Chattanooga Times/Chattanooga Free Press

December 14, 2001 Friday

SECTION: NEWS; Pg. A12

GOP outlines plans for Social Security

by Jim Abrams The Associated Press

WASHINGTON -- House Republicans outlined two different plans Thursday to ensure the survival of Social Security over the next 75 years. Both allow younger workers to invest some wages in personal retirement accounts. The bills came two days after President Bush's Social Security commission offered three proposals for private accounts among its recommendations for the future of the retiree benefit program. The commission suggested Congress take at least a year to discuss the options before taking action to revamp the 66-year-old system.

The two bills' sponsors said it was not too early to get the legislative process started. Rep. E. Clay Shaw, chairman of the Ways and Means Social Security panel, said the difficulty of moving Social Security legislation in an election year did not deter him. "If I see the opportunity to move a bill forward, I will," said Shaw, R-Fla.

Added Rep. Jim DeMint: "It's going to be an election issue whether we like it or not." DeMint, R-S.C., is co-sponsoring the second bill with House Majority Leader Dick Armey, R-Texas.

Shaw's measure would create a voluntary program under which workers could receive a refundable tax credit of 2 percent to 3 percent of their earnings that would go into a personal retirement account.

Employees could pick from a range of investment houses that would put 60 percent of the investment in stocks and 40 percent in corporate bonds.

The assets in the accounts would grow tax-free with no withdrawals permitted until a worker starts receiving benefits. Upon retirement, the worker receives 5 percent of the account balance in a lump sum.