BY PATRICK CROWLEY
The Cincinnati Enquirer
COVINGTON -- When local attorney Pat Flannery received his first Social Security check four years ago, he toasted the man responsible.
"I lifted my glass and said, "God bless Frank D. Roosevelt,' " Mr. Flannery, 69, said in reference to the nation's 32nd president.
A couple of generations removed from Mr. Flannery, some Northern Kentucky twenty-somethings are convinced they'll never share Mr. Flannery's toast.
"I don't expect Social Security to be around when I retire," Andrew Cowan, 27, of Latonia, said matter-of-factly. "It's been run into the ground, and I'll have to depend on myself and my employer to provide for me in retirement."
It was during the Great Depression that FDR came up with Social Security as a financial safety net for the retired and disabled as well as for those who lost a bread-winning spouse or father through death.
Six decades later Congress is struggling to come up with a way to keep the fund solvent.
It's become an issue in the two congressional races Northern Kentuckians will decide this November:
The 4th District congressional race between Republican state Sen. Gex "Jay" Williams of Verona and Boone County Judge-executive Ken Lucas of Richwood, a Democrat.
Kentucky's U.S. Senate race between Republican U.S. Rep. Jim Bunning of Southgate and U.S. Rep. Scotty Baesler, a Lexington Democrat.
Social Security is expected to experience serious funding problems around 2011, when many baby boomers begin to leave the work force. "I've seen a poll that showed more young people believe in UFOs than think they'll see Social Security benefits," Mr. Lucas said on the campaign trail.
"This isn't right. Although Social Security is solvent today, it is projected to become insolvent in 2023. We need to do all we can to shore up the system," he said.
As chairman of the Social Security subcommittee of the House Ways and Means Committee, Mr. Bunning has conducted a dozen congressional hearings in recent months on the solvency of Social Security.
A vote on the plan to "save" Social Security is not expected until next year.
But Mr. Bunning, among others in Washington, advocates a plan to allow people paying into Social Security to decide how at least a portion of the money should be invested.
He compares the proposed system to 401(k) plans that private employers offer workers. Under those plans, employees have a variety of options -- including stocks and bonds -- to invest their retirement money. The options are varied and range from conservative to more aggressive -- and ultimately more risky -- in their approach to investing. "The average return of Social Security now is about 1 percent a year," Mr. Bunning said. "Individuals can do better than that." The growth of 401(k) plans, the amount of investment information available to consumers and what appears to be the public's increased understanding of the stock market makes the new Social Security plan attractive, advocates such as Mr. Bunning say.
Unlike in generations past, people now see how investing in the stock market over a long period of time can pay off.
"You look at a company like (Procter & Gamble) in Cincinnati," said Mr. Bunning, a former stock broker and longtime investor. "You have people who have been working there and buying stock for years, and janitors are retiring millionaires because of compound interest and the growth of the stock," Mr. Bunning said.
Mr. Cowan is a constituent who likes the approach Mr. Bunning is taking.
"I'd like to do it, to invest my own Social Security money instead of having the government do it for me," said Mr. Cowan, a salesman at Wiseway, a chain of building supply stores based in Florence. Mr. Cowan invests a portion of his salary not only in Wiseway's 401(k) plan but also in an individual retirement account, or IRA, which is also an investment fund for retirement.
"I don't think Social Security will be around for me unless it is changed, so I put money away so I can have the money I'll need to retire."
However, he does think Social Security "has a good chance to survive" if the growth of the fund is tied to the stock market rather than more money being paid into it.
But Mr. Flannery disagrees that Social Security will become insolvent.
"That's outrageous," the attorney said. "The first time I heard that was in 1936, when Social Security first started. It's not going to go bankrupt, not in the richest country in the world." Still, Mr. Flannery does think there is some merit to investing some Social Security money in the stock market, "as long as there isn't a risk for somebody to lose their life's savings."
That fear makes the two Democratic congressional candidates more cautious about putting Social Security money in the stock market.
They point out that while the stock market seems to set records every week, sooner or later it's going to slide.
"Although we should explore possibilities to improve the earning potential of Social Security and allow individuals to enjoy the benefits of a growing economy, we should not undertake any plans that would shatter the foundation of the current system," said Mr. Lucas, a financial planner.
"We need to ensure that the reform is sensible and gradual . . . and prevent wholesale privatization and replacement of the current system."
Mr. Williams, who has also worked as a financial planner, said he likes the idea of people making their own decisions.
"As long as we can put together a plan without impacting any of the benefits senior citizens are receiving now, I think we should look at" the investment accounts.
"One of the problems is that people are going to pick winners, but they are also going to pick losers in the market," Mr. Williams said. "But this country was founded on the individual making decisions, and eventually I think people could accept a new way."
Mr. Baesler said Social Security has to be maintained "as the safety net it was designed as."
He, too, thinks there is some merit to the private investment accounts, but he thinks it would ultimately be a tough sell to the public.
"How do you reconcile when somebody's stock picks are doing well, and somebody else's didn't do too well," Mr. Baesler said. "Some people are going to making less money, and those that do aren't going to be happy."
