How's this for an outrageous proposition: Americans should have more control over the way their retirement savings, through Social Security, are invested. That's what most members of the government's Advisory Council on Social Security concluded last week, as the group suggested three reform options that would postpone the day, now only about 15 years away, when the program will begin to collect less in taxes than it has promised to pay out in benefits.
The most market-oriented option, backed by five of the council's 13 members, would direct 40% of the Social Security payroll taxes now collected from each worker and his employer into a new personal security account, similar to the 401(k) and IRA accounts already familiar to most Americans. A second option, backed by two other council members, would allow a lesser degree of individual control. But to hear the howls of protest from union leaders, the seniors lobby and many Democratic lawmakers, you might think the pro-market council members had proposed to hand the keys to the Treasury over to a group of particularly selfish and spendthrift adolescents.
Critics of the personal security accounts fretted that the average American, if allowed to choose how to invest part of the 12.4% of his pay that he and his employer must now send to Social Security, might speculate on, say, cattle futures (without the helpful insider advice that Hillary Clinton got) or engage in similar recklessness. The we-know-better crowd are also worried that any partial privatization of Social Security might give the average Jill the heretical idea that those fica deductions from her paycheck belong to her and that she should control how all that money gets invested. This would, they said, undermine support for Social Security's lesser-known role as a safety net for the working poor and disabled. Senator Daniel Patrick Moynihan, the New York Democrat, predicted that the safety-net part of the program would suffer the fate of welfare. "Support for the redistributive aspects of Social Security would quickly erode," he said.
There are good reasons to believe, however, that harsh assumptions about Americans' compassion and prudence are not justified today--if they ever were. One of the most encouraging messages from the November election is that even as voters demand an end to welfare dependency, they want a stronger social safety net--not entitlement subsidies for rich and poor alike, but instead temporary help for those who work hard and suffer a layoff, a divorce or the illness of a child. Exit polls, as well as interviews by TIME correspondents with voters in cafes and K Marts, indicate that this desire for a stronger safety net--and the suspicion that most Republicans don't understand it--explains much of the voting gender gap. Women feel more vulnerable than men to calamities like sudden single parenthood. And in today's tumultuous, hyper-competitive, global economy, which creates many new jobs but with less security, men as well as women can imagine themselves needing help someday to keep their health insurance during a period of unemployment, to get loans for additional education or to support themselves if the stock market crashes just before they retire.