Sununu co-sponsored privatization bill
By Tom Fahey
October 16, 2002

CONCORD — U.S. Rep. John Sununu has said during his U.S. Senate campaign he wants Social Security reform that includes optional personal retirement accounts.

But a national advocacy group said yesterday he co-sponsored a bill two years ago that would have required all workers born after 1945 to have privatized accounts.

Sununu, one of 39 co-sponsors, defended the bill yesterday. He said it would have ensured the long-term health of Social Security by keeping government’s hands off the Social Security surplus and dedicating it to retirement.

The accounts would have been fed by $1 trillion in Social Security trust funds the system needs to stay solvent, according to the Campaign for America’s Future (CAF). The group includes labor unions among its supporters.

Sununu is facing Democratic Gov. Jeanne Shaheen in the Senate race.

CAF said the bill, the Personal Lockbox Act of 2000, would have required all workers born after 1945 to have the accounts. No committee ever took up the bill.

CAF co-Director Roger Hickey described it as “a risky scheme” that would have drained $1 trillion out of the Social Security trust fund in the first decade, endangering funds meant to guarantee benefits for baby boom retirees.

CAF senior policy analyst Hans Riemer said an in-house Social Security Administration study of the bill said it would have exhausted the Social Security trust fund in 2032, seven years earlier than without any reform. He said the study showed that the bill would pull money out of the trust fund at a faster rate than it would cut benefits.

Sununu criticized CAF as “a liberal, inside-the-Beltway group” interested in helping Democrats. He accused it of using scare tactics to swing retired voters to Shaheen. “This is how the Democratic machine works. Come to the state, scare New Hampshire seniors, offer no plan, no ideas and no leadership,” he said.

Hickey said CAF gets money from a variety of sources, including labor unions. New Hampshire AFL-CIO hosted his news conference yesterday. CAF is spending $120,000 to air a television ad criticizing Sununu. The ad features a photo of his face on a cartoon landscape, playing peek-a-boo with voters.

Sununu said personal accounts should be optional: “I’ve always talked about accounts being optional.” He also criticized Shaheen, whom he said has no plan and is trying to “score quick political points by scaring retirees.”

Sununu said the bill would have given workers the choice to invest in the stock market or Treasury bonds. Stocks and bonds would have earned more than Social Security taxes do now, and workers would have been able to keep the money their account earned.

“That’s what Social Security is supposed to be for: not to be spent by the government, but for retirement benefits. That was one of strongest parts of the bill,” he said.

Shaheen spokesman Colin van Ostern said Sununu also backed “obligatory personally-controlled retirement accounts” this year on a National Taxpayers Union questionnaire. “He may try to redefine ‘privatize,’ but he’ll never find a way to redefine the word ‘obligatory,’ ” he said.

The question also specifies that any such bill would protect current benefits for retirees.