gore will
> reconcile his uncompromising opposition to George W. Bush's proposal for
> allowing workers to privately invest a portion of their Social Security
> payroll taxes.
> 
> "It will be more difficult for Gore to denounce Social Security
> privatization as a 'risky scheme' when his own running mate supports the
> idea," Tanner said.
> 
> Tanner also pointed out that Lieberman's position showed just how
> mainstream
> the idea of Social security privatization has become. "Support for
> individually owned, privately invested accounts cuts across party and
> ideological lines," Tanner said. "This is an idea whose time has truly
> arrived."
> 
> Following are excerpts from a May 4, 1998 interview with Copley News
> Service
> in which Lieberman supports the "New Democrat" position on Social Security
> and personal investment.
> 
> Social Security: Where do we go from here?
> 
> Copley: The Social Security trust funds, whatever there are, are invested
> in
> the lowest possible yielding security that exists, Treasury securities.
> Any
> manager of a corporate pension plan, or a state employee pension plan,
> would
> be fired if he invested all their assets in Treasury securities. Is there
> any support for broadening the portfolio?
> 
> Sen. Liebermann: I would support that for the reasons you state. There is
> some risk obviously, but each of us has made a judgment about this in our
> own lives. We now have decades-long history of an average 10 percent
> return
> on stocks. Clearly there are ups and downs. So, yes, I would support it. I
> haven't seen any counting of my colleagues on that.
> 
> Something like 40 percent of the American people have investments in
> mutual
> funds. More than half are in some kind of stocks. So it doesn't make sense
> anymore not to do that with this enormous investment pool that we're
> supposed to have for Social Security. Same is true of this idea of
> privatizing. This is where I think if we can manage the transition, we
> have
> a chance to not only do something right, but to give people more
> confidence
> about what their retirement years will be like.
> 
> Of course, it also dramatically increases our savings rate, which has to
> be
> good for our economy overall. Not everybody supports this. We're going to
> see again a kind of old Democratic Party/new Democratic Party kind of
> split
> on this. I think in the end that individual control of part of the
> retirement/Social Security funds has to happen.
> 
> 
> The Cato Institute is a nonpartisan public policy research foundation
> dedicated to broadening policy debate consistent with the traditional
> American principles of individual liberty, limited government, free
> markets,
> and peace.
> 
> 
>