A political squall is brewing over how to characterize the possible diversion of some Social Security payroll taxes into personal savings accounts.
While the term "privatization" has been used interchangeably with "personal accounts" by President Bush’s own advisers and other top Republicans and Democrats for nearly seven years, the National Republican Congressional Committee wants the buck to stop here.
Republicans fear that the word, used in conjunction with Social Security, frightens taxpayers, who feel any kind of diversion to capital markets could end up reducing their retirement funds.
Bush says what he proposes is not true privatization because taxpayers would be directing the government to invest some of their savings -- rather than leaving the decisions up to individuals. Democrats, meanwhile, believe that any kind of exposure of retirement funds to the vagaries of the capital markets constitutes privatization.
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