Sharing the Wealth: More Social Security Or Less? Clinton Plan Faces Lots of Questions --- But Stock-Market Proposal Opens Debate With GOP On a Key National Issue --- A New Kind of Savings Fund
WASHINGTON -- President Clinton made a bold opening bid in the Social Security debate, proposing to invest hundreds of billions of taxpayer dollars in the stock market and to create government-sponsored, 401(k)-type individual savings plans for taxpayers.</br></br>"We must help all Americans, from their first day on the job, to save, to invest, to create wealth," the president said during his State of the Union address last night.</br></br>The plan, offered in the face of a congressional effort to remove the president from office, drew immediate and harsh criticism from congressional Republicans. But by agreeing to channel Social Security funds into the stock market and advocating individual savings accounts, the president advanced a debate that promises to be one of the most provocative of 1999.</br></br>For Wall Street, the stakes are huge. The Clinton plan and some congressional alternatives would channel between $650 billion and $1.2 trillion of taxpayer dollars into stocks over the next 15 years. At the end of that time, White House officials said, the government would own 4% of the entire U.S. market. A number of Republican alternatives would channel as much money into the stock market, but would do it through individual accounts.</br></br>The amounts being talked about are large but not overwhelming. An investment of $650 billion over 15 years would equal about $3.6 billion in new money a month. By comparison, individual investors have put $1.1 trillion into the stock market since 1991 through mutual funds, or about $11.5 billion a month, according to the Investment Company Institute. Since 1996, those mutual-fund inflows have averaged $17.1 billion a month.