by Margaret Talev
March 03, 2005
President Bush, Vice President Dick Cheney and Treasury Secretary John Snow announced they will spend the next two months crisscrossing the country to sell Americans on the need for immediate changes to the benefits program, which some experts say won't be able to meet its full obligations to retirees and the disabled starting in 2042 unless it is restructured.
The president scheduled a meeting with several members of Congress, hoping to reach a consensus on what sort of plan leaders might be willing to bring to a vote this year.
And in a potentially significant concession by the administration, Snow told reporters that while the creation of so-called personal accounts is still a must-have element of any reform package, paying for those accounts by diverting payroll taxes from Social Security, the idea that has generated the bulk of the criticism against Bush's plan, may not be the only way to do it and that the administration is open to negotiation.
Snow's overture drew positive reaction from AARP, the national organization representing millions of retirees that has led the organized opposition to the president's plan. AARP's director of federal affairs, David Certner, said Snow's comments sounded like "a forward step in this debate."
"The idea of using payroll taxes to fund these accounts was a non-starter for us, because from our perspective the problem is solvency and if you're taking money out of Social Security you're making the solvency worse," Certner said. "Not everyone has access to 401(k)s. If everybody in the work force had access to a supplemental payroll deduction savings plan, we think that would help increase savings. That doesn't have anything to do with Social Security solvency, but we think we also have a savings problem. And we should address both."
The day's developments came as yet another poll showed mounting public disapproval for the president's overall handling of the Social Security debate and, in particular, his proposal to allow individuals to divert as much as 4 percent of contributions into investments in stocks and bonds. Such a shift wouldn't save the system money _ at least not in the short run - and Democrats have seized on that in opposing the idea along with AARP and other critics.
The poll by the nonpartisan Pew Research Center for People & the Press found only 46 percent of Americans like the idea of creating private accounts, down from 54 percent last December, before campaigning for and against the idea began in earnest.
Social Security has become Bush's weakest policy area in terms of public support, the poll found, with only 29 percent of respondents saying he was handling the issue well and two-thirds saying he has not explained his overall plan clearly enough. The poll surveyed 1,502 Americans from Feb. 16-21.
This and other recent polls suggest more Americans trust AARP, the national organization representing retirees, which opposes Bush's personal accounts concept, than trust the president.
Reaction from residents who turned out at dozens of congressional town hall meetings across the country last week also underscored many Americans' concerns about their retirement savings but ambivalence or opposition to diverting Social Security funds into private investments.
With that reality check, Republican leaders in Congress have in recent days suggested they may not get a Social Security package to a vote this year.
But on Wednesday, leaders seemed to recalibrate their public response. House Majority Leader Tom DeLay lashed out at AARP, saying it was doing its members a disservice by dismissing a plan before debate gets off the ground, and taking issue with the fact that AARP sells mutual funds. AARP's Certner says his group encourages private investment, just not at the expense of Social Security's solvency.
In a week short on good news, the administration and its supporters embraced Federal Reserve Chairman Alan Greenspan's testimony to the House Budget Committee on Wednesday, in which he reiterated his support for creating private accounts and urged Congress to tackle Social Security reform soon.
"In my view, a retirement system with a significant personal accounts component would provide a more credible means of ensuring that the program actually adds to overall saving and, in turn, boosts the nation's capital stock," Greenspan said.
His reasoning for fast action was ominous, however.
"I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver," he said. "If existing promises need to be changed, those changes should be made sooner rather than later."