News Chief Washington Correspondent: Today on Face The Nation - the debate to reform Social Security. Is it just common sense or risky business? It could become the hottest issue of the presidential race, what to do about Social Security. The presidential candidates are already taking their positions - should people be able to invest a portion of their Social Security money in the stock market? Vice President Gore says no, too risky; Governor George W. Bush says yes and will outline his plan to do it this week.
Today we'll debate all sides with New York's Democratic Senator Charles Schumer, Pennsylvania's Republican Senator Rick Santorum, and Nebraska's Democratic Senator Bob Kerrey.
Then we'll turn to politics and talk with Bill Kristol of The Weekly Standard and John Harwood of the Wall Street Journal.
Gloria Borger will be here, and I'll have a final word on commencement.
But first, a debate on Social Security on Face The Nation.
Announcer: Face The Nation, with chief Washington correspondent Bob Schieffer. And now from CBS News in Washington, Bob Schieffer.
Schieffer: Good morning, again. Well, Social Security always plays a part in any presidential election, and it is shaping up now as maybe the issue of the coming presidential campaign.
Governor Bush will outline his plan to reform Social Security sometime this week. It includes a very controversial proposal to allow Social Security recipients to invest part of those funds in the stock market.
Vice President Gore jumped on it, said it was risky, irresponsible, and accused Mr. Bush of having a secret plan to overhaul Social Security.
Well, we're going to try to get all sides of that this morning. Joining us from Omaha, Nebraska, is Senator Bob Kerrey. With us from New York City, Senator Charles Schumer; with us here in the studio, Senator Rick Santorum.
Now, Senator Schumer joins the vice president in saying this is a terrible idea. Well, Senator, let's start with you. Why would this privatization bankrupt the system, as the vice president has said?
Sen. Charles Schumer (D-N.Y.): Well, I don't know if it bankrupts the system, but I think we've always had in retirement, Bob, three legs to the stool. They are IRAs, pensions, 401(k)s and Social Security. Americans have invested heavily in the stock market in their IRAs and 401(k)s and that's good. But there ought to be one secure leg that does not depend on the whims of the stock market.
Right now, of course, the stock market has gone up, up, up, up, up, but we know what goes up must come down. And there ought to be a basic floor that people don't have invested in riskier propositions. You know your money is safe in Social Security. If you invest in the stock market, you could have it be half the value of what it was when you put it in.
Schieffer: Senator Schumer, do yothink the vice president may have gone a little far when he just ripped into this proposal, called it, you know, words like "irresponsible," said the vice president (sic) had this secret plan. Did he go a little far in that?
Schumer: Well, let me say, I think two things the vice president said are right. George Bush did propose a privatization of Social Security. It is a partial privatization, but it is privatization.
And second, if George Bush has a plan to radically change Social Security - and this does change it radically - he ought to lay it out before the American people before the election. There should be no secret plan.
His advisers said, well, he's not going to get into the details, and I think that is really, really not what elections or running for president is all about. No secret plans on something as important and almost as sacred as Social Security.
Schieffer: Well, apparently he does plan to flush it out somewhat either this week or early next week, Senator Santorum. Now, you're one of those who think it is a really good idea to do this. In fact, would you go beyond what Mr. Bush is doing. So why isn't it risky business?
Sen. Rick Santorum (R-Pa.): Well, it's not risky business. First off, Chuck talks about the three-legged stool. Most Americans don't have either of the other two legs. They don't have pension systems, and they don't have 401(k)s or IRAs, and rely solely on Social Security.
No one - and I and Chuck know this - no one is suggesting that we eliminate the basic benefit from Social Security. Every plan - Senator Kerrey's plan, my plan, other plans that are out there, and I'm sure Governor Bush's plan - will have a guaranteed base benefit that the government will stand behind to make sure that no one retires in poverty.
But what we want to do is create the opportunity, in addition to that basic benefit, and to help in fact support the basic benefit, to take just a small portion of the Social Security tax, have it invested in the market, so the rest of America can participate in the growth of the American economy and to the - and invest - I mean, we are denying over half the people in this country what is the greatest source of wealth, which is the accumulation of gains in the market.
Gloria Borger, U.S. News & World Report: Senator Kerrey, what we are talking about here is investing 2 percent of the payroll tax into the stock market. You met with Governor Bush. Do you think he is taking a big risk here?
