Camera-ready, Obama talks savings

Michael J. Mishak

Tuesday, Dec. 11, 2007 | 7:05 a.m.

Sen. Barack Obama flew in and out of town Monday to talk about retirement security, on the heels of a series of polls showing him within striking distance of Sen. Hillary Clinton in the four early voting states - including Nevada, where Clinton had enjoyed a comfortable double-digit lead in statewide surveys all year.

Leading a roundtable discussion with six Las Vegas-area residents, Obama detailed his plan, which includes raising taxes on the wealthy to strengthen Social Security's long-term solvency, instituting mandatory employer-sponsored pensions and establishing incentives for Americans to save more money.

The event, held at the Flamingo branch of the Clark County Library, was typical of the well-orchestrated environments the top campaigns are creating in the stretch run: tightly scripted while seeming spontaneous. Obama sat at the center of a semicircle to allow for optimal TV camera shots, and though the participants seemed casual and relaxed, it was cordoned off with velvet ropes like a line for a Las Vegas nightclub, separating the "real people" from the media horde.

As Obama entered the room he greeted the throng of reporters behind the rope line. Taking his place at the table, he checked his microphone as a half-dozen television cameras looked on. "How's it sound?" he asked technicians. "Good?"

From there, he launched into policy.

Attacked by the left wing of the Democratic Party for saying the Social Security system is in crisis, Obama has shifted course.

On Monday, he said the system was "structurally sound" and "not in a complete crisis," but that reform was needed to cope with a wave of retiring Baby Boomers. He proposes raising the cap on earnings subjected to Social Security payroll taxes. The payroll tax now applies only to the first $97,500 a worker makes.

"If people make more they can pay a little more," Obama said.

By contrast, Clinton called Obama's idea a "$1 trillion tax increase" and dubbed Social Security reform a "phony issue" in an interview with The Des Moines Register last week. She told the newspaper that addressing Social Security in the campaign is "like writing ads for the Republicans in the general election." Clinton's attack on Obama on the tax issue, however, is not unlike typical Republican campaign strategy, past and present.

Clinton has focused on overall fiscal responsibility in government and has proposed appointing a bipartisan commission to examine the entitlement program's funding shortfall.

On pensions, Obama would require employers who do not offer retirement plans to enroll their employees in a direct-deposit IRA account. Under the proposal, employers would receive tax credits to defer the cost of establishing the plans. Obama noted that just 33 percent of workers in Nevada participate in employer-sponsored pension plans.

Clinton has proposed tax credits for retirement savings as well as what she calls an American Retirement Account for those without an employer-sponsored pension. The account would allow individuals to contribute up to $5,000 per year on a tax-deferred basis. The first $1,000 contributed would be eligible for government matches, she proposes.

Obama has proposed promoting personal savings by expanding an existing tax credit to match 50 percent of the first $1,000 of yearly savings for families making less than $75,000. The match, he said, would be automatically deposited into designated personal accounts.

The Obama and Clinton campaigns are to begin airing television ads in Nevada today - becoming the first two to do so this year.

For his part, former North Carolina Sen. John Edwards has proposed creating "work bonds" to help low-income families save up to $500 a year, subsidizing banks to offer free savings accounts and giving taxpayers the option of directly depositing their tax refunds into a retirement account. Edwards has also proposed giving more than 20 million families up to a dollar-for-dollar match on their retirement savings and raising the capital gains rate to 28 percent for families making more than $250,000 a year.

After outlining his policy, Obama engaged each of the six roundtable participants, aged 30 to 70, using their stories to highlight his positions on a number of other issues, including health care, education and the subprime mortgage crisis, which has hit Nevada harder than any other state. He even scored points with the 60,000-member Culinary Union during an exchange with union member George Hicks and his wife, Norma.

"Culinary does a great job of organizing its workers and helping workers make more than they would normally make," Obama said.

The event ended, appropriately, with a group photo.

Sun reporter J. Patrick Coolican contributed to this report.