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Social Security Fight Begins
By: William
Neikirk
WASHINGTON - Social
Security overhaul got off to a rough start in
Congress Tuesday, encountering partisan gridlock
and deep misgivings about reshaping the
70-year-old program that has eased the sting of
poverty for many elderly Americans.
The Republican-controlled Senate Finance
Committee began the legislative process of
writing a measure to restructure Social
Security, but Democrats remained solidly against
any plan that would create individual personal
accounts in the government's popular social
insurance system for retirees.
As the senators debated the financial details of
several proposals to alter Social Security,
hundreds of opponents staged a campaign-style
rally near the Capitol in opposition to the
personal-account plan proposed by President
Bush.
"If he's going out to push for privatization,
let's help him pack," Sen. Dick Durbin, D-Ill.,
told the cheering crowd of partisans, referring
to Bush's 60-day blitz to sell his proposals to
the public. Opinion polls have shown a decline
in support for personal accounts since Bush
started his campaign.
Even some Republicans on the panel expressed
reservations about the Bush approach, casting
doubt on whether it can get through committee.
Sen. Olympia Snowe, R-Maine, said she did not
want to tamper with Social Security's system of
guaranteed benefits. Another Republican, Sen.
Craig Thomas of Wyoming, expressed reservations
about the heavy borrowing that personal accounts
would require.
The day's developments once again exposed the
sharp partisan divide on the issue and the
difficulty of reaching agreement on legislation
that would deal with the system's long-term
financial problems.
Sen. Charles Grassley, R-Iowa, chairman of the
committee, vowed to go forward with plans to
write a bill by this summer, but he expressed
his frustration over Democratic opposition
toward proposals to introduce personal accounts.
"Those of you who are bad-mouthing every other
suggestion out there, suggest your own plans,"
Grassley said. "Doing nothing is not an option,
because doing nothing is a cut in benefits."
Despite such criticism, Democrats did not back
down from their contention that partially
privatizing the system is a bad idea, saying
that Congress needs to work instead on proposals
that would keep Social Security from going
insolvent in 2041 (as projected) while retaining
its essential structure.
And they contended that Bush has not suggested
any real solvency plan either, only a sketchy
idea for private accounts. The president has
said he would work with Congress on ways to end
Social Security's future funding shortfall.
Noting that Bush's plan would allow workers to
divert 4 percentage points of their payroll
taxes into private accounts, Sen. Max Baucus,
D-Mont., said it "would dig Social Security into
a deeper hole." He added, "We do not have to
privatize Social Security to save it."
Grassley, who favors personal accounts, said he
would seek approval of a bill with or without
Democratic support, but he acknowledged that he
may not have the votes to pass a bill in
committee. "I may not get to that point," he
said at the end of Tuesday's hearing.
But Grassley told CNN that if he does not have
the votes to get personal-account legislation
approved, he would push for committee approval
of legislation that would make Social Security
solvent.
Democrats criticized three separate
personal-account plans submitted to the panel.
One such plan, pushed by Boston investment
banker Robert Pozen, would scale back future
benefits through a system of "progressive
indexing."
Pozen's plan, which Bush has praised, would link
initial benefits for low-income people to the
national growth in wages while initial benefits
for high-income people would be linked to the
increase in prices, which tend to rise less than
wages. Initial benefits for middle-income
taxpayers would be calculated through a blend of
wage and price indexing.
Baucus criticized the plan as "bad policy," but
Pozen said it would make Social Security solvent
while also providing individual accounts and
protecting Americans at the lower end of the
income scale. He called personal accounts a
"sweetener" that would help make up for benefit
cuts.
Other personal-account plans were presented by
Peter Ferrara, senior fellow at the Institute
for Policy Innovation, and Michael Tanner, a
Cato Institute scholar. Brookings Institution
scholar Peter Orszag outlined his proposal to
raise payroll taxes and cut future benefits by
linking both to life expectancy.
Meantime, at the National Press Club, Sen.
Barack Obama, D-Ill., joined James Roosevelt,
the grandson of the late President Franklin D.
Roosevelt, in whose administration Social
Security was enacted, to warn about tinkering
with Social Security's protections.
"The irony of this all-out assault against every
existing form of social insurance is that these
safety nets are exactly what encourage each of
us to be risk-takers and entrepreneurs who are
free to pursue our individual ambitions," Obama
said. "This is how America works and, if we want
it to keep working, we need to develop new ways
for all of us to share the new risks of a 21st
Century economy, not destroy those that we
already have."
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