Private Social Security accounts not in House bill - East Valley Tribune: Nation / World

Private Social Security accounts not in House bill

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Posted: Wednesday, June 22, 2005 6:06 am | Updated: 8:15 am, Fri Oct 7, 2011.

WASHINGTON - With the acquiescence of their leaders, key House Republicans are drafting Social Security legislation stripped of President Bush's proposed personal accounts financed with payroll taxes and lacking provisions aimed at assuring long-term solvency.

Instead, according to officials familiar with the details, the measure showcases a promise, designed to reassure seniors, that Social Security surplus funds will be held inviolate, available only to create individual accounts that differ sharply from Bush's approach.

Under current law, any Social Security payroll tax money not used to finance monthly benefits is in effect lent by Social Security to the Treasury, which uses it to finance other government programs. Government actuaries say the surplus is expected to vanish in 2017 when benefit payments exceed payroll taxes collected.

In addition, the GOP bill "doesn't deal with solvency," according to another official, indicating it would avoid the difficult choices of curbs on benefits, higher taxes or changes in the retirement age needed to implement the president's call for long-term financial stability.

The officials who discussed the measure Tuesday did so on condition of anonymity, saying they were barred from disclosing details until a formal release Wednesday.

Four members of the House Ways and Means Committee arranged for an early afternoon news conference to discuss the measure. Rep. Bill Thomas, R-Calif., chairman of the panel, was not scheduled to join the others, Reps. Jim McCrery of Louisiana, Sam Johnson of Texas, Clay Shaw or Florida and Paul Ryan of Wisconsin.

But Thomas was intimately involved in crafting the bill, and he and McCrery met privately on Tuesday with Speaker Dennis Hastert and other members of the leadership.

It was not clear in advance whether Thomas, Hastert or other leaders intended to formally endorse the bill, but one official said it was possible an outline would be presented before the news conference to the GOP rank and file.

Either way, the emerging legislation marked the latest blow to Bush, who has said repeatedly he intended to spend the political capital gained in last fall's re-election to win fundamental changes in Social Security. The president has traveled to more than two dozen states since last winter trying to build support. Polls have shown his recommendations generate insufficient popularity to galvanize Republican lawmakers to action.

Instead, with Democrats unified in opposition and threatening to use the issue in the 2006 elections, GOP leaders have been reluctant to act.

As recently as last week, Hastert told reporters there was no timetable for action on Social Security legislation. Other senior Republicans have said they hoped the Senate could act first.

But Senate Republicans are stymied as well. Efforts to forge a consensus among GOP members in the Senate Finance Committee have proven unsuccessful. Sen. Olympia Snowe, R-Maine, who holds a pivotal vote, said Tuesday the issue was too important to be put on a partisan "fast track."

Bush got a firsthand glimpse of the difficulties confronting him during the day, when Sen. Robert Bennett, R-Utah, informed him that he intended to introduce legislation omitting private investment accounts funded through Social Security payroll taxes.

Bennett favors the accounts, but has long been considering dropping them from legislation in hopes of prompting Democrats to join in bipartisan talks on steps to shore up solvency.

"He indicated that I should go forward and do that," Bennett said of Bush. "And I'm grateful to have him do that even though his own preference would be to have personal accounts included."

Bennett's bill also includes steps to place Social Security on a stronger financial footing. It would curtail promised benefits for middle- and upper-income wage earners of the future, while protecting benefits for those who made less money during their working lives.

Bush's spokesman, Trent Duffy, told reporters that despite Bennett's plan, the president is not retreating on his insistence for personal accounts.

Later, in remarks on CNN, Bennett said that while Bush had spoken favorably of steps to achieve greater solvency, he "didn't specifically say, 'And it's a good thing you're dropping private accounts.' Frankly, that didn't come up," said the senator, who supports individual accounts.

Apart from Bennett, Sen. Jim DeMint, R-S.C., is crafting legislation along the lines of the bill being prepared in the House.

In an interview, DeMint said the measure was designed to mark the first step on a longer road toward transforming Social Security, a recognition that Congress isn't ready to enact everything the president wants.

He, too, indicated the bill was designed to outflank Democrats.

"The party of 'no' will have a hard time saying 'no' to saving Social Security," he said.

Bush favors allowing younger workers to divert a portion of their Social Security payroll taxes into personal accounts, enabling them to reap the reward of investment returns higher than Social Security provides. His approach also calls for a reduction in benefits promised to future retirees.

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