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Gore Unveils New Retirement PlanAired June 20, 2000 - 1:08 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: Within the past hour, Democratic presidential hopeful Al Gore weighed in with his plans for keeping Americans solvent in their golden years.
CNN's Brooks Jackson reports, Gore doesn't want to tinker with Social Security; he wants to add to it.
BROOKS JACKSON, CNN CORRESPONDENT (voice-over): He criticized George W. Bush for proposing private Social Security accounts, but now Al Gore is proposing his own; only Gore's is all pleasure, and, depending on your income, no pain.
Gore is calling his plan "Retirement Savings Plus." Unlike Bush's plan, which is carved out of existing Social Security taxes, Gore's plan is an add-on, adding new private accounts on top of existing benefits. Gore would finance his plan with general tax revenues, and it would be expensive, $35 billion a year when phased in.
Gore's private accounts would work a lot like current Individual Retirement Accounts, investment gains would grow tax-free until money is taken out. Couples could save up to $4,000 a year. Accounts would be held by private financial companies, such as stockbrokers or banks, and investments would be limited to mutual funds; no day-trading or stock-picking allowed. Savers would get a tax deduction for their contributions and, this is the expensive part, most would also get a big subsidy, practically free money.
To get the full benefit, couples making $30,000 a year or less would have to put in only $1,000 of their own money, and the government would put in another $3,000 by way of a tax credit: a three to one match. Couples making more would get less. At $90,000 a year income, a couple could put in $3,000 and the government would put in only $1,000. Those making over $100,000 a year could not even participate.
(on camera): Gore's plan differs from Bush's, Gore has a big Robin Hood element. He'd transfer billions from upper-income taxpayers to lower-income savers. And while Bush would use stock market investments to shore up current Social Security benefits, Gore would do nothing to change the basic structure of the troubled Social Security system, which in about 30 years will take additional tax money to prevent big cuts in basic benefits. Brooks Jackson, CNN, Washington.
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