Sen. Bob Kerrey (D-Neb.): No, I don't. In fact, Tony Coelho called yesterday and indicated the vice president would like to meet with those of us who believe that these kinds of proposals can do exactly what Chuck Schumer says - it strengthens the other legs of the stool. It preserves the basic benefit package of Social Security. It doesn't give people the opportunity to invest in the stock market. It gives them the opportunity to take full two points of their payroll tax with incentives to go up to $700 a year with accounts opened at birth and allow them to do basically what the employees of the federal government do.
You don't invest in individual stocks, you can invest in lower yielding bonds. You can invest in funds that are relatively low risk. But the problem that we have in America that this proposes to solve is that the poor working people, the middle-income working people as well, are struggling to save money and to accumulate that second and third leg Chuck talked about.
Borger: Senator Kerrey, do you believe than that by Vice President Gore requesting this meeting, that in fact he is changing his mind or open to some kind of revision on his plan? Because after all, the president had proposed something similar to this. Do you think there's any leeway there?
Kerrey: I don't know if there's any leeway, but I think the vice president comes with the same sort of values that most people who look at Social Security do. They understand that the program has been enormously beneficial, especially for low-income working people, it's reduced the rates of poverty, and Medicare has. And he's concerned about making certain that program is healthy and alive.
The political rhetoric on both sides often times masks, at least in the vice president's side, very sincere concern to try to figure out how to save and strengthen this program.
Borger: So, you think the vice president ought to calm down?
Kerrey: You got Senator Robb, you got myself, you got Senator Breaux, on a proposal that says to 150 million beneficiaries right now under the age of 40, that we'll be able to keep their promise to you. And to the 75 percent of the households under $25,000 a year, we know that you're not able to save very much money, and this will give you the opportunity to accumulate wealth very much like every member of Congress does through the thrift savings plan and all of our employees do as well.
Schieffer: Let me go to Senator Schumer. How much would this cost, Senator Schumer, and does this put Social Security at risk because we know that, what, in about 20015, the payroll taxes will no longer be greater than the benefits that will have to be paid out. Does this pose any kind of risk of that sort for this, if you put some of this money aside to invest in the market?
Schumer: Well, sure, if the market goes up, it obviously doesn't. And Rick and Bob are correct, that they want to see as do I, every American participate. But let me tell you, my wife and I are saving money for our daughter's college education. We want to make sure it's there by the time they go to college, and we don't put it in the stock market. Certainly, if have you a good amount of money and you should put some of it in the stock market. But if you're a poorer person, and you depend on that Social Security, remember the maximum is less than $20,000 a yea. You don't want, even if there's a 25 percent chance that the stock market goes down cataclysmicly, that you don't have that money.
And that's what the problem is. The problem is that Social Security has worked the way it has been, and you start privatizing it, God knows where we end up.
Schieffer: Let Senator Santorum respond. I'm sorry Senator Kerrey, let SenatorÂ…
Schumer: Go ahead, Bob. Go ahead, Bob.
Kerrey: Well, Chuck, our proposal doesn't say invest in the stock market. Our proposal does exactly like the thrift savings plan provides for you, provides for Rick, provides for me and all of our employees. We've got employees that are investing in thrift savings plans, and as a consequence, they accumulate wealth. They're not out there picking individual stocks. You're setting up a false choice.
Santorum: That's exactly right, Bob, and the fact of the matter is, we're talking about a very small portion of this. There is a guaranteed benefit there. No plan - no plan - will not continue to provide a guaranteed benefit. What we're trying to do is simply help, number one, finance that guaranteed benefit through the investment in mutual funds as Bob has talked about and create the opportunity for wealth creation and passing wealth from generation to generation.
Borger: Well, what if you decide to retire at the moment the stock market goes down, Senator Santorum?
Santorum: Again, one of the things that we look at and is what the investment will be. And certainly when you're younger, and we're looking at a 20-year-old, they're going to be invested probably very heavily in equities, and they should be.
