Sharron Angle on private Social Security: Chile's done it

LAS VEGAS - Republican U.S. Senate candidate Sharron Angle says the nation's Social Security system needs to be privatized, and that it was done before in the South American country of Chile.

Angle referred to Chile at the opening of a campaign office in North Las Vegas while explaining previous statements that the United States should phase out its Social Security system.

"When I said privatize, that's what I meant," she said Thursday.

"I thought we would have to go just to the private sector for a template on how this is supposed to be done," Angle said. "However, I've since been studying, and Chile has done this."

On Friday, the campaign said Angle's comments were misconstrued and she believes the federal government can manage a personalized system in which workers choose their retirement plans.

Angle spokesman Jarrod Agen said she referenced Chile as an example because its system has helped that country's economy - not because it was run privately.

"The majority of workers choose a personal investment system and the country's economic conditions have greatly improved because of it," Agen said.

When created, Chile's pension system required salaried workers to deposit at least 10 percent of their wages into personal accounts managed by private pension funds.

Since 1990, 10 other Latin American countries have adopted what's become known as the "Chilean model," including Argentina, Bolivia and Mexico, according to the U.S. Social Security Administration.

However, the pioneering pension system right-wing dictator Augusto Pinochet established in 1981 is no longer fully private. Reforms in 2008 expanded public pensions for about one-third of the country's work force - people like farmers and others in the country's informal economy who were left behind by private accounts.

Since winning the GOP primary election in June, Angle has wrestled with her rhetoric several times in campaign ads and interviews about the need to change Social Security.

She previously said she didn't trust big government to manage what she called "a broken system without much to recommend it," and she repeatedly has said she supports phasing out Social Security over time. While not offering a detailed plan, she has said seniors now collecting benefits would not be cut off.

Agen said Angle has changed her mind about whether the government can administer Social Security, and now believes it should.

"She wants it to be the most effective for seniors, and there are ways to do that under the public sector as long as the system is personalized," Agen said. "She was under the impression that it could only be done in the private sector but she studied it and realized it could be done in the public sector as well."

A spokesman for Angle's opponent, Senate Majority Leader Harry Reid, said Angle is changing positions to pander to voters.

"Sharron Angle has spent her entire political career advocating for Social Security's complete elimination," Reid spokesman Kelly Steele said. "Now, facing extreme political pressure from tanking poll numbers, Angle's new D.C. handlers will say or do anything to shift the focus and pretend Angle's true beliefs simply don't exist."

On the same day she mentioned Chile, Angle released a new ad about Social Security that doesn't mention privatizing it or phasing it out.

"The real Social Security solutions are to stop Harry Reid from raiding the Social Security trust fund," Angle said in the ad.

"I'd like to save Social Security by locking the lock box, putting the money back into the trust fund so the government can no longer raid our retirement," she says, echoing former Vice President Al Gore's "lock box" comments that earned him ridicule in 2000.

Social Security faces a $5.3 trillion shortfall over the next 75 years and it's projected to run out of money by 2037.

In a statement marking the 75th anniversary of Social Security on Friday, Reid said Republicans would either eliminate the program's benefits, phase them out, or risk them on the stock market.

"I believe that retirement security for Main Street should be guaranteed, not trusted to Wall Street," Reid said.

Chile's pension system was part of Pinochet's broader effort to privatize the country's economy. He assumed power in 1973 after ousting then-president Salvador Allende in a coup. Pinochet remained in control until 1990 and died there in 2006. He was accused of but never stood trial for abuses during his regime.