The Candidates Face the Baby Boomers

The President elected in November, 2008, will take office at a critical moment for national policy decisions that affect your retirement

by Ellen Hoffman

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During the next President's term, baby boomers will begin to retire in earnest. The U.S. Census has predicted that between 2000 and 2010, the number of Americans age 45 to 64 will increase from 62.4 million to 81 million; and those age 65 to 84, from 30.7 million to 34.1 million.

As Americans retire in greater numbers, without some new policy decisions to reverse current trends, the fiscal health of Social Security and Medicare are likely to decline. The costs of chronic and nursing home care increasingly will exceed the ability of the middle class to pay for them, and as the first of the 401(k) generation retire, more and more boomers will confront the reality that they have not saved enough for the retirement they've dreamed about. (For a good overview, see America's Fiscal Future and Retirement Security, by the Government Accountability Office.)

So what do the Presidential candidates have to say about retirement issues? To find out, I scanned eight candidates' position papers and statements and attempted—sometimes without success—to get more information from their campaign staffs. The candidates were the five Republicans and three Democrats who have pretty consistently garnered support of 10% or more in national polls: Democrats Senator Hillary Clinton (N.Y.), former Senator John Edwards (N.C.), and Senator Barack Obama (Ill.); and Republicans, former New York Mayor Rudy Giuliani, former Arkansas Governor Mike Huckabee, Senator John McCain (Ariz.), former Massachusetts Governor Mitt Romney, and former Senator Fred Thompson (Tenn.).

Social Security at the Forefront

Each of the candidates has made some public statement on Social Security and Medicare reform, and several have proposed measures to improve long-term care options and financing. Beyond those issues, the three Democrats have proposed multi-issue retirement platforms. Edwards' 11-point Declaration of Independence for Older Americans includes proposals to address elder abuse and promote creation of "livable communities" for retirees. Obama's Helping America's Seniors includes proposals to encourage retirees to volunteer and protects seniors against financial fraud. Clinton has also released what amounts to a retirement agenda, although her proposals are not bundled into one document.

Social Security, which is expected to start paying out more than it receives in 2017, has attracted the most attention, but few new proposals. Most of the candidates support a "bipartisan process" to seek solutions, and some, including Edwards and McCain, specifically endorse creation of a commission such as the one headed by Alan Greenspan in 1981 to come up with suggestions for reform. Giuliani, Romney, and McCain endorse private accounts, while the three Democrats oppose them. Thompson has outlined a plan to let workers contribute 2% of their wages into private investment accounts and receive a 2.5% employer match.

Huckabee claims his proposal to replace the current income and tax system, including the payroll tax, with a 23% sales tax would solve the financing problem. For people with other resources "who don't need Social Security for the long term," he also suggests the government offer "the option of a one-time buyout, or the opportunity to purchase an annuity" with their Social Security funds, which he says would relieve the long-term pressure on the system.