Newt Gingrich Supports Private Social Security Accounts for Young People

Republican candidate calls for the creation of private Social Security.

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(Reuters) - Republican presidential candidate Newt Gingrich on Monday called for the creation of private Social Security accounts for younger workers as a way to spur economic growth through new investment in stocks and bonds.

The former House of Representatives speaker, now one of the front-runners for the Republican nomination to face President Barack Obama in 2012, outlined his ideas for reform of so-called government entitlement programs at St. Anselm College in Manchester, New Hampshire.

Gingrich said his plan was modeled on that of Chile, which established private pay-as-you go retirement accounts in 1981, and that it would be optional.

"Because it builds up interest over time, the collective value to Americans is enormous," Gingrich said. "You could have some mix of stocks and bonds, it would be your choice."

He estimated that private accounts could yield, on average, 7 percent per year -- a projection many investment advisers would say is optimistic.

Social Security is the U.S. retirement program. How to keep the program from going bankrupt, as the ratio of retirees drawing benefits to workers paying into the fund increases, is a key part of the debate over U.S. financial reform.

Gingrich's standing in the polls among Republican voters has soared in recent weeks, placing him among the leaders. in January, New Hampshire holds the first primary election on the road to the Republican nomination and the second contest overall, after the Iowa caucuses.

[See a collection of political cartoons on the GOP hopefuls.]

Gingrich said after his speech that he was confident that younger workers, who fear they will never see Social Security payouts when they reach retirement, would back his plan.

"I'm not going to go around the country trying to sell it, I'm going to try to get hundreds of thousands of young people on social media to decide that it's their program," he said.

He said a proposal to convert certain federal programs for the poor into block grants to state governments would save enough money to cover a deficit in funds available to pay out to older workers and retirees if younger workers opted out of Social Security.[See editorial cartoons about the GOP.]

Gingrich promised to establish job-retraining programs for "lawyers and bureaucrats" who would be thrown out of work during his presidency because of his proposed tort reform and budget reduction measures. He also promised to teach an online civics class as president.

Though lacking in funds and campaign organization in early voting states such as New Hampshire and Iowa, Gingrich said he expected his rise to continue due to the attention of the news media and because of his debating skills.

"Imagine October of next year, when President Obama's got a billion dollars to spend in trying to smear his opponents, and the only way you can break through is the debates," Gingrich said. "Who would you like to have on the same platform with Obama? And I think at that point a Gingrich candidacy becomes much more plausible."