Tougher budget issues get attention Shrinking deficit turns president, Congress to Social Security fix


WASHINGTON -- With optimism growing that the federal budget deficit could be eliminated within a year or two, the Clinton administration and Congress are edging toward addressing the nation's longer-term fiscal problems, most notably the looming insolvency of the Social Security system.

White House officials said yesterday that President Clinton wanted to put in place in two years a plan to shore up Social Security, which is otherwise expected to run out of money by about 2030, two decades after the baby boom generation begins retiring in droves.

"The president is clearly sending out the message that passing long-term Social Security reform is something he wants to get done and that its best chances are to actually complete it within the next 18 to 20 months," Gene Sperling, the White House's economic policy adviser, said in an interview.

Clinton and the Republican leadership in Congress are also focusing increasingly, if tentatively, on other long-term issues, such as the soundness of the Medicare system of health insurance for the elderly. Medicare could also go broke within decades because there are more retirees who are living longer and requiring increasingly expensive medical care.

Until now, neither party has been eager to take on the woes of the Social Security program. But Clinton has made no secret of his desire to leave a strengthened pension and retirement system as one of his political legacies. His aides said Clinton had concluded that now is the time to move, before the 2000 presidential race begins and while the federal budget is in its best condition in decades.

The officials said Clinton was studying options to address the problems in the retirement program, as well as strategies for how to deal with the immense political pressures that Republicans and Democrats would face in tackling one of the most emotional and complex issues on the nation's economic agenda.

Among the ideas under consideration at the White House is to use a congressionally mandated conference later this year on how to increase the nation's savings rate as a way to focus attention on Social Security and other pension and retirement programs.

The White House and Congress also continue to discuss creation of a bipartisan commission or a special congressional committee to draft Social Security legislation.

White House aides said Clinton had not yet decided on any specific remedies. His advisers have long been skeptical of proposals that would turn over to individuals the job of investing for their retirements the money that would otherwise go into the Social Security program. And they have shied away from publicly endorsing or rejecting anything else from a menu of politically unappealing options that includes cutting benefits, raising the retirement age or raising taxes.

Clinton has "asked his staff to meet to come up with substantive ideas, and he's currently considering those," said Franklin D. Raines, the White House budget director.

"We're also looking at it procedurally -- how do we go out and engage the American people in the topic and make them understand the importance of preserving Social Security and extending it," Raines said on the NBC program "Meet the Press."

The administration's decision to begin moving ahead on Social Security was welcomed by several influential Republicans. Rep. John R. Kasich of Ohio, the chairman of the House Budget Committee, and Rep. Bill Archer of Texas, the chairman of the Ways and Means Committee, both said the problem would just get worse the longer it went unaddressed.

But Archer said Republicans would be wary if Clinton expected them to make politically painful proposals on their own, especially during the midst of a congressional election this year.

He suggested that Republicans wanted Clinton to make the first move in putting specific solutions on the table.

"The president should propose, he should send up what he believes is an appropriate solution and we should look at it," TC Archer said on ABC's "This Week." "You can't solve these problems without making some very, very tough political decisions."

The emerging debate over Social Security will join an already crowded economic policy agenda for the coming year. With the federal budget deficit all but eliminated and the prospects for a budget surplus in the next year or two improving, the White House and members of Congress from both parties are scrambling to come up with plans for any financial windfall.

Improving the health of Social Security and Medicare, as well as other long-term problems, will therefore become mixed into a broader set of issues this year, some of them of more immediate political interest to both parties. Republicans are pushing for tax cuts. Many Democrats are arguing in favor of increasing spending on education and anti-poverty programs.

Pub Date: 1/05/98

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