This is a partial transcript of "Special Report With Brit Hume," March 3, 2005, that has been edited for clarity.

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BRIT HUME, HOST: If you look at the polling on Social Security reform (search), one thing that emerges is the clear generational divide and opinions about the idea of private investment accounts within the system. As today’s FOX News poll shows, the president clearly has some work to do overall. But a large majority of young people as you can see, 65 percent favor the idea, while 56 percent of those over 55 oppose it.

So is this a plan that would benefit those under 30 at the expense of those over 55? For answers, we turn to FOX News chief Washington correspondent Jim Angle who has covered this issue closely for years.

Jim, what about that question? Do people over 55 stand to be at a disadvantage or suffer if private accounts are introduced and made a part of the Social Security system, as it is now planned?

JIM ANGLE, FOX NEWS CHIEF WASHINGTON CORRESPONDENT: No. The president has said repeatedly people over 55 will not be touched. They can’t get personal accounts either. Which rankles some because some people would like to get them if you’re 55, for instance, and working until age 66. You would not be able to participate at all. Your benefits would not change one bit.

HUME: Now, does that mean that your benefits would remain on the same schedule? And that the promised benefits are and that when the day when the crunch comes later, fiscal crunch comes later, that you would still continue to get those benefits?

ANGLE: Well, see, that is the question that is left hanging in the air. Everyone knows, everyone on Capitol Hill knows, as Federal Reserve Chairman Greenspan (search) said Wednesday, "benefits are going to have to be cut." There is no way that the system can be sustained because the baby boomers are too large in numbers. And there is no way that there is going to be enough tax money to pay for them, especially when you only have two workers for every person who is retired.

The problem is no one wants to talk about what those steps are. As Congressman Matsui (search) said to some reporters just a week or two before his death, nobody wants to be out front on that. Because other people will hang it around your neck, and they will say aha, you’re the one who wanted to hurt people by cutting their benefits. That is going to have to happen on the Hill, people getting together, talking about it.

HUME: Well, let’s suppose though, you’re a younger worker and you get into the private accounts. And you put money away and invest it with some care. I gather your options are such that you can’t really invest it very aggressively.

ANGLE: Very conservatives options. The president talks about the thrift savings plan on Capitol Hill. It has five options. You’re basically betting on the U.S. economy. One is like an index of the S&P 500. The 500 largest companies in the U.S. You’re betting on the future of the economy, not on specific stocks.

HUME: All right. So and down the road, you begin to reap the returns over time that the stock market promises. Now, are you going to end up better off than the person who invests in government bonds or stays in the current system?

ANGLE: Well, two things. One, let’s say you’re in college now and you’re going to be joining the work force. By the time you retire, benefits will be cut. It’s already in the law. The trust fund will be exhausted. That means the benefits will be cut almost 30 percent. They will be cut more and more as time goes on.

The idea is that personal accounts, built up over 40 years, would cushion you against that and give you a lot of money to fall back on.

HUME: So in other words, you’re going to have to absorb some cuts in the traditional Social Security benefits that are now being paid.

ANGLE: Already in the law.

HUME: But the idea is that these would be offset by the returns in private accounts.

ANGLE: Right. Right, because the return would be higher.

Now, one of the things — of course, there is an argument about risk, and there is risk when you’re investing, even in safe investments. But there is one thing that a lot of people miss. If you’re an individual, you take your money in the private account and you decide I want no risk. I’m taking the money. I’m putting it in a private account. I am investing in Treasury bonds (search), just like the Social Security system does, because I want no risk.

When you retire, you would have exactly the same amount of money you would have if you had stayed in traditional Social Security. The only difference would be the amount in your private account would be owned by you. And you could leave it to your heirs.

HUME: All right. Let’s talk about the politics of this for a minute. The members of Congress, a lot of them Republicans, are nervous about voting for this; for fear obviously they’re going to get hit next year by angry voters. Presumably the angry voters over 55, which seem to be those most resisting this.

What will have happened if this is passed this year and something like the form the president has suggested? He hasn’t laid it out yet but has suggested. What will have happened that would have affected those voters by next year?

ANGLE: Nothing, because the president’s proposal wouldn’t be phased in until 2009. A lot of the other plans would also be phased in later. But Republicans are a little nervous. And they say exactly what the White House says. The president has to sell this idea. He knows he has to sell this idea. As they say in poker tournaments, Bush is all in on personal accounts and fixing Social Security. There is no turning back for him.

So Republicans are waiting to see that he has convinced the public something needs to be done, and then they will fall in line. But there are a lot of politics involved in this. Don’t have any mistake about that — go ahead.

HUME: Jim, thanks. Got to go.

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