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American Morning

Bush Appoints Commission to Consider Social Security Reform

Aired May 03, 2001 - 09:24   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: President Bush has named a panel to find ways to preserve and modernize Social Security, and the panel is already under fire.

For that story, let's go now to CNN's Jeanne Meserve; she's standing by in Washington.

Good morning, Jeanne.

JEANNE MESERVE, CNN CORRESPONDENT: Good morning, Leon.

Under fire because, to a person, everyone on that commission supports privatization -- that is, they'd allow Americans to set aside a portion of their payroll taxes to open investment accounts.

Joining me now, a member of the commission and former member of Congress, Bill Frenzel and also, I have say, with the Brookings Institution, now.

Thanks so much for coming in today.

BILL FRENZEL, FORMER U.S. REPRESENTATIVE: A pleasure.

MESERVE: Now, many people who have opened their brokerage accounts recently and seen them plummet along with the stock market, might be saying this morning: What are you thinking of? Why would you want to do this?

FRENZEL: I think the idea is, in Social Security we're investing for a lifetime, not for a year or two years or a couple of quarters. And over the average -- over any worker's lifetime, investments in equities are almost certain to yield a much higher return than that which we get now.

MESERVE: Now, I know the commission has not yet started meeting, but personally, what do you favor? A program that would add on to the current Social Security benefit, or something that would carve out of the existing benefit?

FRENZEL: Well, my inclination has been a carve-out, but I think the commission is going to look at all the opportunities. I don't sense that there's any -- a lot of preconceived notions about how we proceed other than to provide a private investment vehicle. MESERVE: Now, this would have a price tag, and probably a high one. Given the size of the tax cut that is going to move through Congress, is Congress going to have enough money to do this kind of Social Security reform?

FRENZEL: I believe that it will, and I think a lot of the members of the commission believe it will. I think the president believes it has to. If Congress decides there isn't enough and it won't go forward with it, we're just a commission reporting to the president, who will presumably send our report to the Congress. But the Congress will have to make the decision.

MESERVE: And it's going to get to Congress in an election year, and some people say there's not much chance Congress is going to want to deal with it at that particular point in time.

FRENZEL: It's, politically, very sensitive. But the problem is, our Social Security system does go broke, according to recent estimates, in 35 years. And if we don't do something, we're going to be in trouble. This is one of the things that can be done, and I believe that the commission can come up with a good system.

MESERVE: Bill Frenzel, thanks so much for joining us here today.

And Leon and Daryn, we will be getting a different point of view. We will be talking, shortly, to Tom Daschle, the Senate majority leader -- minority leader, excuse me. Back to you.

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