President Ties Social Security's Future to Stocks; Market Experts Mostly Bullish On Proposal's Impact on Wall St.
President Clinton's proposal to have a small percentage of Social Security money invested in the stock market could be just the tonic Wall Street needs to keep its bullish streak running into the 21st century.</br></br>At least that's the conviction of market watchers, who note with glee how the invention of individual retirement accounts and 401(k) accounts have transformed the markets in the past two decades. Last year, almost $20 billion a month in new money flowed into the stock market from mutual funds.</br></br>But some experts caution that such a huge shift could further pump up stock prices that some already consider inflated, while possibly hurting the bond market.</br></br>Clinton is proposing diverting 62 percent of an anticipated $4 trillion federal budget surplus over the next 15 years to Social Security, then investing less than one-quarter of that amount in the equity markets instead of Treasury securities, in which the fund now invests.</br></br>Clinton also wants to take another 11 percent of the budget surplus to establish "universal savings accounts," which would be similar to the 401(k) accounts that many employers offer. Together, the two proposals could add as much as $6.5 billion or so a month to the market.