WASHINGTON — Two senior senators vowed Saturday to push for a plan that would let working Americans set aside some of the money they are now required to pay into Social Security to set up private retirement accounts.
In return, those in the program would agree to lesser benefits when it comes time to start drawing their own Social Security.
Sens. Bob Kerrey (D-Neb.) and Alan K. Simpson (R-Wyo.) emphasized during an appearance on the CNN's "Newsmaker Saturday" that the plan would be strictly voluntary and would not affect the benefits of anyone now drawing Social Security or those age 50 or older who will begin drawing in the next 15 years.
"But for beneficiaries who will be eligible 20 years from now, we have promises we can't keep," Kerrey said.
The proposal would be part of a package of eight or 10 measures designed to head off long-term Social Security insolvency. The two senators said they will try to build support for the package in the Senate later in the year.
The package is patterned on recommendations considered--but not adopted--by a bipartisan entitlements commission appointed by President Clinton and headed by Kerrey. Simpson was a member.
Kerrey said that in its final form, the package would include increasing the retirement age and making other unspecified adjustments in Social Security benefits, perhaps adjustments in automatic cost-of-living increases.
But he said the plan's centerpiece would give American workers the opportunity to voluntarily "take 2% of their wages that normally go to Washington and set it up in a private individual retirement account."
"Their Social Security would be reduced by that amount, but it would earn a much higher rate of return and they would own it," Kerrey said.
"It would be an asset, it would be a savings program," he said, predicting that Americans would save $60 billion a year.
Simpson added: "It would be a private IRA. . . . It would be great for the entire economy of the United States."
Kerrey, chairman of the Democratic Senatorial Campaign Committee, headed last year's bipartisan presidential commission which examined entitlement programs in the federal budget. Simpson is chairman of the Social Security subcommittee of the Senate Finance Committee.
Both Kerrey and Simpson expressed guarded optimism that, based on private talks with colleagues, there is a chance for considerable bipartisan support for the plan.