Long-time Clinton-Gore Supporter Writes Book Blasting Gore On Social Security
(CNSNews.com) - Wade Dokken has contributed thousands of dollars to the Clinton-Gore campaigns and the Democratic National Committee. He even has a photograph of First Lady Hillary Clinton and himself displayed in his office. But he thinks Democratic presidential nominee Al Gore is dead wrong when it comes to the future of Social Security.
Dokken says the future of America's retirement security would be at risk under Al Gore's plan. "Reactionary, demagogue, ill-advised," is how he describes Gore's opposition to a partial privatization of the Social Security system. "This is not a 'risky scheme,'" said Dokken.
That's why Dokken wrote a book called "New Century, New Deal: How To Turn Your Wages Into Wealth Through Social Security Choice," released this week.
Dokken's view, that younger workers should be able to devote a portion of their Social Security taxes to personal investment accounts, is shared by prominent Democrats like Senators Daniel Patrick Moynihan (D-NY), John Kerry (D-MA), John Breaux, (D-LA) Representative Charles Stenholm (D-TX), and former Johnson Administration aide Sam Beard. Until recently, that list also included Democratic Vice Presidential nominee Joseph Lieberman, but after agreeing to be Al Gore's running mate, Lieberman changed his mind.
Democratic leaders are falling out of touch with their supporters on Social Security reform, according to Dokken. "[Retirement accounts] is an issue that cuts so positively for big parts of their constituency. It's clearly in favor of widows, African Americans and Hispanics," he said. "By transferring the opportunity for ownership of equity to another 50 percent of the population who are not participating, you have the opportunity of turning wages into wealth," Dokken said.
Dokken is a big supporter of the Social Security system, especially its success in lifting seniors out of poverty. But he's also looked at the projected balance sheet and concluded that the program cannot be sustained in the 21st century.
According to the program's trustees, starting in 15 years, Social Security will not have enough incoming tax money to pay all the benefits it owes retirees. The trustees expect the shortfall to reach more than three times the current publicly held debt with no end in sight.
Social Security's money problem stems from the fact that Americans are living longer and having fewer children. According to the trustees, in the future, there will no longer be enough workers to support the benefits of retirees without raising taxes or cutting benefits.
Republican presidential candidate George W. Bush has proposed a plan to allow workers to use perhaps two percent of their wages for individually owned and controlled retirement accounts. He reiterated that plan in Tuesday's presidential debate.
Gore opposes all such plans. Instead, Gore would use the current surplus in Social Security to pay down publicly held debt over the next ten years. Gore said during the debate that the strong economy will produce enough money from the payroll tax to prevent a shortfall in Social Security.
Unlike Bush and Gore, Dokken has first-hand experience managing retirement and investment accounts. He's a 40 year-old CEO of American Skandia, Inc., a $38 billion financial services company located in Connecticut that advertises its ability to "offer long-term savings solutions" for companies and individuals.
Opponents of personal accounts fear the loss of the insurance elements of Social Security, says Dokken. "But that doesn't need to be a fear," he told CNSNews.com. "We don't have to take away any of the insurance aspects of it. No part of choice is incompatible with the safety net," Dokken explained.
"Opponents make the [risk] argument against equities. That's a legitimate argument," said Dokken. "Having said that, it's important to recognize the fact that not only do you have an accumulation period that's invested in equities, but you can remain invested in a balanced portfolio throughout your distribution years," said Dokken.
"You turn down the probabilities of significant volatility to a very low amount," he continued. "In over a 55-year time period, age 20 to 75, the odds of equities not doing well don't exist from an historical perspective," Dokken noted.
Sam Beard agrees with Dokken. "What Wade says is we've got to update Social Security and create a nation of savers," he said. The number of Democrats supporting personal accounts is growing, according to Beard. "Seventy percent of Democrats in the House and Senate would accept personal accounts if guarantees are preserved," he said.
"It's good that Wade Dokken is willing to stand up and say this has to happen," said Beard. "Fundamentally, it's happening all over the world. Thirty countries have changed their Social Security system. It's ironic that communist China might implement a partially funded Social Security system faster than the US," Beard marveled, "and we have one of the most sophisticated equity markets in the world."