Entitlements: The U.S. came very close to having private retirement accounts as part of a sweeping Social Security reform. And, no, it wasn’t under President George W. Bush, who put forward a workable plan that went nowhere. It was under President Clinton.
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That surprising bit of news comes 18 years after the fact in a reminiscence by Cato Institute senior fellow Jose Pinera, who once upon a time served as Chile’s secretary of labor and social security, and who designed that country’s highly successful pension reforms in 1980. Pinera says that Clinton began thinking in earnest about privatizing part of Social Security back in 1995, after a discussion with former Colorado Gov. Richard Lamm, an ardent advocate for Social Security reform and, like Clinton, a moderate Democrat.
According to Pinera, Clinton saw private accounts as a way to cement his presidential record as a reformer. And the model for doing so that he had in mind was from Chile, where Pinera and a group of reformers created private retirement accounts that helped fuel that nation’s decade-long growth boom. It was a rousing success.
Clinton even sent his former chief of staff, Mack McLarty, to Chile in 1996 to see how private personal accounts worked. In a letter to Pinera, he talked about how impressive Chile’s program was, calling it “the mother of all reforms,” adding: “We can learn a great deal from your country’s bold initiative, which is widely envied throughout the hemisphere.”Read the rest of the story HERE.
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