 |
 |
 |
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
||||||||||
 |
||||||||||
|
||||||||||
 |
||||||||||
 |
 |
 |
 |
 |
January 14, 2005
Bush Social Security Plan Faces Uphill Battle
By Mark Schulman
President Bush faces an uphill fight as he launches his campaign to overhaul the Social Security System through personal investment accounts, according to this week's Time Poll. The public is not only divided on his prescription, but also swings very negative at the upfront costs of up to two trillion dollars.
Even though the details have not been released, the plan would allow workers to divert a portion of the Social Security payroll tax into a personal investment account in return for a lowered guaranteed benefit.
Aside from the upfront cost of the transition to personal investment accounts, the poll also finds that many Americans, particularly younger people, believe that they would get a better return on their payroll tax dollars under traditional Social Security than they would with a personal investment account. A key reason may be that almost half of Americans have little or no investing experience.
Here are the detailed findings:
Americans Divided on Urgency of Overhaul
Americans are also evenly divided on Bush’s insistence on
the urgency of change. While 45% agree with the President’s dire assessment
that the system will face a crisis unless overhauled immediately, 44% believe
that this is just a "scare tactic." Bush said this week that the system will
be "flat bust, bankrupt" unless Congress acts now.
Is There a Social Security System Crisis, or Is This a Scare Tactic so that President Bush Can Put Through His Plan?
|
|
|
| Crisis | |
| Scare tactic | |
| Neither/Other | |
| Don’t know |
Few Confident in Current System
Bolstering the President's stance is that a majority of the
workforce, 53%, have little (27%) or no confidence (26%) that the current
system will be able to provide full benefits when they retire. Only 15% are
"very confident" that the system will be able to pay full benefits when they
retire.
A majority of non-retirees, 54%, also rate themselves negatively on saving for retirement. This includes 45% of non-retirees ages 55 and over, approaching retirement age.
Price Tag Too High
Even with weak confidence in the system, Americans are sharply
divided on the President’s proposed fix. When asked generally about the idea
of
building personal investment accounts into Social Security, 44% support the
concept, but 47% oppose it, even before being informed of the government
borrowing required to fund the transition.
Support for the plan sinks, 21% favor - 69% oppose, when the poll asked a follow-up question mentioning the need to borrow up to two trillion dollars to finance the plan over the next ten years or so, even though "the money would be paid back later, over time."
- Also undercutting support for the Bush plan is that a majority of Americans, 56%-33%, believe that the return on their money under the current Social Security System would be better than investing in stocks and bonds.
Republicans are much more supportive of the Bush concept than are others, at least before being told of the borrowing required. About 2 in 3 Republicans (66%) support the concept of personal investment accounts, with 44% of Independents and only 25% of Democrats supporting it. However, even many Republicans (39% favor - 47% oppose) turn negative when told of the price tag.
Inexperienced Investors
Undercutting support for the investment accounts is the
relative inexperience of many Americans in investing. Almost half (49%) have
little or no experience investing in stocks and bonds. Only 8% have a great
deal of experience, with 42% having some experience.
Widespread Support for Other Solutions
The Time Poll finds widespread support for some more limited measures to patch the system:
- 73% favor allowing Americans to invest more in tax-deferred retirement accounts outside of the Social Security System.
- 69% favor incentives for people to continue working beyond normal retirement age.
- 58% favor reducing Social Security benefits for wealthier people.
- 48% favor raising the current payroll cap on Social Security beyond the current limit.
Fewer Americans favor raising the payroll tax now to provide future benefits (41%) or raising the age when future generations can retire with full benefits (38%).
Do You Favor Any of the Following Ways to Address the Social Security System?
| Allowing to invest more in tax deferred retirement accounts outside the social security system | |
| Providing more incentives for people to work beyond ages 62 or 65 | |
| Reducing Social Security benefits for wealthier people | |
| Raising current cap on paying Social Security taxes beyond the current limit | |
| Raising Social Security taxes | |
| Raising the age for those currently under 40 for when they can expect Social Security |
Accounts More Popular with Younger and Affluent
The Bush plan concept is more popular with younger people
than with those who are older or retired. About 1 in 2 younger Americans (50%),
ages 18 - 34, support the Bush concept before being told of the needed
borrowing, compared to only 30% of those ages 55 and over. However, large
majorities of all age groups would reject the plan if it required heavy
government debt.
- Majorities in all age groups, including those under 34, believe they would do better under the traditional Social Security guaranteed benefit than if they invested a portion of their payroll tax.
Do You Favor or Oppose Changing Social Security to Allow People to Invest Part of Social Security Payroll Tax in Stocks and Bonds?
| Favor Change | ||||
| Oppose Change | ||||
| Don't Know |
Do You Favor or Oppose Allowing Some of Social Security Money to be Invested in Private Accounts and Reducing Benefits if the Government Had to Borrow Up to Two Trillion Dollars in the Next Ten Years to Pay for It?
(By Age)
| Favor Bush Plan | ||||
| Oppose Bush Plan | ||||
| Don't Know |
The personal investment account concept garners the most support from those with $100,000 or more in household income. About 3 in 5 (61%) favor the concept of Social Security personal investment accounts compared to about one-third (35%) of those with income below $35,000. Again, support among all income groups sinks when informed of the transitional price tag.
- Six figure households are also much more likely to believe it is better in the long run to invest part of their social security payroll tax (57%) than those with less than $100,000 in household income (32%).
Do You Favor or Oppose Changing Social Security to Allow People to Invest Part of Social Security Payroll Tax in Stocks and Bonds?
(By Annual Household Income)
| Favor Change | |||||
| Oppose Change | |||||
| Don't know |
Do You Favor or Oppose Allowing Some of Social Security Money to be Invested in Private Accounts and Reducing Benefits if the Government Had to Borrow Up to Two Trillion Dollars in the Next Ten Years to Pay for It?
(By Annual Household Income)
| Favor Bush Plan | |||||
| Oppose Bush Plan | |||||
| Don't Know |
Methodology
This Time Magazine Poll was conducted by telephone January 12-13, 2005 among a random sample
of 1,002 adults, age 18 and older throughout America.
The margin of error for the entire sample is
approximately +/-3 percentage points. The margin of error is higher for
subgroups. Surveys are subject to other error sources as well, including
sampling coverage error, recording error, and respondent error.
Schulman, Ronca, & Bucuvalas (SRBI) Public Affairs
designed the survey and conducted all interviewing. The full Time
questionnaire and trend data may be found at: www.srbi.com.
Related Links
