Matheson, Smith far apart on Social Security, taxes
Matheson differs with Gore; Smith agrees with Bush
Beyond the TV ads about Jim Matheson and Derek Smith and on two major issues Social Security reform and tax cuts there are real differences.
"These are difficult issues to explain in sound bites," Matheson, the Democrat in the 2nd Congressional District race, says.
Smith, the Republican, says the two candidates couldn't be further apart. But he admits people sometimes don't seem to understand that fact.
Matheson is opposed to GOP presidential candidate George Bush's proposal to give individuals part of their Social Security investments to put into personal, individual investment accounts.
Matheson does, however, want the pool of Social Security money to be invested into a broad range of "financially secure" investments, including stocks, that would return a much higher rate than the current 2 percent.
Details, such as who would manage the huge investments, would be worked out later, Matheson said, suggesting private-sector investors should be used so government officials weren't investing the money.
Giving some of the Social Security money to individuals is fraught with problems, he says. Not only is having 170 million new and different investment accounts "incredibly inefficient," but people could lose retirement income through poor investments. And that could potentially require increases in Social Security taxes, to which Matheson says he is "absolutely opposed."
Matheson does not support Democratic presidential candidate Al Gore's Social Security plan either.
Smith said he supports Bush's solution. Bush would give individuals 2 percent of the 7 percent of their wages currently taxed into Social Security.
"It would be voluntary, not mandatory. And it wouldn't apply to current Social Security recipients or near-retirees," Smith said. But those in their 30s, 40s and 50s could choose to self-invest.
Yes, there would be some risk. "But even in the times of recession, even depression, the good and bad times on Wall Street, the markets over the last 60 years have returned on average 7 percent a year," Smith said.
"I'm totally opposed to (Matheson's) idea that the federal government would somehow be making these investment decisions," Smith said. He called it "dangerous" to have the federal government take "significant positions" of stock ownership in private corporations. The shear size of such investments "would change the corporate management philosophy," Smith said.
Matheson would like to see the federal deficits paid down first, followed by tax cuts for "working families." He doesn't support Gore's tax cut plan now.
"I think both Gore and Bush are overpromising. They are spending the projected federal surplus way before we actually see it," Matheson said, and promising huge tax cuts at the same time.
He does support doing away with the so-called marriage penalty, under which some married couples pay a higher federal income tax than if they were single and filing separately. And he supports phasing out the inheritance tax.
Rather than spend the surplus and cut taxes to see the federal government "fall into deficit again," Matheson said it is more important to pay down the national debt. The non-Social Security Trust Fund debt could be paid off completely in 10 to 13 years, and Matheson wants to see that process get a good start before any deep tax cuts are given.
Matheson has no specific federal income tax proposal now. "It's too early" in the debt-pay-down game for that, he said.
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