Social Security debate may be stalled
WASHINGTON – Near the end of his 60-day cross-country campaign, President Bush appears to be further from achieving his signature goal of transforming Social Security than when he began.
Support for Bush’s vision of individual investment accounts has ebbed. A poll this month by USA Today, CNN and Gallup shows nearly twice as many Americans oppose the idea as support it.
The public’s sense of urgency on Social Security has slipped a bit. Not a single Senate Democrat has come out in support of the president’s proposal.
Republicans are divided. Senate Finance Chairman Chuck Grassley of Iowa, who will convene hearings on Social Security on Tuesday, is open to putting individual accounts aside and focusing on the system’s solvency. But some conservatives, including House GOP leaders Mike Pence of Indiana and John Shadegg of Arizona, want a showdown on accounts.
Bush says he’s optimistic the public will demand action and that lawmakers who refuse will pay a political price. But some strategists on both sides say the odds of striking a deal on Social Security – even just to cope with the approaching financial crunch – are fading. They are calculating who will get the blame if and when nothing happens.
Senate Democratic Leader Harry Reid and other Democrats, refusing to discuss solvency until Bush takes individual accounts off the table, say Americans are rejecting the president’s plan because it would undermine Social Security’s historic role as a safety net.
Grassley and other Republicans say Democrats are obstructionists who, for political gain, are refusing to even discuss how to make sure the nation’s retirement system survives for younger workers.
“For those who thought the political stars were finally aligned to get something done this year, that’s proving to be a fallacy,” says Stephen Moore, president of the Free Enterprise Fund, a conservative advocacy group that supports the accounts proposal. “Without Democratic votes, it’s impossible to see how you could get something like this done.”
John Breaux, a former Democratic senator and co-chairman of Bush’s commission on tax reform, says chances for action this year or next on Social Security are close to zero: “The White House should be looking for an exit strategy.”
Bush isn’t taking that advice. White House economic adviser Allan Hubbard says the 60-day campaign, which ends Sunday, has succeeded in convincing the public and political leaders that Social Security faces a serious problem.
Bush has proposed allowing workers to divert up to one-third of their payroll taxes into individual investment accounts that would give them the opportunity to generate a higher rate of return. The accounts would be a way to accumulate assets that could be passed on to their heirs. The plan would carry higher risks and possibly higher rewards, and the system’s guaranteed benefit would be reduced. Democrats say less drastic adjustments could make the system solvent for decades.
Bush began the campaign with stops in states with Democratic senators he was trying to win over – North Dakota, Montana, Nebraska, Arkansas and Florida. None of them have budged.
He recently spent time in such states as South Carolina and Iowa that have important Republican officeholders whose support he’s trying to keep.