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MSNBC "The Ed Show" - Transcript

Interview

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We heard seniors have nothing to worry about. When does it change? What`s the age? How would you do it, sir?

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: I referred to it as personal retirement accounts, Ed, because that`s really what it does. One possible cutoff would be age 45. If you are 45 years of age or young e younger, you have the option to take half of your Social Security contribution and put
it in a personal retirement account, handled by a private firm, and you still have to help fund the existing system for those people that are on Social Security or those that are near Social Security.

This is the structure that was used in Chile when they converted from their system. Now I`m not saying that 45 years of age is the exact number. It will be somewhere in that vicinity.

But the idea is you will make more money by investing it in a personal retirement account, based upon some safe investments, in 20 years -- more than you will make if you were contributing to Social Security all the way until you`re age 65.

SCHULTZ: Mr. Cain, I think it`s fair to point out that the Bush administration attempted this starting in January of 2005, after the `04 election. And if we had gone down the road of private accounts, then we
saw the stock market crash. What about that? I mean, wouldn`t this be a risky model, whereas Social Security, the way the government has run it, has never defaulted on a payment to Americans? What about that?

CAIN: No, that -- Ed, I`m sorry. With all due respect, that is not correct. First of all, let me address a couple of questions that you raised. President Bush did propose it, a personal retirement account approach. But, quite frankly, he didn`t do a good job of explaining it to the American people. He didn`t have all of his party members behind him to explain this to the American people.

It was demagogued. And so it died.

Now this isn`t about turning people loose investing in the stock market. No. Just like 401(k) plans work in companies, people are given some conservative options that they can select where it will grow. Right
now when people put money into the Social Security fund, it doesn`t grow. It disappears.

So there`s a big difference between that. So you`re not turning people loose on the stock market. You have some very conservative guidelines to make sure that over the long haul they, in fact, will have
money when they retire.

SCHULTZ: OK. Well, what about Social Security, how it has performed since the day it was put in place some 70 years ago? It is secure. And for the next 25 years, it`s going to be secure. And some are out there
saying that all you have to do is raise the cap and that will take enough money to carry us another 75 years. What would be wrong with that?

CAIN: Well, Ed, what`s wrong with that is that, number one, Social Security is not sustainable. I don`t -- even though you say we can go for another 25 years, you`re still not fixing the problem. I believe in fixing
the problem.

Secondly, if we fix the problem with the personal retirement account approach, like I have described, like they use in Galveston, Texas, like they use in Chile, this is going to help people have more money when they retire.

So I don`t agree with that. Secondly, the Social Security Fund has been raided for years . And so they --

SCHULTZ: they borrowed against --

CAIN: -- they borrowed against it.

SCHULTZ: That`s what they`ve done.

CAIN: With no intention -- with no intention of putting the money back. It`s not sustainable the way it is, which is why I believe we should restructure it.

SCHULTZ: All right. Mr. Cain, good to have you with us tonight. I appreciate your time. Thanks so much. More debate coverage is coming up.

CAIN: Thank you, Ed.

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