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Bush plan cuts Social Security for better-off

TV news conference focuses on revamp

Congress challenged to act

President says U.S. sees `good progress' in Iraq

April 29, 2005|By Julie Hirschfeld Davis | Julie Hirschfeld Davis,SUN NATIONAL STAFF

He reiterated his firm backing for John R. Bolton, his embattled nominee to be ambassador to the United Nations, saying Bolton's brashness and determination to reform the U.N. was just what the institution needed.

"John Bolton's a blunt guy -- sometimes people say I'm a little too blunt," Bush said. "John Bolton can get the job done."

On Social Security, the plan Bush outlined mirrors one offered by economist Robert C. Pozen, a Democrat and former Wall Street executive who served on Bush's 2002 Social Security commission and now chairs Boston-based MFS Investment Management.

It would leave low-income workers' benefits untouched but change the method for calculating wealthier retirees' Social Security payments from one based on wage growth to one tied to price growth, a much slower rate that would effectively slash benefits below what is now promised. Middle-income workers would get benefits based on a combination of wage and price growth, sustaining a smaller benefit cut.

On Capitol Hill, senior Republicans said they welcomed Bush's call to action, promising to begin work on legislation this year.

"I want to take advantage of the environment created by the president's leadership to strengthen Social Security," said Sen. Charles E. Grassley, the Iowa Republican who chairs the Finance Committee, where he plans this summer to try to win approval of a measure.

Analysts said Bush needed a high-profile public appearance to revive his flagging bid to remake Social Security and convince Republicans and the public that he still had a chance to make big changes this term.

"Things have not gone well" with Bush's push to promote a Social Security fix, said former Democratic Rep. Charles W. Stenholm of Texas, who is lobbying for a plan that shores up the program and creates personal accounts for younger workers.

"The ball has almost been taken away from [Bush], and that's unfortunate," said Stenholm, adding that the burden is now on Congress to try to salvage the president's botched effort.

Some analysts said Bush, having begun the year with a boldly ambitious agenda not characteristic of most second-term presidents, has squandered his early window for major action.

"If you think of political capital as a quantity that one can horde or spend, he's wasted an awful lot of it," said Charles Walcott, a political science professor at Virginia Polytechnic Institute and State University in Blacksburg.

Bush's aides positioned the 8 p.m. news conference for maximum advantage. In a rare stumble for Bush's usually media-savvy White House, officials hastily moved up the scheduled time by 30 minutes to ensure live coverage, citing "complications of network programming" when they made the announcement just three hours before the president was to appear.

Last night marked the beginning of the television networks' "May sweeps," the period when they measure audience sizes to determine advertising rates. However, the late change might have caused some viewers to miss the beginning of the news conference.

Bush joked about the snafu near the end of his lengthy news conference, quipping as he prepared to answer the last of his 18 questions: "I don't want to cut into some of these TV shows that are getting ready to air -- for the sake of the economy."

Social Security plan

How it works now: Benefits for all retirees are set based on a formula that takes into account how much money a worker made each year. Earnings from past years are adjusted to current dollars based on the rate at which wages have increased. This is called wage indexing.

How it could change: Adjust past wages to current dollars for higher-income workers based on the rate at which prices, instead of wages, have increased. This is known as price indexing. Benefits for those workers would be lower because prices generally rise more slowly than wages. Lower-income workers' retirement benefits would still be calculated using a wage inflation index.

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