Fight over Social Security intensifies on Capitol Hill

GOP pledges overhaul, while Democrats harden bitter opposition to effort

April 30, 2005|By Julie Hirschfeld Davis | Julie Hirschfeld Davis,SUN NATIONAL STAFF

WASHINGTON - President Bush's plan to remake Social Security with lower benefits and private investment accounts collided with political reality on Capitol Hill yesterday, as Republicans promised to push through an overhaul this year and Democrats hardened their bitter opposition to the effort.

Congressional Republicans praised Bush for tackling the issue and said they would begin crafting legislation this spring to shore up the program and allow younger workers to steer some of their payroll taxes into private investment accounts. But in a sign of how politically dicey cutting the government retirement program will be, even for Republicans, few of them came out yesterday in support of such reductions.

Still, Bush and party officials began a campaign to paint Democrats, who say they are dead set against benefit cuts and diverting payroll taxes into personal accounts, as spoilers unwilling to act on a pressing national problem.

Opponents should not "play politics as usual" with his plan, Bush told an audience in Falls Church, Va., as House Republicans on Capitol Hill announced plans to begin hearings in two weeks on a broad overhaul.

"Those who block meaningful reform are going to be held to account in the polls," Bush said.

Democrats and liberal groups, armed with calculations about what they called the devastating effects of Bush's proposals, accused the president of plotting to slash future benefits for middle-class workers almost to nothing. They reiterated their longstanding opposition to the idea of creating personal accounts financed by payroll taxes, which they say will weaken the program by chipping away at the promise of a guaranteed benefit.

They also criticized Bush's idea of cutting future benefits on a sliding scale - with low-income workers seeing no change, middle-income workers seeing some reductions and the wealthiest sustaining the hardest hit - saying it would transform Social Security into a welfare program.

"We're going to essentially slug it out with the president and with Republicans who want to turn Social Security into a poverty program," Rep. Sander M. Levin, a Michigan Democrat, said during a conference call with reporters.

Even some senior Republicans, who praised Bush for taking on a difficult issue, were tepid about the specifics of what the president proposed, especially new details he discussed in a news conference Thursday night about how he would reduce future benefits for all but the lowest-income workers.

The House "will respond to the president's challenge of addressing a fundamental safety net that is in trouble," said Rep. Bill Thomas, the California Republican who chairs the Ways and Means Committee.

Thomas, who called Bush's push to change Social Security "courageous," said his panel would open hearings on an overhaul May 12, with the goal of crafting legislation by early June. Thomas would not say whether he supports Bush's plan to reduce benefits on a sliding scale, but he said "it makes all kinds of sense to examine" it as a way of shoring up the program while shielding those who depend on it the most.

"The president rightly has stepped forward, and the majority in the House is stepping forward to join him" to avert a crisis, Thomas said.

Thomas said he would try to write a measure that could attract bipartisan support, but he lambasted Democrats for what he said was a stance "that they're going to be 100 percent opposed, except for what they want." He apologized in advance to Democrats who might be inclined to support a Social Security overhaul, saying, "They are going to be pressured by the Democratic leadership to stay in lockstep and simply offer, `No.' "

Democrats showed no sign of wilting under such derision, instead renewing their calls for Bush to dump the idea of payroll tax-financed personal accounts and their refusals to offer ideas for keeping Social Security solvent in the future.

Bush is "digging himself even deeper into the hole" with his proposal to reduce future benefits for middle- and high-income retirees, said Democratic Sen. Charles E. Schumer of New York.

"We are waiting for the president to take privatization off the table, and we're not going to get into any solutions" until he does, Schumer added.

The intensified wrangling on Capitol Hill came the day after Bush endorsed a plan that would slow the growth of Social Security benefits for wealthier retirees, leaving low-income workers' benefits growing at today's faster rate. For low-earners, benefits would keep pace with wage growth, which outpaces inflation; but wealthier workers' benefits would be tied to prices, which grow more slowly. Those in the middle would see their benefits tied to a combination of wage and price growth, with faster increases the less a worker earned.

The idea tracks one first offered by economist Robert C. Pozen, a Democratic member of Bush's Social Security commission and head of a Boston-based asset management firm.

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