How Social Security could narrow rich-poor gap

When Congress created the Social Security system in 1935, 8 of 11 people reaching retirement age were not just poor - they were indigent. They had almost no income. Some lived on the street, many with their children. They relied heavily on charity to survive.

Those drafting the Social Security bill wanted to redistribute income to these destitute retirees. They succeeded. Today's seniors are relatively flush.

Now, the income gap between the rich and poor in the United States has gotten wider again. A reformed Social Security could help readjust that balance.

It's unclear whether President Bush's plan will do that. But Social Security could be altered to accomplish that goal, says Robert Shiller, an economist at Yale University. He frets that the growing rich-poor gap "is going to fester eventually. It will be a source of resentment."