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UE/Labor Party On-Line Social Security Workshop

Plan (#3)

The Clinton Plan —

Diverting 11% to
"Universal Savings Accounts"

Create New Universal Savings Accounts — USA Accounts. The President’s framework will reserve 11 percent of the projected surpluses to create new Universal Savings Accounts (USAs) so all working Americans can build wealth to meet their retirement needs.

1. Once again Clinton is playing with the Social Security surplus. This 11% still comes from money that was collected for Social Security. Now Clinton wants to divert it away from the Social Security Trust Fund, a manuever that could cause problems for Social Security in the future.

2. Setting up individual accounts to invest in the stock market has been tried in others countries and proved to be a boon to the investment community, but not to working people:

• In Chile, Pinochet’s military dictatorship ended the system of social security in 1981 and instituted individual accounts with private pension companies, requiring workers to contribute 10% of their wages. Initially, pouring huge amounts of money into the stock market artificially raised prices, however, the economic downturn has now driven down the same stocks and the average return is a 2.5% annual loss. The result is that 60-70% of the population will not even receive what was once considered to be a minimum pension, while the private pension companies report 20% in profits.

• In Britain, Margaret Thatcher’s conservative government set up incentives to persuade workers to drop their guaranteed pension plans and replace them with individual accounts. Now a huge scandal has erupted over the "pension misselling" that has cheated over 2 million workers out of a good pension because of the dishonest advice of insurance companies and investors.



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