Dec. 21, 2004 -- -- Americans show less interest than planners have predicted in participating in a stock market option for Social Security investments, raising questions about whether the program would work as effectively as its proponents suggest.
A new ABC News/Washington Post poll indicates the option also faces other, earlier hurdles: Support for the plan drops sharply if it means the government would have to borrow up to $2 trillion to finance the changeover, as authorities have estimated. And just a quarter of Americans agree with President Bush's portrayal of the Social Security system as in crisis -- making it more difficult to raise support for fundamental change.
The poll finds 53 percent of Americans do support a voluntary stock market option for Social Security, a number that's held steady since 2001 after slipping when the market bubble burst. But if it means $2 trillion in borrowing, support drops by more than half, to 24 percent.
Moreover, 62 percent say that if such a program did exist, they wouldn't participate in it. That leaves 37 percent who say they would put some of their Social Security money into the stock market -- far below the 67 percent participation planners have anticipated.
Among the minority who say they would participate, eight in 10 say they'd invest "some" or a "just a little" of their Social Security funds in the market. Just 19 percent say they'd put in all or most of their available assets.
Intended participation in a stock market option is highest among wealthier and better-educated adults and peaks in particular among Republican men; 64 percent say they'd put some Social Security money in the market, compared with 46 percent of Republican women and just about a quarter of Democrats, men or women.
Sampling, data collection and tabulation for this poll were done by TNS.
Even among younger Americans, who are least confident in receiving their full Social Security benefits, fewer than half say they'd participate in a stock market option.
One likely reason for the low intended participation is that in the past, most Americans have viewed the stock market as a "risky" investment -- as low as 52 percent during the last market bubble, but as high as 80 percent after that bubble burst.
Analysts have suggested that one means of encouraging participation would be to include a stick along with the carrot -- effectively cutting benefits for those who remain with the current system by tying future benefit increases to inflation, rather than to wages. But this poll raises questions as to whether even that would work, since people who do not expect to receive their full benefits from Social Security are no more likely to say they'd invest in the market than those who do expect a full payout of their benefits.
Participation rates are hypothetical because the specifics of the plan are far from set -- Bush said Monday he would detail his proposal "at the appropriate time." But the results of this survey suggest substantial tasks for the administration: one, getting most people to support its plan in the face of its price tag; another, then getting more than a minority actually to participate, and to do so to a significant extent.
Bush thus far shows little traction on the issue: Americans disapprove of his handling of Social Security by 52 percent to 38 percent, very close to his career worst, 55 percent to 38 percent disapproval last March.
As noted, the administration also faces a challenge in simply getting the public to share its sense of urgency about Social Security. Bush declared last week, "The crisis is now." In this poll, however, just 25 percent say Social Security is in crisis, actually down from 34 percent in an ABC/Post poll in 1998.
Another 49 percent, though, do say the system has "major problems," adding up to a net negative diagnosis from 74 percent of the public.
Crisis or not, there is broad agreement about a coming shortfall: Americans by 2-1, 63 percent to 32 percent, don't think Social Security will have enough money to pay the full benefits to which they're entitled when they retire. This skepticism, which has fluctuated, has been even higher, 73 percent in the mid-1990s.
Doubts about the system, unsurprisingly, are age-based; young people are vastly less likely than their elders to think Social Security will last long enough to pay their full benefits. Just 7 percent of those under 30 expect their full benefits, compared with 59 percent of those 65 and older.
It follows that a voluntary stock market option wins the most support from young adults, at 67 percent, along with nearly six in 10 people age 30 to 49. That falls to 46 percent support among late middle-agers, and drops further, to 30 percent, among seniors.
This support falls sharply across age groups, however, if it means as much as $2 trillion in borrowing, to be paid back in time through cost savings from the current system.
In one conundrum, while young adults are least confident in obtaining full benefits, they're are also much less apt than those age 30 to 64 to say the system is in crisis. That suggests they're making other plans for retirement, hoping for a solution before they get there -- or, most likely, just not yet focusing on their retirement years.
In addition to being more likely to participate in a stock market option, Republicans (and independents who lean toward the Republican Party) are more apt to support the plan: 71 percent do so, compared with 41 percent of Democrats. Again, though, if it means borrowing $2 trillion, support drops sharply in both groups -- to 39 percent of Republicans and 15 percent of Democrats.
This ABC News/Washington Post poll was conducted by telephone Dec. 16-19 among a random national sample of 1,004 adults. The results have a three-point error margin. Sampling, data collection and tabulation were conducted by TNS of Horsham, Pa.
You can find more ABC News polls in our Poll Vault.