EBRI SS Privatization Backing at least 15 Years Old

February 3, 2005 (PLANSPONSOR.com) - Unless there has been a drastic change in public sentiment in the last half-dozen years, President Bush could find sizable public support for his proposal to partially privatize Social Security.

Data from the Employee Benefit Research Institute show that a majority of Americans strongly or somewhat favored the idea in 1996 and 1998 polls EBRI conducted with Matthew Greenwald & Associates. However, support did fall back a bit from 58% in 1996 to 53% in 1998.

Workers were more likely than retirees to favor the idea – 61% of workers versus 39% of retirees in 1998, according to an EBRI report.

The EBRI document said that support for such individual accounts apparently dates back about 15 years with a 1990 EBRI/The Gallup Organization survey finding that 49% of respondents backed individual accounts – a support level that jumped to 61% in a 1991 poll. By 1995, according to EBRI, 53% of Americans agreed or strongly agreed that people could make more investing their Social Security payments themselves than they could through the Social Security system.

When asked about other potential Social Security reforms, respondents in the EBRI/Greenwald surveys were strongly opposed to raising the retirement age and cutting benefits for future retirees. In a 1998 poll, 52% and 56% strongly objected to these moves.

Respondents likewise opposed increases in payroll taxes (opposed by 44% in 1998, 43% in 1996, and 44% in 1994) and cutting the cost of living increases (opposed by 63% in 1998 and 64% in 1996).

Not surprisingly, the level of opposition to raising the retirement age and cutting future benefits was lower among retirees than among Americans in general. In 1998, four of 10 retirees strongly opposed upping the retirement age, compared to 56% for workers and retirees together. The percentage of retirees strongly opposed to cutting future benefits dropped sharply from 72% in 1994 to 50% four years later, according to EBRI.

The Social Security issue has become a key topic of public policy discussion with Bush Administration efforts to partially privatize the system by allowing younger workers the chance to invest some of their money – a key theme of Wednesday’s George Bush State of the Union speech.

The EBRI report is here .