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American Morning

Minorities and Social Security Privatization

Aired August 22, 2001 - 10:29   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.
DARYN KAGAN, CNN ANCHOR: The Social Security debate is back in the spotlight today -- at issue: whether to allow private investment of some of your Social Security money. A presidential commission is meeting in Washington to discuss the issue.

Jeanne Meserve joining us from the site of today's meeting, focusing on different interest groups -- oh, some fancy graphics there for you, Jeanne.

Good morning.

JEANNE MESERVE, CNN CORRESPONDENT: Good morning, Daryn.

The debate over Social Security is of course crucial to all Americans, but most crucial to those who will rely on it most in their retirement years, including women and minorities. How do they feel about this discussion of privatizing Social Security?

Well, the Hispanic Business Roundtable did a survey of 1,000 adult and this is what they found: 61.9 percent favor private investment accounts; 24.4 percent oppose; 13.7 percent don't know.

Well, joining me right now is Naomi Lopez Bauman of the Hispanic Business Roundtable and Evelyn Morton of AARP.

Thank you both for joining us.

Naomi, let ask you first: Why do so many Hispanics favor this idea of private investment accounts?

NAOMI LOPEZ BAUMAN, HISPANIC BUSINESS ROUNDTABLE: Well, almost half of Hispanics across the country don't believe that they will get their full retirement benefits from the Social Security system.

But couple that with the growing number of Hispanic businesses in this country, as well as the strong interest in having one's own -- taking care of one's own retirement and taking care of one's family and community. You see those kinds of numbers for -- well over 60 percent of Hispanics across the country say that they do favor personal retirement accounts.

MESERVE: Evelyn, it is true, is it not, that the present system has disadvantages for minorities? EVELYN MORTON, AARP LEGISLATIVE REPRESENTATIVE: Well, I think that, while it has some disadvantages, it also has some positive advantages.

For instance, it's inflation adjusted. It provides disability and survivor protections that are not part of the retirement system. And it has a benefit formula that gives low-wage workers a higher portion of what they earn than high-income workers.

And what we've found in some our own surveys is that people are intrigued by the idea of investing on their own, but that doesn't necessarily mean instead of Social Security. One of the things we have found is that they are very attracted to the idea of supplementing their Social Security. Yes, people should invest. We think it's important. But the question is how best to do it.

MESERVE: And, Naomi, what do you think of this idea, of making the private investment account supplemental to Social Security?

LOPEZ BAUMAN: Well, I think that is one good option to examine, particularly for the Hispanic community across the country. We know right now that less than a third of Hispanics have saved even $5,000, with many of them saving nothing for retirement.

And what we see is that the current Social Security is squeezing out opportunities for private retirement savings. And that is a big concern.

MESERVE: One thing you didn't get to in your discussion was how the present system penalizes minorities. I saw one statistic that an average African-American makes $21,000 less on Social Security than someone of a similar income who is white.

MORTON: It depends on when you are comparing -- when you are comparing apples to oranges.

I think you have these average workers, and most people are not average. And so you really have to look at individual cases. For instance, African-Americans really benefit disproportionately from the disability and survivor protections. And these comparisons only look at the retirement side.

MESERVE: And we, unfortunately, have to leave it there.

Evelyn Morton and also Naomi Lopez Bauman, thank you both for joining us.

LOPEZ BAUMAN: Thank you.

MESERVE: We'll have a discussion with a commission member next hour.

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