David Vanderscoff and David Schum could become the first pension consultants in Congress if they win their party's nominations and their November races.
Both are Republicans who want to cut government regulations and red tape they say have put traditional pension plans on the endangered species list.
Mr. Vanderscoff, a pension actuary with his own firm in Bismarck, N.D., has emerged as the front-runner challenger to Democratic Sen. Kent Conrad. While his speeches focus on the urgency of reducing the nation's financial problems and shaving taxes to spur investments in research and development, Mr. Vanderscoff also underscores the need for cutting regulations that have stifled traditional pension plans.
"We should be doing things to stimulate the growth of defined benefit plans. I would seek input from actuaries and pension plan (administrators) as to what laws and regulations should be eliminated," he says.
Mr. Vanderscoff plans to reach out to pension groups and lobbyists for support in his campaign.
As of now, he says, he is not quite halfway to his fund-raising goal: he estimates he needs $1.5 million to win. But he has made several trips to Washington to court party leaders, including Senate Minority Leader Bob Dole and Sen. Phil Gramm of Texas. He also is talking to former Housing and Urban Development Secretary Jack Kemp, a possible contender in the 1996 presidential race, and Bill Kristol, chief of staff to former Vice President Dan Quayle.
A 1966 mathematics graduate from the Massachusetts Institute of Technology, and a former insurance industry actuary, Mr. Vanderscoff also has met with representatives of special interest groups in insurance, actuarial science, small business and the U.S. Chamber of Commerce.
"I'm getting a good reception outside the state," he says.
Mr. Vanderscoff says Sen. Conrad has broken his 1986 campaign promise of not running for re-election if he didn't cut the U.S. budget deficit. "In fact, the deficit almost doubled from $150 billion to nearly $300 billion. And Kent Conrad still sits in the U.S. Senate," Mr. Vanderscoff said in a speech announcing his candidacy last August.
Sen. Conrad - who had announced plans in 1992 to leave politics in keeping with his campaign promise - re-entered the fray later that year, winning a special election with 64% of the votes cast.
While Sen. Conrad "takes an election challenge seriously," says his aide Laurie Boeder, "he is in good shape .*.*. and considered to be among the strongest of the Senate incumbents."
Meanwhile, overhauling the U.S. tax system and phasing out the Social Security program are top priorities for the 43-year-old Mr. Schum, a Dallas pension consultant, whose defined benefit plan design and administration business virtually dried up after tax law changes in the mid-1980s. An Internal Revenue Service challenge of interest rates used by Mr. Schum's last remaining defined benefit pension plan client killed that business a few years ago.
"We have to get rid of the entire Internal Revenue Code," says Mr. Schum, a 1972 business administration graduate from Southern Methodist University. If he gets his way, he would like to replace the income tax system with a 30% national sales tax on all purchases. Over time, the tax rate would decline as the tax base grows and Social Security is phased out, he says in campaign literature.
His system would encourage savings, he says, because consumers would pay taxes only on what they spend.
Mr. Schum also attacks Social Security, and would like to phase out the Social Security system by reducing benefits to new retirees by 5% a year over a 20-year period. During that period, Social Security benefits would be financed with the national sales tax, he says in papers highlighting his views.
As evidence that others have similar views, Mr. Schum includes, with his campaign literature, speeches by former IRS Commissioner Shirley D. Peterson, calling for replacing the current income tax system with some form of a consumption tax.
But Mr. Schum faces a tough fight against Rep. Sam Johnson, also a Republican.
For one thing, Mr. Schum, who says he doesn't accept money from special interest groups, has raised only about $10,000 so far, and the Republican primary is less than two months away. No Democrats are running.
For another, Mr. Johnson, who won a special election in May 1991, garnered 86.7% of the vote in the 1992 Republican primary and received 86% of the votes cast in November 1992.
None of this deters Mr. Schum, who says it is hard to find people who don't agree with his views.
And an aide to Mr. Johnson says he "welcomes the challenge because it is part of the democratic process, and we will be able to debate the tax and budget process."