Latham contradicts President on privatizing Social Security

One of Iowa’s Republican Congressmen is blasting Democrats for “scaring Iowans” about plans to change the Social Security system. President Bush has promised to “privatize” the system so younger workers may invest a portion of their Social Security taxes on their own. Congressman Tom Latham, though, insists there’s never been any intention to allow investments in the stock market.Latham says the plans call for about two percent of Social Security taxes to be invested in Treasury bills, C-Ds or — in his words — “very conservative” mutual funds. Most mutual funds, however, invest in stocks, but Latham says that’s not going to happen with the Social Security system. He says having someone use their money to “speculate” on the stock market has never been part of the president’s plan.Latham says he’d oppose any attempt to have Social Security tied to the stock market. He says it’s being “demagoged” as privatizing Social Security when that’s never been proposed.Latham’s comments, however, directly contradict the idea advanced by President Bush. The White House website shows Bush believes younger workers should be allowed to invest a portion of their Social Security taxes “in safe private financial markets” as “a balanced portfolio of stocks and bonds can, in the long run, yield almost a five-and-a-half percent real rate of return.”