Charles Krupa, Associated Press
MANCHESTER, N.H. — Republican presidential contender Newt Gingrich is telling college students that he would let them use their payroll taxes to fund private retirement accounts instead of putting the money into Social Security, if they want to.
Younger workers could also opt to stay in the Social Security system.
Gingrich says his proposal would let those workers decide what to do with their money and how to save for retirement.
He says private accounts are likely to perform better than Social Security, even in grim economic times.
Stocks had plunged several hundred points by midday as a special committee in Washington appeared ready to declare failure in its attempt to agree on trimming the federal budget deficit.
The former House speaker outlined his proposal in a speech Monday in New Hampshire.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
Republican presidential contender Newt Gingrich wants to give younger workers the option to choose private retirement accounts as an alternative to Social Security.
"It would be a voluntary choice. Keep the current system if you want to, or have a savings account," Gingrich said Monday at Rivier College in Nashua.
The former House speaker, who has been rising in the polls, planned to elaborate on the plan in a lunchtime speech to students at St. Anselm College.
He says he wants younger workers to have another option and to end the expectation that Social Security is the only safety net for retirement.
Gingrich's plan also would let the markets determine how much money workers who choose private accounts would get each month while guaranteeing a minimum income in case Wall Street collapses like it did in 2008.
His aides did not immediately provide a price tag for the proposal. But Gingrich predicted during a breakfast meeting with business leaders in Nashua that his program "would save literally trillions over the next generation."
He said the plan would reduce the inequality between workers who paid into Social Security as their sole retirement account and higher-income workers who benefit from private funds.
"We can offer a better deal for all Americans at a lower cost," Gingrich said in a 49-page policy outline.
Under the plan, the federal government would regulate the personal accounts run by private firms to ensure the portfolios were diversified so one company or sector couldn't take down the entire system. Government approved firms then would compete for consumers, who could move their money among accounts based on the funds' performance.
Organized labor and advocacy groups such as AARP would be allowed to collaborate with the investment firms to tailor plans to reflect the promises they make in pension plans.
President George W. Bush offered some similar proposals for Social Security soon after winning re-election in 2004, but ran into stiff resistance from Democrats and some within his own party about proposing changes to the popular program.
In recent weeks, Gingrich has seen his fortunes rise as he tries to position himself as the leading alternative to former Massachusetts Gov. Mitt Romney just six weeks before Iowa's leadoff presidential caucuses.
In New Hampshire, Gingrich also planned to renew his call for returning control of welfare programs to the states, as well as offering states alternatives to Medicare and introducing private options for the government health care program for seniors.
His plan would allow seniors now in Medicare to stay, but others would be eligible for subsidies to pay for traditional insurance coverage.
"Unleashing competition will dramatically increase options for American seniors, while also lowering costs," he said.
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