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Bush's Social Security proposal widens partisan divide

WASHINGTON—President Bush's latest attempt to revive his campaign to revamp Social Security—and re-launch his floundering second presidential term—wasn't gaining any new converts on Capitol Hill Friday.

Instead, it only deepened the chasm between the parties, even as key Republicans announced they would try again to attract Democrats with sweeping new retirement legislation that combines Social Security, pensions and health care.

Bush's central idea of letting workers invest some of their payroll taxes into private retirement savings accounts remains the political ball-and-chain that's hobbling his top second-term legislative goal. Virtually all Democrats in Congress, and many Republicans, are dead-set against it.

And his new proposal, announced at his Thursday night news conference, to change the way future Social Security retirement benefits are calculated and reduce their rate of growth for all but the poor, opened a new battlefront with Democrats, who say it would hurt middle-income retirees.

The bottom line: Bush's Social Security proposal still looks dead in the water.

"I don't think there is anything that the president is going to be able to do to sway any votes one way or the other," said Mickey Edwards, a Republican former congressman from Oklahoma who is now a director at the Aspen Institute, a nonpartisan think tank.

"Every week that goes by just plants more doubts in people's minds whether this is a good thing or whether it's necessary. I think the president is swimming upstream."

Bush's struggles stem from a combination of factors. His public approval ratings are at an all-time low, hurt by high oil and gas prices and perceptions of a tepid economy.

Democrats, meanwhile, have become emboldened by a Republican retreat on ethics in the House of Representatives and a partisan confrontation over judges in the Senate.

And aided by liberal groups and the AARP, the powerful seniors' lobby, Democrats have mounted a national campaign against the president's proposal.

Until now, Democrats have insisted Bush would have to abandon his quest to create private investment accounts funded with payroll taxes for them to participate in any negotiations about fixing Social Security.

But on Friday, they seemed to up the ante, rejecting any proposal that would reduce the growth rate of benefits for middle-income retirees.

Thursday night Bush endorsed a new Social Security fix that would protect the benefits of low-income retirees but reduce the rate of growth for benefits for wealthier seniors.

Democrats immediately denounced the idea as an attempt to change Social Security from its original intent as retirement "insurance" for all Americans to a welfare program meant only for those in poverty.

"We're going to slug it out with the president and the Republicans who want to turn Social Security into a poverty program," said Rep. Sander Levin of Michigan, the top Democrat on the House Social Security subcommittee.

Bush on Friday deplored the "gotcha politics" that he said gets in the way of responsible government. In a warning to Democrats, he added: "Eventually what's going to happen in this debate is that if—those who block meaningful reform are going to be held to account in the polls."

The bipartisan Concord Coalition, an anti-deficit watchdog group, praised Bush for recommending slower increases in benefits but said it wouldn't be enough to eliminate the financial shortfall that Social Security could face in about 35 years.

"There are only two options for addressing the gap in Social Security's finances: Reduce promised benefits or raise taxes to pay for them," said Robert Bixby, the coalition's executive director. "It is easy to demagogue either option because they require everyone to accept the notion that there is no free lunch."

Encouraged by polls that show Bush losing ground on his plan for private accounts, Democrats say they have no interest in offering alternatives to it.

But polls present a mixed picture. They show that while Americans remain skeptical toward individual accounts, they believe the solvency plight of Social Security requires an urgent remedy.

A poll by the Pew Research Center last month also showed 58 percent of those surveyed favor reducing benefits for "wealthy retirees." That would suggest that Bush's progressive approach to benefit increases could prove popular—depending on where the line is drawn for slowing the growth rate of future benefits.

Democrats focus on the potential impact on middle-income Americans, a voting bloc they're courting aggressively.

"The president tried to disguise his benefit reductions, suggesting that the cuts he proposes would affect only the well-off," said Rep. Charles Rangel, D-N.Y. "But in fact, everyone earning more than $20,000 a year would be hit with a substantial cut under the plan he endorsed."

Some advocates of individual accounts said Bush made a tactical error by turning attention to future benefit reductions.

"It's a strategic trap for Republicans to start talking about cutting future benefits rather than talking about increasing the rate of return through personal accounts," said Stephen Moore, a fiscal conservative and head of the Free Enterprise Fund.

"If you're talking about cutting back future benefits, then your orientation becomes making Social Security a worse deal for workers. I think that's misguided."

On Friday, the chairman of the House Ways and Means Committee Rep. Bill Thomas, R-Calif., scheduled hearings on retirement proposals that he said could produce legislation by mid-June.

He credited Bush for raising public attention about Social Security's solvency problems but didn't embrace the president's plan.

"I heartily support the president's concept of having an account with your name on it, a personal account if you will," he said. "What that structure looks like in general will be the result of hearings before the full committee and the subcommittee looking at a number of options."

Thomas stressed that he wants to tackle issues that affect retirees beyond Social Security, including pension changes, health care and taxes.

"The president focused on Social Security," he said. "I want to look at other factors affecting retirement."

He said overarching legislation could win the support of Democrats who would vote against a narrower Social Security bill.

But Moore of the Free Enterprise Fund cautioned that such a huge undertaking could succumb to over-reaching.

"I worry that we don't try to bite off more than we can chew," he said. "Social Security is a pretty big bite. If you start talking about, `Well, let's do tax reform, health care reform, long-term care reform,' all in one mega-bill, it all become indigestible politically."

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(c) 2005, Knight Ridder/Tribune Information Services.

GRAPHIC (from KRT Graphics, 202-383-6064): 20050429 SOCIALSECURITY

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