by Margaret Talev
March 10, 2005
But President Bush's plan to let younger workers divert some of their Social Security contributions into private investments won't in and of itself fix the problem and could instead speed up the program's insolvency, Comptroller General David M. Walker told the House Ways and Means Committee in that key panel's first hearing on the subject.
When Democrats seized on that testimony, Republicans demanded that Walker clarify his remarks. He went on to say that carving out private accounts from Social Security funds might not jeopardize the program if other changes were enacted simultaneously. Those might include reducing benefits, asking workers to pay in more or borrowing money from another source to pay the transition costs. Alternatively, Walker said a program encouraging workers to invest part of their paychecks in stocks and mutual funds in addition to their full contributions to Social Security would not hurt the program's solvency.
Walker also suggested, under badgering from Rep. Charles Rangel, D-N.Y., that President Bush made a strategic error in pushing private accounts as the focus of reform efforts instead of first seeking common ground with Democrats over how to extend the program's solvency beyond 2042.
"I would have done it differently," Walker said reluctantly. "I think the president is right in saying we should solve it now," he said, but added, "I don't think it has been a very good process."
With estimated transition costs of $2 trillion and the chance of lower benefit guarantees in exchange for the possibility of higher returns, the concept of personal accounts scares many Americans. It has hurt the president's ratings in polls and served as Democrats' rallying point as they resist Republican efforts to wrest political credit for a program that has belonged to the Democrats since President Franklin Roosevelt's administration.
The president and top advisers have begun a 60-day, 60-city campaign to try to turn around public opinion about the administration's plans.
As they make their way across the country, Republican and non-partisan polling offers a window into how the president might reshape his message. House Republicans are to be briefed Thursday on focus group reactions to the president's campaign so far.
Meanwhile, a poll out Wednesday by Quinnipiac University shows support for private accounts continuing to slip, and found only 15 percent of respondents saying there is a "crisis" in Social Security, while a majority see it as a "major problem." The survey over the past week of 1,534 registered voters also found continued support for making those who earn more than $90,000 pay more into the system. Those surveyed also said they would prefer any reforms be designed by a non-partisan commission rather than by Congress.
The Ways and Means hearing Wednesday marked the first of what could be several contentious ones in the months to come, unless the Republican-controlled Congress decides to abandon the subject for the year.
While committee members ventured into brief discussions about what fixes might be worth debating, politics, not policy, set the tone, with Democrats demanding the discussion of personal accounts be shelved.
"There are two ways to handle this," Rangel said at the start of the hearing. "Take off the table the one thing that does not deal with solvency, take it off the table so we can work, or go around the country to political rallies, 60 cities in 60 days, decreasing our ability to work together. Private accounts cannot be on the table if you're looking for bipartisanship."
Committee chairman Bill Thomas, R-Calif., reminded Democrats that they had been the ones in power in 1983 when both parties agreed to Social Security reforms that raised taxes and cut benefits. "If we continue to deliver a line in the sand that benefits promised that cannot be delivered must be adhered to, I think we're going to have a little bit of difficulty in moving forward."