But as you get older and you get closer to the retirement age, you're going to go more toward fixed incomes, more toward bonds. And, again, that's the education of the American people over time. We're not talking about giving these accounts to people who are 60. We're talking about, as Bob talked about, giving the opportunity - we're not requiring - the opportunity for 20-year-olds and 30-year-olds and even some in their early 40s the opportunity to do this, to go along and become educated, to become good savers and investors, which is the key to wealth creation in this country.
Schieffer: Let me go back to Senator Schumer. He wants to say something.
Schumer: Yes. What I want to say is, first, what you are proposing is lowering the guaranteed retirement benefit, because if the stock market goes down or gets wiped out, you have lowered the amount that people get. Talk to a senior citizen who has nothing else other than their Social Security. 17-18-19,000 dollars a year isn't much for them.
Santorum: Chuck, you simplyÂ…
Schumer: Second - let me just finish.
Santorum: You haven't read the plan, Chuck, that's not what we do.
Schumer: That's what George Bush has suggested.
Santour: Well, George Bush hasn't put his plan out there, so you don't know that.
Schumer: The second problem is very simple. You can say that the government will limit what your investments should be. We don't know what George Bush will do with that, although what he talked about seemed to suggest that the individual could choose whatever they wanted.
But even so, if the market goes down rather significantly, mutual funds will go down, all of the broad-based indexes will go down, and the bottom line is this - should Social Security be a floor, a safe floor, that is not put in something risky, in fact, where the principle doesn't shrink?
Kerrey: I think it should be.
Schumer: Or should Social Security be made riskier?
Santorum: Chuck, it's a false choice.
Schumer: I say not.
Kerrey: I agree with you, I agree with you.
Schumer: It is not a false choice.
Santorum: Chuck, it's a false choice because Social Security is unfunded now. You're assuming that we're talking about, well, everything will be fine if we just leave it alone. And you know, Chuck, it won't be fine if we leave it alone.
In fact, the money reasons out in the year 2015 - requires a massive transfer from federal income tax revenues into Social Security to pay benefits in the terms of $11 trillion. So we don't have the money just sitting there in the trust fund.
As you know, Chuck, there is no money in the trust fund. There are IOUs in the trust fund that we have to redeem some day.
What we're doing is a responsible way to put more money in the system through the growth in the markets over time. We're not talking about crashes over a two or three-year period of time. We're talking about 20, 30, 40 years, and that's the way you finance retirement system. Every other retirement system in this country is funded this way. If it's good enough for union plans and for corporate CEOs, it should be good enough for the people who don't have savings to be able to participate.
Schieffer: Let me just go aroundÂ…
Schumer: Union plans and corporate CEOs, Rick, invest some of their money in fixed-income assets, which are there and principle doesn't shrink, and some of their money in equity assetsÂ…
And so would we do...
Schumer: Â…where the assets can shrink.
Santorum: Bob has talked about that three times.
Schumer: When you have - when you haveÂ…
Kerrey: Chuck, you should love this plan, then.
Schumer: When you have so littleÂ…
Kerrey: You should get - you should be a co-sponsor of this bill, because that's exactly what we do with this legislation.
You're describing something that's not - that I'm not proposing. You're describing now for corporate CEOs and for unions exactly what we propose.
Schumer: Yes, exceptÂ…
Kerrey: If you tink this is too risky, Chuck, we should get rid of the thrift savings plan that you use, that Rick use, that I use and all of our employees use.
Schumer: What I use, BobÂ…
Kerrey: That's not a risky proposal.
Schumer: What I use, Bob, is a thrift savings plan after I have my Social Security.
Kerrey: And that's exactly whatÂ…
Schumer: For the people you're talking aboutÂ…
Kerrey: Then you should support this proposal, Chuck, because that's exactly what we do with this plan.
Schumer: No, it isn't. You will lower - here's what you do: You lower the floor, you say that instead of 100 percent of your money being safe and non-risky, take 80 percent of your moneyÂ…
Schieffer: We're going toÂ…
Schumer: Â…take 70 percent, in Rick Santorum's case, and let the rest be put in riskier investments.
Schieffer: I'm sorry, gentlemenÂ…
Schumer: Â…Social Security isÂ…
Schieffer: I'm just going to have to bring this to a close. It's a fascinating argument. I do want to ask Senator - thank you both, Senator Kerry and Senator Schumer.
I want to ask Senator Santorum a question on another subject, because we're about to have a roundtable here and get some views on the selection process for vice presidents and so forth.
