At issue is how to shore up the finances of the Social Security system, which will come under pressure as more than 70 million baby boomers -- the generation born between 1946 and 1964 -- enter retirement and receive their benefits.
A government report in March painted a gloomy picture of the program's future, estimating that its costs will surpass payroll tax revenue in 2017 -- forcing the system to rely on a trust fund that, the report said, will go broke in 2041.
After that, workers' payroll taxes would cover only a fraction of the benefits promised to retirees.
Most experts agree that fixing the system will require benefit reductions, tax increases, a rise in the retirement age, or some combination of the three. Obama, who opposes private accounts, has proposed raising taxes on people who earn more than $250,000 a year. Workers and their employers now split a 12.4% payroll tax on earnings up to $102,000. Obama's plan would lift that cap, creating what he calls a "doughnut hole" to protect people who make less than $250,000 from having their payroll taxes go up. Critics say Obama's plan alone would not cover the shortfall.
McCain's position has been somewhat fuzzy.
In 2005, he traveled with Bush to promote the administration's overhaul plan, including the controversial private accounts. In one appearance, he tried to mollify AARP, the powerful seniors' lobby that opposed such accounts, pleading for the group to "come to the table with us."
At the time, GOP strategists viewed the plan as a way to woo a savvy and growing "investor class" of voters, even if it cost the party some seniors' support.
But now his campaign website says McCain supports "supplementing" the current Social Security system with private accounts -- suggesting that he may not now support letting workers divert their taxes in a way that would reduce revenue for the system.
"It isn't very coherent right now, what he's saying," said Michael Tanner, a Social Security analyst at the libertarian Cato Institute and a leading proponent of private accounts.
McCain and his aides say the lack of specificity is intentional -- the result of lessons from 2005, when Bush tried to sell a skeptical public on private accounts.
"There's a really careful recognition of the history," said Douglas Holtz-Eakin, McCain's economic advisor.
"The history on Social Security has been if you put out specific proposals or preconditions, you polarize the debate and the deal doesn't get done."
Democrats said they intended to paint McCain as an enemy of Social Security.
Several strategists interviewed Sunday were vague about their plans, saying that the organization was still being put together.
Loveless, of the public workers' union, said his group would probably invest at least $2 million in the campaign and would focus its grass-roots mobilization efforts in Florida because of its large number of retirees.
Another labor-backed group, Americans United for Change, is planning a protest in the retiree hub of Las Vegas and may pay for recorded phone calls targeting senior voters in battleground states. The Democratic Congressional Campaign Committee plans to weigh in as well, having compiled target lists of incumbent Republicans who backed Bush's privatization plan.
Organizers said they would try to target McCain as much as possible, even staging a protest outside his vacation home in Sedona, Ariz.
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peter.wallsten@latimes.com
