The aides tried to soothe voters concerned about the bankruptcies, takeovers and bailouts on Wall Street by declaring McCain favored only the option of such accounts, just for younger workers, and most likely in a conservative investment vehicle such as bonds.
Private accounts for Social Security are "always an easier sell when the markets are going up instead of going down," said David Wyss, chief economist at Standard & Poor's. "I don't think this is a good week to sell that one politically, but you're looking at the long term here. You're investing your retirement funds for 20 or 30 years down the road."
A headline Friday in the Manchester, N.H., Union Leader, the leading paper in that battleground state, underscored the political challenge. "Pension funds for workers take a hit," read a story about a roughly $500 million decline the past three months in the state's public pension fund.
Democrat Barack Obama opposes the accounts and has warned they could be a precursor to eliminating the government entitlement program. Obama has begun airing an ad in Florida, Pennsylvania, Michigan and some selected other markets that brands McCain as an ally of President Bush in efforts to "privatize" Social Security.
Critics also note that one of McCain's top economic advisers is former Texas Sen. Phil Gramm, a free-marketeer who pushed the idea of a privatized retirement system as far back as 1988.
Obama, a senator from Illinois, has suggested shoring up the program by imposing a Social Security tax of no more than 4 percent on earnings above $250,000; currently, only the first $102,000 in income is subject to the tax. Income in the "doughnut hole" between those figures would not be taxed.
McCain calls such a tax punitive and counterproductive. He also says refusing to discuss private accounts amounts to political posturing. He says his willingness to broach the subject is emblematic of his "Country First" campaign motto and harkens back to bipartisan discussions between President Reagan and Democratic House Speaker Tip O'Neill Jr. the last time the system was revamped in 1983.
"We have to have some straight talk for America. The Social Security system is going to go broke. It will not be there for present day men and women who are working. And we have to fix it and we have to do it in a bipartisan fashion," the Arizona senator said Wednesday during a town hall meeting with running mate Sarah Palin in Grand Rapids, Mich.
He added: "We have to realize that the worst thing we can do is continue to allow these unfunded debts to mount, and to pass on to another generation of Americans a burden that we've imposed on them."
McCain aides bristle at talk of "privatizing" the Social Security system.
"He's not ever talked about outsourcing Social Security into the private sector," senior adviser Steve Schmidt told reporters Thursday. "What people talk about with regard to personal accounts is giving the American people an ability to have a greater return on an investment - it could be bond funds, for example."
Wyss, the Standard & Poor's economist, said the concept of supplemental private accounts is valid, but there are so many variables in constructing them it makes discussion difficult. He also warns that it's too late to make changes for the Baby Boom generation, which has begun retiring. That is reducing the number of workers paying into the system at the same time there is an increase in benefits being paid out.
By about 2020, more people will be drawing on the system than will be paying into it, and the government projects Social Security could be insolvent around 2040. Those projections change slightly each year.
"I think it's a good idea, but again, it doesn't solve the immediate problem," said Wyss. "And you also have to make sure you maintain an adequate safety net because you don't want people eating cat food in retirement."
Obama's new ad displays headlines about plummeting stock prices, shows McCain with Bush and states that he voted three times in favor of privatizing Social Security. It claims McCain supports cutting Social Security benefits in half and of "risking Social Security on the stock market."
While McCain has supported personal accounts, the votes cited in the ad are not specifically on Bush's proposal. One, in 2006, was a budget amendment that called vaguely for Social Security reform, and the other two were in 1998, before Bush was president, that supported the creation of Social Security personal accounts.
The reference to cutting benefits by 50 percent is not related to Bush's personal accounts proposal and also is only partially correct. The figure is an estimate based on Bush's desire to shift Social Security benefits from a wage-based inflation index to a lower, price-based index. Studies by independent analysts, including the nonpartisan Congressional Research Service, concluded that the new formulation could result in a 50 percent lower benefit for persons who retire in 2080. Persons who retire in 2030 could see a benefit cut of 17 percent, according to that study.
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Associated Press writer Jim Kuhnhenn contributed to this story.
