WASHINGTON - Action on the Social Security reforms that President Bush promoted so urgently during his campaign last year has been put off indefinitely, the White House conceded yesterday.
The acknowledgement came on the eve of a report from a commission that Bush appointed to suggest ways to shore up the ailing program so it could afford to pay benefits to the vast baby boom generation in coming years.
Ari Fleischer, Bush's spokesman, said yesterday that members of Congress might be reluctant to tackle an explosive issue before the 2002 elections. Fleischer added that "the fact that we now have a recession and a war - that also could change the calendar."
The president has aggressively pushed the idea of allowing younger workers to set up private Social Security investment accounts. Such accounts, Bush has said, would help make the program financially solvent and allow employees to amass more money for retirement. In May, he appointed a 16-member commission to work out the details.
In announcing its findings today, that panel is expected to lay out three proposals for allowing workers to invest a portion of their payroll taxes in stocks and bonds.
Analysts noted that the existence of three proposals could lend political cover to Republicans running campaigns next year. A single recommendation might have forced Republican candidates to take sides on an issue that Democrats often use to attack them.
Still, the proposals require politically unpalatable decisions. Under all three plans, workers who opt for private investment accounts would receive lower guaranteed benefits. One plan would encourage later retirement by cutting benefits for early retirees. Under another plan, guaranteed benefits would grow more slowly.
Supporters of the accounts say that by investing portions of their payroll taxes, workers would likely enjoy higher benefits. They also say the proposals would benefit lower-income workers.
They insist that none of the plans would reduce benefits for older workers who are approaching retirement, which was a pledge Bush made in the campaign. And they note that no one would be forced to set up private accounts.
Advocates also note that by 2016, unless it is overhauled, Social Security would begin running out of money because it would start paying out more than it takes in. By 2038, it would run out of money completely. Democrats are hinting that they plan to make Social Security a campaign issue next year.
Republicans seem in no way eager to engage in serious debate on the topic, even though polls show that Americans generally support private investment accounts.
In the House, Republicans are so squeamish that they might take up a resolution next year that simply puts the House on record as opposing any reduction of Social Security benefits.
"It's just too hot to handle," said Robert D. Reischauer, a former director of the Congressional Budget Office, noting that the Republican edge in the House and the Democratic edge in the Senate are exceedingly slim. "When a party's majority is insecure, they don't look for defining issues."
There was never much prospect of the House taking up a Social Security privatization proposal in an election year. But the likelihood was further diminished by this year's stock market plunge, which emboldened Democrats who say the plan is too risky.
Dwindling budget surpluses also began to bolster Democratic complaints that the government could not afford to maintain benefits to current retirees while beginning to allow younger workers to invest through private accounts.
Last month, Democrats spooked the Republicans by raising Bush's proposal for partial privatization of Social Security as an issue in a special election for what was seen as a safe Republican House seat in Arkansas.
The Democratic candidate came from behind to mount a competitive, though unsuccessful, run against the Republican candidate, John Boozman, after running radio ads charging: "Boozman's risky plan would gamble our Social Security. Wall Street bankers make millions, and Arkansas families could lose everything. On Nov. 20, say no to John Boozman and his risky schemes."
Senate Majority Leader Tom Daschle has attacked the commission's report even before its release, saying it vindicates Democrats who fear that Bush's approach would require benefits to be cut. Daschle has also charged that the commission's plans in no way guarantee the future solvency of Social Security.
An actual reform of the program is all but certain to be put off until 2003 and likely longer, analysts say. Depending on how the public feels about privatization during next year's campaign, Bush would have to decide whether to tackle the issue again before his own re-election bid in 2004.
