Thursday, March 3, 2005 | 9:38 a.m.
A leading economist and member of the President Bush's Commission to Strengthen Social Security pushed the benefits of the administration's Social Security proposal Wednesday at UNLV, saying the plan would allow Americans greater control over their retirement benefits.
Dr. Thomas Saving, who teaches economics at Texas A&M University and serves as a public trustee for the Social Security and Medicare Trust Funds, came to Las Vegas this week for family matters. UNLV School of Business invited him to campus and Saving said he spoke free of charge.
His visit was promoted to media locally by November Inc., a Republican political consulting firm. The only involvement November Inc. had in Saving's lecture was to facilitate media relations, said Sarah Nelson of November Inc.
On Wednesday, Treasury Secretary John Snow announced the Bush administration will send senior officials on a 60-day, 60-city promotional campaign to drum up support for the Social Security plan, which has met with strong opposition by Democrats and wariness on the part of some Republicans.
Saving's visit to Las Vegas was not part of a coordinated plan by the Bush administration, Nelson said.
Saving, meanwhile, did not want politics to get in the way of discussing the issue of Social Security reform. While he spent much of the lecture at UNLV discussing the Bush proposal, he presented other reform plans as well.
"Ultimately with Social Security, you get the amount that Congress gives you," Saving said, adding that under the current plan Social Security benefits are considered "a privilege, not a right."
He said that the Social Security changes proposed by President Bush would allow Americans a legal right to their pension benefits that previously had not been provided.
Under the Bush proposal, Americans under 55 can place 4 percent of their Social Security taxes into private accounts that could be invested into stocks or bonds. The participant would receive less in guaranteed Social Security benefits but would be able to invest a small portion of their benefits as they see fit, and any accounts could be passed on to family and friends upon the participant's death.
If Congress passes the proposal, it would be entirely voluntary.
Saving said that investing a small portion of one's Social Security taxes could provide a higher return in the long run if invested into the stock market. In 2000 to 2002, the stock market's annual rate of return peaked at 9.74 percent and a low of 7.35 percent, said, quoting figures from Dow Jones.
Even at the stock market's low point, from 1929 to 1932, the annual rate of return peaked at 9.28 percent and had a trough at 2.61 percent, he said.
"If you sold at the trough, you still didn't do too badly," he said.
The biggest problem under the current plan, he said, was the decreasing amount of money available to aging baby boomers. Currently, Americans put about 12 percent of their taxes into Social Security, but that rate would need to be increased to 21 percent to keep up with the current retirees who will be receiving benefits.
"The people who don't want to do anything will say that there will be no problem until 2042," Saving said, adding that the problems with Social Security will be felt much sooner.
Social Security has become a highly contentious issue between Republicans and Democrats in recent weeks. Both sides have held numerous press events touting their positions, and national organizations such as the AARP and the AFL-CIO have become involved as well.
On Saturday, Senate Minority Leader Harry Reid, D-NV, will come to Las Vegas from Washington to hold a town hall meeting to discuss Social Security, said Tessa Hafen, spokeswoman for the senator.
Reid believes that "President Bush's plan to reform Social Security would destroy it," Hafen said. "It's not a crisis and we need to take the time to (reform) it right."
Reid's visit to Las Vegas in part fueled November Inc.'s interest in publicizing Saving's lecture at UNLV, Nelson said.
"It makes sense to get the other side out," she said.
Savings said he had never met anyone from November Inc. and knew very little about the organization. He said he came to Las Vegas because his wife has an aunt and uncle living in Henderson.
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