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House GOP pushes own Social Security plan

Associated Press

WASHINGTON – House Republicans, who have watched Democrats stymie President Bush’s proposed Social Security overhaul, are marching ahead with a plan of their own.

In a bill they expect to vote on by autumn, House GOP leaders propose to “stop the raid” on surplus Social Security funds by depositing bonds equal to the extra money in private investment accounts linked to workers under age 55.

While the Republicans plan to continue spending the money for at least the next three years on other government programs, tax cuts and even the war in Iraq, they believe their creation of the accounts will put Democrats at a disadvantage. Next year’s surplus is estimated at $88 billion.

Democrats, however, see the proposal as not only more of the same, but worse than what has been proposed by Bush. He has called for diverting a portion of the payroll taxes that currently are used to pay the benefits of existing retirees.

According to a bare-bones summary posted on a House Committee Web site, surplus Social Security funds would be distributed annually into accounts set up for workers under the age of 55. The flow of money would end when Social Security is no longer running a surplus – 2017, according to the most recent official estimate.

These accounts would be automatically invested in U.S. Treasury bonds for the next three years. The Treasury could borrow the money in the accounts to pay for other government programs, as it now does with surplus Social Security funds. A commission would recommend alternative investment options to take effect beginning in 2009 unless Congress blocks it.

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