Selling Skeptical Gen-Xers on Social Security

Ask a college student today about plans for retirement, and you're likely to get a quizzical stare.

What, me retire? Some think they can just work forever. Some are sure they'll make millions. Relying on Uncle Sam often isn't part of the equation. And in the eyes of many, the US government's retirement fund - Social Security - just won't be there for them when old age sets in.

"The baby boomers are going to use it all up by the time we get there," says Margaret Miller, a student at The American University here, echoing the view of many Generation Xers.

So when President Clinton addressed college students this week about looming shortfalls in Social Security - his first major comments on the matter since his State of the Union address - he was targeting his most remote audience. "The fiscal crisis in Social Security affects every generation," Mr. Clinton reminded the students at Georgetown University.

The question is: Will the president find it difficult to incorporate young adults into the kind of national consensus he wants to craft by next year, when he hopes to enact long-term legislation that will make the system solvent? And does it matter?

Some evidence suggests Clinton faces a generation gap in views over what to do about Social Security, which will begin to run short of funds in the year 2029. Richard Thau, executive director of the Generation X advocacy group Third Millennium, cites a survey his group took 3-1/2 years ago that showed young people much more likely than seniors to support at least some privatization of Social Security.

Among people age 18 to 34 (the rough boundaries of Generation X), 82 percent said they would favor allowing workers to redirect at least a portion of their FICA, or Social Security, taxes into a private account that they would own and control. Among people age 65 and over, less than 50 percent supported that option. Though no surveys have come out since confirming this gap, Mr. Thau believes it still holds.

Evelyn Morton, a lobbyist for the American Association of Retired Persons (AARP), agrees there probably is a difference in views. "Older Americans have lived through the stock market downturns, and they get nervous about investing in the market," she says. "If you're younger, and you've seen a market that has looked pretty good in the past 10 to 15 years, it sounds wonderful."

OBSERVERS disagree on how this gap will play out during the just-launched "national discussion" on Social Security. Thau, of the New York-based Third Millennium, predicts a deafening silence from Gen-Xers. "You're not going to see hundreds of thousands of phone calls from younger people showering Washington, and congressional offices and the White House," he says. "They're disengaged. This is a pointless conversation for most of them."

Still, a major new survey called Americans Discuss Social Security has found that nearly 8 in 10 Americans - across all age groups - believe that Social Security is either "very important" or "somewhat important" to them personally. Results of the group's survey on how people want the system fixed are not yet complete, but the first survey seems to suggest that young people do care about the future of the system.

Rep. Mark Sanford (R) of South Carolina, who has conducted town meetings on Social Security, agrees that young adults care. "What we're hearing from young people is general Social Security angst, and what we're hearing from older folks is, 'You politicians quit talking about it and do something,' " he says.

As for confidence in Social Security's long-term viability, there has long been an age gap: For decades, the young have been skeptical that benefits would be there for them by the time they retire. As people age, they tend to gain confidence in the system. And in recent years, politicians' statements about the "crisis" in Social Security have likely heightened the young's lack of confidence, say observers.

John Rother, AARP's top lobbyist, believes today's youthful skepticism is part of a larger societal trend. "I think it's true that as a country we're more skeptical today about the future and about large institutions in particular than we were maybe 30 years ago," he says. "But apart from that, I think we're finding this skepticism and lack of confidence has always been there with young people... That's why reaching younger people is a challenge."

Rother notes that there's a clear divide along gender and income lines over how to fix Social Security: Better-off males are more inclined to want to invest the money themselves, rather than leave it to the government, while women are much more skeptical of private alternatives to Social Security. Not surprisingly, high-income Americans are also more confident in their ability to invest than lower-income people.

The "national discussion" on Social Security moves to center stage on April 7 in Kansas City, Mo., when the first of four regional town meetings will take place. The White House will hold a conference on it in December.

Clinton's idea, for now, is to use federal surpluses - projected at about $200 billion over five years - to pay down the $5.5 trillion federal debt, until the Social Security issue has been resolved.

Even if young adults don't emerge as major proponents for at least some privatization of Social Security, that point of view will be - and has already been - well-represented in the debate. Last year, when a national Social Security advisory council announced its findings, two out of three factions favored a radical privatization plan that would require workers to invest in funds similar to a 401(k). The other plan also included investment in private securities, but would have the government doing the investing, not individuals.