Archive for Friday, August 5, 2005

Social Security plan needs push

August 5, 2005

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President Bush must be having a horrendous case of deja vu.

Ninety minutes down the road from his Crawford ranch, where the president is hanging his hat for the month, Texas legislators are wrangling over the state's school funding mess. The scene should strike Bush as eerily familiar. Eight years ago, he was in the governor's office trying to get legislators to support his efforts to solve Texas' school funding problems.

Austin's current meltdown should seem familiar for another reason. Like his school finance tussle in 1997, Bush is trying to get Congress to go along with him in saving Social Security from financial problems.

So far, he has a no-go. And that's with a Republican Congress. The GOP controls both the House and Senate, and the president hasn't gotten them to budge.

Some legislators are with him on allowing workers to use part of their Social Security taxes to establish personal retirement accounts. A few others are with him on changing how benefits are calculated for retirees. But there aren't enough Republicans to favor both, which is the best combination to keep Social Security from going bankrupt.

Not surprisingly, getting legislators to change benefits is the big hurdle. No one likes to talk about messing with Social Security payouts. One Republican member of Congress I spoke with said current retirees are absolutely convinced a change in benefits will affect them.

On Bush's behalf, let me say this loud and clear: No one - no one - is talking about changing benefits for current retirees. The president instead is talking about a plan that would mainly affect upper-income workers. He wants Congress to link Social Security benefits to the annual rise in prices, not wages.

The Bush argument is sound. Prices more accurately reflect inflation than wages.

Along with the president, GOP Sen. Robert Bennett has the guts to talk about this idea, which Democratic investment adviser Robert Pozen originated. Bennett has introduced a bill to gradually change benefits. But it's basically sitting there, like the rest of the Senate's work on Social Security.

The chamber is waiting for the House to go first. As a result, the president needs to use the next month to work the House hard from his Texas ranch.

Momentum is growing in the House for a plan that would set up personal accounts for every worker. GOP Rep. Sam Johnson of Dallas and 43 other representatives want to take a portion of the Social Security surplus and use it to set up the accounts. And every year Social Security runs a surplus after that, the bounty would get spread across the accounts.

This sounds good, but the president needs to tweak it. For one thing, workers could opt out of the accounts only if they tell the government so. Some will see that as different from the voluntary accounts the president originally proposed. He should make sure everyday Americans know they don't have to participate unless they choose.

The president also needs to work the House to change benefits. And work it big time. The House has not pushed to match Bennett's courageous approach to linking benefits to prices. Without this piece of the action, Congress can't settle Social Security's financial problems.

Maybe Bush should invite GOP Rep. Bill Thomas, the chairman of the pivotal House Ways and Means Committee, down to Crawford for a chat. This is Thomas' last term as chairman, and some think he wants to go out with a bang. It's difficult to think of a bigger statement than producing a Social Security plan that establishes personal retirement accounts and keeps Social Security solvent.

For the record, Bush had the same problem on school finance in Texas. He couldn't get enough Republicans to go along with him.

Here's hoping that doesn't happen again. The last thing we need is to be sitting around eight years from now worrying about another problem Bush couldn't solve, particularly one that affects our retirement years.

- William McKenzie is an editorial columnist for The Dallas Morning News. His e-mail address is wmckenzie@dallasnews.com.

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