Douglas still supports idea of privatizing Social Security

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(Host) Governor Jim Douglas says the drop in the stock market hasn’t dampened his enthusiasm for the idea of privatizing Social Security, a proposal that Congress never adopted.

Democratic gubernatorial candidate Gaye Symington says she’s astounded by Douglas’s position. She says the proposal represents the same philosophy that has caused the current financial crisis.

VPR’s Bob Kinzel reports.

(Kinzel) Several years ago, President Bush unveiled a plan to allow workers to divert some of their Social Security tax payments to a private investment fund. Governor Jim Douglas says he liked the proposal then and he likes it now.

Douglas says many people view Social Security as part of their comprehensive retirement package and he says individuals should be allowed to decide how to invest some of their tax payments.

(Douglas) “I think the American people are a lot smarter than some give them credit for. So, I think that some kind of combination is reasonable. A voluntary option for the American people to have what’s called a defined contribution plan for a portion of their retirement funds is a reasonable one. I’ve been encouraging that at the state level, as well."

(Kinzel) Douglas acknowledges that the recent drop in stock prices could affect the value of these private accounts. But he says he has confidence in the long-term stability of these investments.

(Douglas) "Over the long run, the American economy has performed. And even though we’ve been through the Great Depression and other downturns over time – even smaller downturns recently, just five years ago – in the long run, the American economy has performed and we all have to have faith in it. If we don’t, then we’re going to be in real trouble."

(Kinzel) Democratic gubernatorial candidate Gaye Symington strongly opposes this plan because she says a dramatic drop in the stock market could seriously jeopardize these retirement accounts.

(Symington) “Social Security has got to be supported, not undermined. And we need to do better than simply letting Wall Street take care of us. It’s amazing to me that he could have that perspective, given the $700 billion bill that we’re all facing as a price tag. That same attitude about Wall Street knows best."

(Kinzel) Independent candidate Anthony Pollina says Douglas’s philosophy on this issue represents the same approach that has caused the country’s current financial crisis.

(Pollina) “The free market and Wall Street have been chewing people up and spitting them out lately. So, I just think it shows that Jim Douglas is really out to lunch when it comes to this issue, that he’s fully attached to the failed policies of Bush and McCain."

(Kinzel) Pollina says he’s met a number of voters in the past few weeks who have expressed great concern that their retirement accounts have lost a lot of money during the course of this year.

Pollina says Douglas’ plan would make this situation even worse.

For VPR News, I’m Bob Kinzel in Montpelier.

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