Worth Noting

Response to Dean on Social Security

October 28, 2009

On October 27, Governor Howard Dean and I debated at the Penn State Distinguished Speaker Series in State College, PA. During the debate, Governor Dean denied that President Bill Clinton and Vice President Al Gore ever supported investing a percentage of Social Security tax revenues into the stock market, while I said the Clinton-Gore Administration did. Governor Dean suggested I was misleading the audience.

In response to Governor Dean's flawed argument and to set the record straight, I've posted the transcript of President Bill Clinton's 1999 State of the Union speech where he unveiled his Social Security reform plan as a "historic decision to invest the surplus to save Social Security" that would invest about 14.6% of the Social Security Trust Fund in the stock market. I’ve also listed several links to articles and official documents from 1999-2000 that discussed this Clinton-Gore proposal and the national debates that followed.

Links:


The State of the Union, President Bill Clinton, January 19, 1999, http://bit.ly/3JLerk

“Part of the surplus dedicated to Social Security would be invested in private securities, further strengthening the Trust Fund by drawing on the long-term strength of the stock market, and reducing the debt to ensure strong fiscal health.” President Bill Clinton, Page 3, Budget of the United States Government: Fiscal Year 2000, http://bit.ly/1QKFRm

“Increase returns through private investment: The Administration proposes tapping the power of private financial markets to increase the resources to pay for future Social Security benefits. Roughly one-fifth of the unified budget surplus set aside for Social Security would be invested in corporate equities or other private financial instruments.” President Bill Clinton, Page 41, Budget of the United States Government, Fiscal Year 2000, http://bit.ly/1QKFRm

"State of the Union: The Future; Greenspan Sees Possible Threat in Clinton Plan," David Rosenbaum, The New York Times, January 21, 1999, http://bit.ly/2TsMZh

"Economic Scene: Clinton's Plan for Social Security Has Its Backers. But Does America Want the Government to Be a Big Shareholder?" Michael Weinstein, The New York Times, January 21, 2001, http://bit.ly/3kfswU

"Social Security: Sticking His Neck Out," Adam Zagorin, John Cloud, TIME, February 1, 1999, http://bit.ly/37UVUm

“What the President’s Proposal Does and Does Not Do,” United States General Accounting Office, Testimony Before the Committee on Finance, February 9, 1999, http://bit.ly/3AXi2d

"On Social Security, Will the Real Al Gore Please Stand Up?"  Michael D. Tanner, The Cato Institute, August 14, 2000,  http://bit.ly/2j0Bl8


The Clinton-Gore approach differed from the Bush Administration’s proposal in that 14.6% of the Social Security Trust Fund would be mandatorily invested in the stock market, while Bush favored allowing younger workers the choice to put some of their Social Security taxes into broadly based mutual funds like the “Thrift-Savings Program” accounts available to federal workers.

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