RE: New Retirement Accounts

[National Dialogue Moderator <moderator>]

President Clinton's proposal to create Universal Savings Accounts
is a good start toward opening up savings to all Americans, but
does not go far enough to effectively address the long term solvency
problems Social Security faces in the coming years.

Universal Savings Accounts for Wealth Accumulation offer a major
forward stride in U.S.  Entitlement Policy, and bring wealth
accumulation into focus on the Social Security debate.  The White
House proposal divides up 11% of the budget surpluses into flat
amounts to be contributed to the USA accounts (the approximate
equivalent of 1% of payroll, or $33 billion a year).  The White
House proposes a personal savings match component:  Individuals
contribute additional personal dollars, and the government will
match a percentage of each dollar.  For lower income workers, a
larger percentage will be matched for each dollar contributed.
This is a major step toward ensuring that all Americans have an
ownership stake.

By making the proposed Universal Savings Accounts a new entitlement
added on to the existing unfunded system, however, leaves the long
term solvency issue unanswered.  This will eventually create an
economic burden that future tax payers must carry, and undermine
the benefits of the Universal Savings Accounts.  We need to create
individually owned accounts within Social Security to create a pre
funded, sustainable system of retirement security.

Sam Beard
ES2000