Of course, your Pennsylvanian Governor Tom Ridge is one of those being prominently mentioned as a possible running mate for Governor Bush. But you were quoted earlier this week of saying that if he opts for Ridge, the whole three months after the convention will be a debate about abortion and that's not on message. Does that mean you're against your governor being on the ticket?
Santorum: No. What I said - it was a response to another one of these talking head shows. And I said, you know, folks like the media will spend the next three months talking about it and that's what will be there focus. I don't think that should be the focus. I think Tom has been a terrific governor, would be a tremendous addition to the ticket.
My fear is how the media will portray it. And I'm just concerned about that being the focus, because I think we have great issues like Social Security to talk about, and having the issue of abortion sort of being a divided issue on the ticket I think could be problematic.
Schieffer: Well, would you support the ticket, if he is on the ticket?
Santorum: Absolutely. Tom and I have run together on a ticket before. We're - you know, I have the utmost confidence in his ability to do this job and would be an addition to the ticket. But, again, I'm worried about the fallout in the media to that choice.
Schieffer: All right. Were going to leave it there. When we come back, we'll talk more about that in our roundtable discussion in a minute.
Schieffer: Well, a pretty livel morning so far. Joining us now, Bill Kristol, the editor of the Weekly Standard, and John Harwood, of the Wall Street Journal.
Let's start off with this business - it was in your magazine - that Senator Santorum of Pennsylvania was quoted as saying that if George Bush puts his governor, Tom Ridge, on the ticket, the whole campaign will be about abortion and that's not on message. He says now, it's a little bit out of context. But what about that, Bill?
Bill Kristol, Weekly Standard: He also says he'll support the ticket of Bush-Ridge. Pat Robertson said this morning that he could support a Bush-Ridge ticket. What strikes me, I was with some Bushies earlier this week in Texas - these aren't people right at the center of the campaign, but pretty close. I do think Governor Bush would like to take Governor Ridge.
Schieffer: Do you think so?
Kristol: Yes. I think they're personally close. He wants an outside-of-Washington ticket. They're generationally in sync with each other. Ridge is a Vietnam vet, a successful governor who has governed in the way that Governor Bush has, as a centrist but also is pretty articulate. Bush would like to take Ridge. Abortion is the question. I think they think they might be able to handle it, with people like Pat Robertson saying they could live with that.
Schieffer: What do you think, John? Do you think it would become the only issue of the three months between the convention and the election?
John Harwood, Wall Street Journal: I don't think so. And I think they probably could handle the fallout. But I think it's going to depend on their perception of how strong they are against Gore. If they've got a sizable lead, it is a risk and you don't want to introduce elements of risk into the campaign. Some people in the campaign think as long as they're riding high, there is no reason to do that.
Borger: There is also a little danger, if you pick Ridge, of alienating Catholic voters. And I think that's something they are going to consider. But I do believe that finally the Republican Party may be able to put this issue to rest. And if George W. Bush wants to be the compassionate conservative, big-tent Republican, this is clearly one way to do it.
Schieffer: What about this deal this week - this tape comes out - where we hear an official of the NRA saying, boy, if can get old George Bush elected, we'll be working right out of his office.
Is that going to have an impact?
Harwood: Well, I think it helps. Al Gore has gone several weeks without getting much of a break. Bush has been creeping up in the polls. He's had a series of good events.
Schieffer: It helps who?
Kristol: It helps Gore this. This was a good week for Gore, to have that come out. And very quickly Gore jumped on it, of course.
There are some regional variations in how it's going to ply out. The NRA isn't quite as unpopular in the South and in the Midwest as it is in the West Coast and the Northeast, but the Gore campaign was happy about that.
Schieffer: Did Gore jump on it too hard, Bill?
Kristol: Yes, gun control is one of those mythological issues that liberals in Washington think will kill Republicans and never does. I mean, your own newspaper's poll, the Wall Street Journal poll, shows that Bush is doing as well as Gore in answer to the question, how would you handle the gun issue?
Bush, of course, is going to distance himself from the NRA a little. But even the NRA - even the National Rifle Association - in the Wall Street Journal poll, it's favorable-unfavorable is something like, what, 37-37. I think Gore's favorable-unfavorable is 41-37. The NRA is virtually as popular in America today as Al Gore.
