Progressive Plan Will Benefit Poor Let People Invest Bush Plan Would Improve Safety Net.

The Social Security benefit President Franklin D. Roosevelt created in 1935 bears little resemblance to the benefits of today. At first, it gave a retired worker a single lump sum payment. Period.

Over the years, benefits expanded. Always, this growth was guided by FDR’s progressive impulse for a financial safety net.

Today, Social Security also supports the disabled. It supports workers’ spouses and children. It features automatic cost-of-living increases. It allows the elderly to receive a pension while working.

The benefit improvements forced the Social Security tax rate to soar. Meanwhile, Americans are living longer and the huge baby boom generation is nearing retirement. Long-term, the number of working Americans will not pay enough in taxes to cover benefits for future retirees.

So, the program must change - again.

The only question is whether the change will be progressive, expanding opportunity and security, and preserving this program’s viability. If not, Social Security must go backward - raising its retirement age, trimming its benefits and raising its tax rate until political support and the program itself both wither.

One popular, progressive reform concept recently became a centerpiece of George W. Bush’s campaign for president: Invite younger workers voluntarily to divert a portion of their Social Security taxes into an investment fund. Polls show workers will jump at the chance, if it’s offered.

But elitists say the poor aren’t capable of making investment choices, even among a set of conservative, government-approved funds. And demagogues focus on short-term market fluctuations or isolated incidents of fraud. In fact, 50 percent of Americans already invest now, using 401ks, IRAs and so on. Those who don’t, the poorest, could benefit greatly if allowed to begin making long-term investments with a fraction of their payroll tax. Since 1802, the stock market’s inflation-adjusted annual rate of return has been 7 percent. That includes severe downturns such as the Great Depression. Long-term investing pays off - especially when investments are continual, during the market’s dips as well as its peaks and plateaus.

The merit of Bush’s proposal hinges on details not yet decided. But the impulse is progressive and the concept is credible. This could strengthen the safety net with higher returns, rather than unraveling it with the fear of higher taxes and dwindling benefits.