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A Passing Exploration of Privatization

By John Mintz, The Washington Post,
10 August 2000

Democratic vice presidential candidate Joseph I. Lieberman once favored exploring the idea of partially privatizing Social Security, a key proposal of Republican presidential nominee George W. Bush. But in the last year Lieberman came to agree with Vice President Gore that the GOP plan poses a financial risk to retirees.

In the last two days Republicans have publicized every policy disagreement they can find between presidential candidate Gore and Lieberman, a Democratic senator from Connecticut. They tick off issues such as Lieberman's strong support for a missile defense system, willingness to experiment with school vouchers, criticism of affirmative action and more restrictive view of the kind of parental notification necessary for minors to receive abortions.

On some of the issues cited by the GOP, the differences between Lieberman and Gore appear to be relatively insignificant. A review of Lieberman's record suggests that their biggest disagreement is over Lieberman's support of legislation to limit lawsuits and initiatives to help pay for parents to send their children to private schools.

But perhaps the most threatening issue for Gore's candidacy is Social Security. Gore makes the case that the Texas governor's proposal to allow workers to set aside a portion of their Social Security payroll taxes in private investment accounts is a "risky scheme" that could threaten the government retirement program and endanger retirees' savings.

In recent days, the Republican National Committee has pointed mainly to a single Lieberman interview from 1998, when he told the Copley News Service that he generally supports the proposition of allowing workers to invest a portion of Social Security savings in stocks.

"We're going to see again a kind of old Democratic Party/new Democratic Party kind of split on this," Lieberman said then. "I think in the end that individual control of part of the retirement/Social Security funds has to happen." Republicans also point out that a centrist political organization Lieberman chairs, the Democratic Leadership Council, also has favored the idea.

"Al Gore has viciously attacked George Bush" for his views favoring Social Security privatization and tort reform, but "he invites somebody to join his campaign who has agreed to some degree with the governor," said Dan Bartlett, a Bush campaign spokesman. "It brings into question the credibility of Gore's attacks."

"Al Gore and Senator Lieberman appear to have some basic disagreements on key issues of our time and in this campaign," added Republican National Committee Chairman Jim Nicholson. "I hope we don't see Senator Lieberman compromising strongly held positions."

But Lieberman says his interest in privatizing Social Security was a passing dalliance. In a newspaper column that Lieberman wrote in June, he said that while he found the concept compelling as a way to bring retirees a higher savings rate, he ultimately turned against it.

"As the public debate about privatizing Social Security has intensified, I have been thinking about my personal journey down the path of privatization," Lieberman wrote in the column, which he said he unsuccessfully tried to place in several newspapers. "I began with fascination, which led to exploration, then apprehension and ultimately rejection. . . . The more I weighed these facts, the more reluctant I became to tamper with the program's basic structure."

Lieberman wrote the column after Gore policy adviser Elaine Kamarck asked him and about 20 other Democratic leaders to make statements criticizing Bush's Social Security proposal.

Bartlett said he found it "curious that his position has evolved so much" recently.

Michael Tanner, director of health and welfare studies at the conservative Cato Institute, said he believes Lieberman's transformation is "a traditional case of a vice presidential nominee transforming his views to conform to those of the person who picked him. . . . I suspect if he hadn't been chosen, Senator Lieberman's private journey would have remained private."

But Lieberman disputes that. "The Bush campaign has taken some comments a couple of years ago and made them into holy writ," Lieberman said on CNN's "Larry King Live" on Tuesday. "It is not true. I was intrigued by the idea of privatization of part of Social Security."

Lieberman said Social Security--which as a pay-as-you-go system finances elderly people's retirement with current workers' payments--would lose more than $1 trillion in "transition costs" under Bush's plan to allow working Americans to place up to 2 percent of their savings into private equities.

"Look at what Governor Bush is proposing," Lieberman told an AFL-CIO gathering earlier this week. "Instead of saving Social Security, he's on a course to savage it with a privatization scheme that would take $1 trillion out of the nest egg that belongs to every worker in America, and jeopardize the program stability and the security of the working future of the American people."

Ron Klain, a senior adviser to the Gore campaign, said that Lieberman "studied the issue . . . but by the end of 1999 he came to the conclusion he was against private accounts. . . . These two candidates have the same position on this issue. They oppose Governor Bush's plan." That's not to say, Klain added, that Gore and Lieberman agree on everything--far from it.

"I am not afraid to have somebody as my vice president who sometimes disagrees with me," Gore said on NBC's "Today" show yesterday. "The policy will be the policy I decide."

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