Borger: I think what this really shows is the rapid response of the Gore campaign, learned from, of course, the Clinton campaign. You know, you don't let something like this go unnoticed. You put out an ad about it immediately. You start talking about it. And that is what Gore is very good at doing, going on the attack, which, of course, we've seen a lot of lately.
Schieffer: Well, you know, there is also another truth in politics. And that is you don't get in the way of a man who is standing before a firing squad. And I wonder if it would have been more effective for Gore to just stand back and say, well, you see, I told you how it was. And just sort of let it play out. I wonder if he didn't sort of politicize it a little too much by hitting on it as hard as he did. Why is it that all of a sudden Gore is not as popular with women as he was?
Kristol: I think it gets to your last point. Gore looks partisan. The one thing we've learned in the 90's is that American voters don't like partisanship. And the great irony is that George W. Bush is running the Bill Clinton 1992 campaign and Al Gore isn't. It's Bush who meets with Bob Kerrey for over an hour. Bush is going to cite Bob Kerrey so many times in the next six months, you'll hear Kerrey's name from Bush's lips more than that of any Republican senator. Bush has learned the lessons of Clinton's two successful election campaigns, and Gore actually is running a sort of old style, very partisan, very political campaign.
Schieffer: What about - the thing we shouldn't forget to talk about is McCain and Bush are getting ready to have this famous meeting. What do you think is going to happen, Gloria?
Borger: I think McCain would just rather go in a hole somewhere than have this meeting with George W. Bush, now we've all played it up so much.
He's going to come out, he's going to endorse him, as he said last week on the show, but we're all looking for something more than that. These two are not particularly good friends. I think McCain is very well aware that he doesn't want to be thperson responsible for not having George W. Bush win this election, so I think you're going to see sort of a gung-ho endorsement.
Schieffer: Do you think, John, that in the end, that McCain could be convinced to go on the ticket if Bush asked him?
Harwood: I don't think it's impossible. One of the things that's interesting about McCain is, he's been running sort of a muted campaign in the last few weeks. He went to South Carolina, he apologized for what he did with respect to the flag. Then he went to Vietnam, he got a tremendous amount of media exposure for that. Last week he stepped out in front on Social Security. I don't think the 2000 campaign is out of his system. It's unlikely, but it's not impossible.
Schieffer: You saw McCain this week, what's his humor?
Kristol: He's in good humor, I wouldn't say he's eagerly looking forward to the meeting. I think this meeting will have more the character of a business-like handshake than an affectionate hug. But look, McCain is going to say, "I strongly support Bush. He will be a much better president than Gore. I am committed to my reform agenda, however, and I continue to differ with Governor Bush on certain issues, but we've got to beat Al Gore." And I think Bush will come out of this meeting helped by the meeting, I think.
Schieffer: We've got about 30 seconds. Who is Gore thinking about for a running mate?
Harwood: Well, there's - there aren't as many good choices on the Democratic side as there are on the Republican side. There are strong arguments for Bob Graham, who would make the ticket competitive in Florida. Some people want to look to the Midwest to someone like Evan Bayh, who's a senator from Indiana.
Schieffer: Gentlemen and lady, we have to end it there. I'll be back in a minute with a final word.
Schieffer; Finally, I was honored to give the commencement speech Friday at the University of Utah. It's a great school, it was a great day, as graduation days always are. And the 6,000 graduates and their parents couldn't have been nicer.
The grads applauded in all the right places and their parents laughed when I warned them to continue to stay on good terms with their kids, because it's the kids, after all, who will be the ones to choose the nursing homes.
But if there had been a commencement speech contest in Utah last week, I would not have stood a chance. The winner, hands down, would have been a Utah businessman named John Huntsman who spoke down the road at Weber State University.
Huntsman didn't take long to say his piece. He came to the podium, told the students, and I quote, "No exercise is better for human heart than reaching down to lift up another." Then he announced he was giving the school $1 million for scholarships and sat down. The message was, as they say, well-received.
Now all I know about Mr. Huntsman is what people out there tod me, that he's a very good man who gives millions to fight cancer and help education. So I have no idea what his next project will be, but I'll bet you one thing - he's going to be the most sought-after commencement speaker in history.
That's it from here.