By MARGARET TALEV
May 13, 2005
House Ways and Means Committee Chairman Bill Thomas, R-Calif., bounced the concept in broad terms off a bipartisan panel of scholars and investors testifying at a daylong hearing.
Afterward, Thomas told reporters that people are far more likely to save if they have to go out of their way not to do it.
"It's voluntary, but everybody's in unless they want to opt out. That's one way to increase the net savings rate," he said. "If we save their own money, we need to worry less about Social Security."
The hearing, which was consumed largely by partisan bickering, kicked off Thomas' efforts to put together omnibus legislation as soon as next month.
Two weeks ago, Thomas raised eyebrows when he announced he would take the lead in drafting Social Security overhaul legislation rather than wait for the Senate to move.
He said his legislation likely will go beyond President Bush's call to address Social Security, the worker- and employer-funded retirement program millions of Americans depend upon, which is projected to begin paying reduced benefits in 2041. Thomas said reforms should be expanded to include tax, pension and savings law adjustments that collectively guide how Americans manage their retirement years. Panelists on Thursday offered data showing that wealthier Americans rely far less on Social Security and more on personal investments and savings when they retire.
"You can't just draw a chalk line like they do around dead bodies in all those TV shows and say we're only going to look at Social Security," Thomas said. "People who care not quite as much about Social Security in terms of their retirement might be willing to accept adjustments in the Social Security system in exchange for adjustments in other areas where they see far more benefit.
"If you can put a coalition together in the society in support of what you're doing, it's easier to put a coalition in Congress in support."
But Thomas' hearing found members of both parties largely stuck at the starting gate.
Democrats continued to insist they would not participate in negotiations as long as Republicans were interested in President Bush's plans to divert a portion of Social Security funds to private investment accounts. Republicans, who control the White House and both houses of Congress but are divided over private accounts and other aspects of the debate, continued to blame Democrats for blocking progress. Polls show Americans opposed to private accounts, and Democrats believe they are benefiting politically by refusing to engage in the debate as long as private accounts are part of the picture.
"The silence is deafening," said Rep. Clay Shaw, R-Fla. "They want the president to negotiate with himself - and lose."
Rep. Pete Stark, D-Calif., countered, "Republicans control the entire federal government, and if they can't get something done on Social Security, then it rests on their shoulders. The Republicans don't need us. They can go ahead and pass a plan."
Members of both parties focused much of their attention Thursday on panelist Robert Pozen, an investor and registered Democrat whose idea for "progressive indexing" is what Bush embraced last month as a means to avert Social Security's insolvency.
Under that concept, the middle class and the wealthy would absorb the brunt of cuts to Social Security benefits to protect Americans earning less than $25,000 per year. The idea, which can exist with or without the private accounts plan that Bush has also demanded, has defenders and critics on both sides of the aisle.
"I'm not representing the president," Pozen told the panel's ranking Democrat, Rep. Charles Rangel of New York.
"Well, he's representing you," Rangel shot back.
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