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Bush open to Social Security indexing, defends private accounts
Scripps Howard News Service


April 29, 2005

Washington - President Bush expressed support for a means-based Social Security system Thursday night, a move that would provide additional funds to retirees in the lower economic strata while cutting into payments for the wealthy.

jpg Pres. Bush

President George W. Bush holds a press conference in the East Room Thursday, April 28, 2005. "Millions of American families and small businesses are hurting because of higher gasoline prices," said the President addressing many topics. "My administration is doing everything we can to make gasoline more affordable."
White House photo by Paul Morse

The proposal, Bush said, will "solve most of the funding challenges facing Social Security" and render the system fairer for lower-income workers.

"If you work hard and pay into Social Security your entire life, you will not retire into poverty," he said during a nationally televised press conference from the East Room of the White House.

Bush touched on several issues during the hour-long event, expressing concern about the impact rising gasoline prices are having on the economy and optimism over the turn of events in Iraq, where democratically elected representatives have formed a government.

The president also touched on the partisan friction that has consumed Washington, saying he is "disappointed" because he thought the opposing parties could work together but adding, "I'm not surprised that some are balking at doing hard work."

Most of the evening, however, was dedicated to Social Security. The president failed to produce a specific program, asserting that it was an issue that needed to be hammered out with Congress.

But he offered in his opening remarks support for what has been termed "progressive indexing" - a system where low-income workers receive benefits that grow faster than the rate of inflation while the benefits for wealthier seniors grow no faster than inflation.

As presently constituted, Social Security will begin doling out more money than it collects through the payroll tax beginning in 2017, forcing the system to dip into its trust funds. The trust could face depletion by 2041, an event that would force benefit cuts amounting to around 30 percent.

Under the current system, benefit increases are based on wage growth.

Bush wouldn't set a cut-off point for receiving enhanced benefits, although he cited a solution proposed by Robert Pozen, the chairman of MFS Investment Management in Boston. Under that proposal, the lowest 30 percent of retirees would continue to have their benefits based on the wage index, which generally rises at a higher rate than inflation. The remaining 70 percent could see their annual benefit increase based on inflation or a formula that involves both wages and inflation.

Regardless, the president remained steadfast behind his proposal that younger workers be provided with the opportunity to divert a portion of their payroll taxes into private retirement investment accounts where they could experience a higher rate of return.

Senate Democrats have almost unanimously said they will refuse to go along with any private investment plan, maintaining it draws needed funds out of the Social Security system and could shred the safety net Social Security provides. Bush dismissed that claim.

"I like the idea of giving someone ownership," Bush said. "I mean, why should ownership be confined only to rich people? Why should people not be allowed to own and manage their own assets who aren't the, you know, the so-called investor class? I think everybody ought to be given that right."

The Democrats were not moved.

"All the president did tonight was confirm that he will pay for his risky privatization scheme by cutting the benefits of middle-class seniors," said Senate Democratic Leader Harry Reid, of Nevada, and his counterpart in the House, Rep. Nany Pelosi, of California, in a joint statement. "President Bush cannot escape the fact that privatization will weaken Social Security at a time we should be strengthening it."

On other issues, the president, as is his practice, refused to speculate on when the U.S. can begin withdrawing troops from Iraq, saying only that the return will occur "as soon as possible. And as soon as possible depends upon the Iraqis being able to fight and do the job."

He expressed concerns about the economy, even though "the experts tell me that the forecast of economic growth in the coming months looks good."

"I am concerned about the economy because our small-business owners and families are paying higher prices at the gas pump," he said. "And that affects the lives of a lot of people. If you're a small-business owner and you have to pay higher gas prices and you're _ likely you may not hire a new worker. In other words, higher gas prices, as I have said, is like a tax on the small-business job creators. And it's a tax on families. And I do think this has affected consumer sentiment; I do think it's affected the economy."

Bush said he is working to convince oil-producing nations to increase supply, a move that could lower the price. He also said rising prices make the case for his energy policy, saying the problems the nation currently is facing wouldn't exist if the government had taken action 10 years ago.

The president promised there would be "no price gouging at gas pumps in America."

And while acknowledging that partisan bickering has created problems, the president expressed confidence that lawmakers ultimately will adopt a major portion of his agenda.

"I think when it's all said and done, we're going to get a lot done," he said.

Bush also urged the Senate to confirm John Bolton, his choice to serve as U.S. ambassador to the United Nations, and urged the upper chamber to afford his judicial nominees an up-or-down vote on the floor absent any threatened filibusters.

But he rejected the claim advanced by some social conservatives, like James Dobson of Focus on the Family, that Democrats are anti-Christian because they oppose some Bush nominees to the bench.

"I think people are opposing my nominees because they don't like the judicial philosophy of the people I've nominated,'' he said. "Some would like to see judges legislate from the bench. That's not my view of the proper role of a judge.''

Pressed about the anti-Christian claim, Bush responded, "I just don't agree with it.''

The press conference was his fourth since assuming office in January 2001. The event, originally slated for 8:30 p.m., was pushed up an hour to accommodate the television networks, which were set for the first day of sweeps month - the time when they set advertising rates.




Distributed by Scripps Howard News Service,

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