GOP forges ahead on Social Security

Goal is vote this summer on overhauling system

April 26, 2005|By William Neikirk | William Neikirk,CHICAGO TRIBUNE

WASHINGTON - The Senate Finance Committee served notice yesterday that the panel will go ahead with plans to vote on a Social Security overhaul plan by June or July, with or without Democratic support.

Aides said the panel would begin by holding a hearing on four Social Security proposals, in hopes that forcing Congress to focus on details of solving Social Security's financial problems will quiet the opposition.

The decision to go ahead with hearings on specific Social Security proposals, with the prospect of an ultimate up-or-down vote, represents a shift by the GOP and the Finance Committee chairman, Republican Sen. Charles E. Grassley of Iowa.

Not only would the new tactic highlight Democratic opposition - Republicans characterize it as obstructionism - but Republicans hoped it would narrow the nature of the debate by putting it in the legislative arena.

Still, the effort is shaping up as a major salvage operation. President Bush's plan to restructure Social Security - by using a portion of workers' payroll taxes to finance personal accounts - has met with strong opposition from Democrats and lukewarm public support.

According to political observers, the proposal appears all but dead. Former Sen. John B. Breaux, a Louisiana Democrat, said the GOP should be looking for an "exit strategy" for overhauling Social Security. Falling stock prices have also undercut support for personal accounts because some of the money in those accounts would be invested in the stock market.

House Democrats have increasingly begun to support new incentives that would allow Americans to increase their retirement savings outside of Social Security - such as in 401(k) plans and Individual Retirement Accounts.

Despite the Senate Finance Committee's hope that hearings could alter the negative mood against Social Security reform, there was no sign that Democrats would bend. They have said they would not negotiate any Social Security solution unless Bush's plan for personal accounts is dropped.

Committee aides said holding a hearing on the four plans would illustrate all the elements that would be required in overhauling Social Security. Members then would have a smorgasbord of options that might not include personal accounts.

Three of the four plans would include Social Security personal accounts along the general lines laid out by Bush, although his plan isn't among them. The fourth, offered by Peter Orszag, a Brookings Institution scholar, and Peter Diamond, a Massachusetts Institute of Technology economist, calls for benefit reductions and tax increases, both linked to life expectancy.

All four proposals would solve the system's future funding problems, the aides said.

The Chicago Tribune is a Tribune Publishing newspaper.

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