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Save Social Security: Let workers control it

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On Aug. 14, Social Security will reach "retirement age" — 65.

Social Security has served the nation well, but if it is to continue to do so without inflicting either dramatically higher taxes on workers or drastically reduced benefits upon retirees, then it must be reformed.

Fundamentally, Social Security is ready to "retire" from its current form: a pay-as-you-go system in which today's workers pay for today's retiree benefits and a system in which the beneficiaries have no ownership interest. Legally, Social Security is not a form of insurance; it exists merely on the strength of potentially changeable promises by Congress to provide certain levels of benefits. And Congress always keeps its promises, right?

The pay-as-you-go aspect of Social Security is doomed to fail when the baby boomers start retiring in about 10 years. If even the rosiest projections hold, there will be one worker for every Social Security beneficiary not too long into the boomers' retirement. The only solutions available if Social Security's basic structure remains unchanged would be to raise taxes, cut benefits or some combination of the two.

There's a better way: Gradually turn over control — and ownership — of Social Security to individual workers. In doing so, it is crucial, both morally and politically, to allow people already retired or who are too close to retirement to make significant changes in their financial plans to continue to receive all promised benefits throughout their lifetime.

But for those who still have time to make adjustments, simply applying the principles of familiar retirement accounts, such as IRAs and 401k plans, is the best means to both protect Social Security for future generations and to help people of even modest means build significant retirement nest eggs.

Ownership of retirement accounts would fix one of the great defects of Social Security: It makes no provision for passing on to heirs the accumulated payments into the system.

Texas Gov. George Bush recognizes this with his Social Security reform proposal, which would allow Americans to put 2 percent of their Social Security taxes into individually controlled accounts.

Vice President Al Gore has proposed a similar plan, but it leaves the government in charge of the accounts instead of individuals.

Neither plan is as aggressive as one proposed by five of the 13 members of the Social Security Advisory Council. In 1997, a majority of the council recommended at least partial privatization of Social Security. Five of its members agreed on a plan that would allow individuals to set aside 5 percent of the existing payroll tax in privately held accounts.

The next president will not have to work from theory, however.

Other Western industrialized nations — among them Great Britain, Sweden and Australia — have long since either partially or wholly transformed their Social Security equivalents to individually controlled accounts, with positive results.

Social Security has had a great career. But just as most Americans do when they reach age 65, Social Security must chart a new course. The time to do it is now. If we wait until the baby boomers retire, then the question will not be how to go about reform. It will be how to pick up the pieces from Social Security's financial collapse.

Veteran television personality and author Art Linkletter is national spokesman for United Seniors Association, a senior-citizens organization with more than 675,000 members.