Gore Urges Social Security Boost for Women

PHILADELPHIA —  Sharpening a debate likely to resonate through the general election, Vice President Al Gore proposed Tuesday to increase Social Security benefits for stay-at-home mothers and widows and escalated his attacks on rival George W. Bush’s plans for revamping the nation’s retirement system.

Speaking at a community center here, Gore proposed a significant benefit expansion he said was needed to make the system “fairer for American women.”

Gore’s plan, costing about $100 billion over the next decade, would allow mothers who stay home with small children to receive larger retirement benefits by crediting their Social Security account as if they had remained in the work force during those years. It would also increase payments to widows and widowers who can suffer precipitous benefit reductions when a spouse dies.

At the same time, Gore charged that Bush’s proposals to create private investment accounts within Social Security--and his call for an across-the-board tax cut--would fundamentally endanger the system. “If he got his hands on America’s retirement system,” Gore charged, “it would quickly become a system of social insecurity.”

Campaigning nearby in the Philadelphia suburbs, Bush dismissed the criticism and charged that Gore and President Clinton have squandered the opportunity to strengthen and reform the system.

“There needs to be Social Security reform in order to make sure there’s a Social Security system at all,” Bush said.

Both men were campaigning in Pennsylvania, a potentially pivotal state in the fall, on the day that it was holding its primary.

In political terms, Gore’s plan appeared aimed primarily at one of the key swing voting blocs in the electorate: married women, especially those with children--the so-called soccer moms.

Though married women generally backed Republican presidential candidates in the 1980s, Clinton carried a plurality of their votes in 1996. Recent polls show Bush, who has stressed his commitment to education, is moving many of those voters back into the GOP column.

Specifically, Gore’s plan would tackle what he called “the motherhood penalty” in Social Security. Since Social Security benefits are based on a person’s average earnings during his or her working lifetime, women who stay home to raise children can be hurt because their average is reduced by the years they remain out of the work force.

To mitigate that problem, Gore proposed that women who stay home with children (or work part time) should be credited under Social Security as if they had been earning $16,500 a year for up to five years (That figure is one-half the average wage). His aides said the plan would benefit up to 8 million workers, most of them women, and increase retirement benefits for those affected by an average of $600 a year.

Gore said the change is necessary “to honor the work that women do and that others do in raising children, without requiring a large financial sacrifice.”

The second prong of Gore’s plan would allow widows and widowers to keep 75% of a family’s joint benefit when their spouse dies. Under current law, he said, benefits can be cut to half or two-thirds of the previous level.

Aides did not release specific cost figures for the proposals but said it would be less than 5% of the anticipated Social Security surplus--now projected at $2 trillion over the next decade. That would amount to about $100 billion.

Heidi Hartmann, president of the Institute for Women’s Policy Research, praised the plan and said Gore had set the earnings credit at “a generous level,” since the median income for female workers in 1998 was only $17,500. “For some women, they would be getting a credit for their child-raising years that would be larger than their earnings.”

Bush didn’t specifically respond to the initiative but more broadly argued that the best way to ensure “benefits for all women” is “to reform the system.”

Though Bush hasn’t fully detailed his plans, the question of how to shore up the nation’s principal programs for the elderly--both Social Security and Medicare--is emerging as one of the clearest contrasts between the two presumptive nominees in the fall election.

A parallel debate is emerging between the two men on both issues. As in his speech Tuesday, Gore says that both programs can be stabilized essentially through the infusion of funds from the federal surplus without major structural changes. And he says there is even enough money to enhance benefits: prescription drugs under Medicare and the new credit for mothers under Social Security. Bush, by contrast, contends that Gore and Clinton are endangering the programs by resisting necessary modernization and reforms to give individuals more choice.

Without specifying an exact amount, Bush has proposed that younger workers be allowed to divert a portion of their Social Security payroll taxes into individual retirement accounts they could invest in the stock market themselves. Bush has also refused to rule out an increase in the retirement age as part of an overall reform package.

“This is going to be an important debate,” Bush told reporters Tuesday after an appearance at a suburban high school here. “It’s the status quo, an administration that has not tried to reform Social Security versus an administration that will put capital on the line [to do so].”

While proposing the new benefits for mothers and widows Tuesday, Gore has not offered any specific measures to restrain the future cost of Social Security. The vice president has already ruled out either raising the retirement age or diverting part of the payroll tax into individual investment accounts. “I believe it’s wrong to ask our elderly to roll the dice with their retirement savings,” Gore said.

Perhaps the core of the dispute, though, is how much of the anticipated federal surplus to apply to Social Security. Both men have called for reserving all of the anticipated 10-year, $2.2-trillion surplus in the Social Security account for the retirement system itself. In practice, that would mean the money accumulated in Social Security, beyond the level needed to pay current benefits, would be used to buy down the national debt.

Clinton and Gore have gone a significant step further by proposing to transfer from the Treasury to Social Security, beginning in 2011, an amount equal to the interest savings the government enjoys because of that debt reduction. That would produce transfers into the system of as much as $250 billion annually by 2015. The administration claims such an infusion would maintain the system’s solvency until 2050.

By contrast, Gore charges that Bush’s proposed across-the-board cut in income tax rates would decrease federal revenue so much that Washington would have to dip into the Social Security surplus to finance the shortfall. “I will fight against any effort by any politician to dip into the Social Security trust fund for any purpose, especially to finance some risky tax scheme,” Gore declared Tuesday in what has already become a common refrain.

Bush insists the operating surplus will be large enough to finance his tax cut without forcing him to dip into Social Security funds. And, while he has not ruled out applying future savings on interest payments to Social Security, Bush argues the administration plan will provide an inadequate safeguard without more structural changes to the system.

“We think the first thing we need to do is . . . reform the program before just throwing money at it,” says Ari Fleischer, Bush’s deputy communications director.