A senior Clinton administration official said Friday that the President's proposed U.S.A. Accounts must be structured so that poor people could maintain very low balances.

"In some form or another there would need to be a vehicle to ensure smaller accounts could be done," said Gene Sperling, the President's national economic adviser. Administrative costs would have to be kept down, and the program's impact on private retirement plans would have to be limited, he said.

No decision has been made on whether the program, which would mirror corporate 401(k) plans, would be run by the private sector, government, or some combination of the two, Mr. Sperling said. "We are taking consultations and advice on the best way to administer the accounts," he said.

Speaking at the National Press Club here, Mr. Sperling said the U.S.A. Accounts would cost the government $536 billion over 15 years. The cost is part of the administration's plan to divert 90% of the projected budget surplus for the next 15 years to saving Social Security and Medicare.

Of these funds, the administration proposed investing $580 billion in the stock market for the Social Security fund and earmarking $2.2 trillion in debt reduction for the retirement plan, he said.

Annual equity investments for Social Security would range from 0.25% to 0.33% of the stock market's value, he said. Once the surplus is fully invested, Social Security would control 4% of the market's value, he said. That would be the same percent of the market as Fidelity Investments, Mr. Sperling added.

Between four and six private investment managers would be chosen by competitive bid to administer Social Security's equity investments, he said. They would be permitted to operate only index funds, and no manager would control more than 1% of the market's value. "This should be the most boring job possible," Mr. Sperling said.

The administration predicts that the equity investments would return 6.76% a year on average, which is the market's average gain between 1959 and 1996. That return would be 380 basis points more than the fund makes investing in Treasury securities, he said.

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