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Saturday, April 30, 2005

The New York Times > Washington > Speech Gives Republicans Lift in Social Security Fight

The New York Times > Washington > Speech Gives Republicans Lift in Social Security Fight: April 30, 2005
Speech Gives Republicans Lift in Social Security Fight
By ROBIN TONER and ELISABETH BUMILLER

WASHINGTON, April 29 - House Republican leaders announced on Friday that they hoped to draft Social Security legislation by June, trying to demonstrate new energy behind President Bush's long-stalled initiative. Mr. Bush, a day after embracing a plan to restore the pension program's solvency by curtailing promised benefits for most future retirees, declared, "I'm confident we're going to get something done."

Mr. Bush ended his 60-day campaign to highlight the financial problems in Social Security with the public still skeptical about his approach, but he said he was confident the mood would shift: "The more they understand the nature of the problem, the more they're going to be saying to those of us who are serving, 'Go get it fixed.' "

But Mr. Bush's latest Social Security proposal, unveiled in a prime-time news conference on Thursday night, brought a firestorm of new criticism. Democrats asserted it would amount to deep cuts in benefits for most retirees and transform Social Security from a broad middle-class entitlement to a program aimed at the poor. AARP, the powerful lobby for older Americans, also dismissed the latest Bush proposal, with John C. Rother, policy director for the group, describing it as "an unnecessary and unfair benefit cut for the middle class."

Mr. Bush took his campaign to overhaul the 70-year-old retirement system to an audience of supporters and skeptics in suburban Virginia, highlighting what the poor would gain from his proposal. Under the approach he has embraced, people in the lowest 30 percent of the income spectrum would receive all the benefits now promised to them by current law. But the plan would reduce the growth in benefits now promised to middle-class and affluent retirees, using a sliding scale tied to income.

Mr. Bush and his allies argue that the plan will solve most of the solvency problems in Social Security while protecting those who need it most. "If you've worked all your life and paid in the Social Security system, you will not retire into poverty," Mr. Bush said at the James Lee Community Center in Falls Church, Va. "And there's a way to make that happen, and that is to have the benefits for low-income workers in a future system grow faster than benefits for those who are better off."

In a 44-minute "Conversation on Social Security" that featured the president as a moderator on stage with six people who agreed with him, Mr. Bush never used the words "cuts" or "reductions" to describe his plan for Social Security. He left the details to his press secretary, Scott McClellan, who said in a briefing an hour later that doing nothing about Social Security would result in future benefit cuts to all retirees, regardless of income.

Republicans also stepped up their efforts to cast the Democrats as obstructionists comfortably sunk into the status quo.

But Democrats seemed decidedly unfazed. Representative Charles B. Rangel, Democrat of New York and his party's ranking member on the Ways and Means Committee, declared: "The main approach of Republicans to addressing Social Security's long-term financial challenge is big benefit cuts. They seem determined to make Social Security beneficiaries bear the entire burden of shoring up the system."

Democrats also reiterated that until Mr. Bush renounced his proposal to create private investment accounts in Social Security, financed by payroll tax revenues, they would not negotiate on strengthening the system. Such accounts have huge startup costs, putting additional strains on Social Security, experts say.

In the face of those divisions, Republican leaders sought to quicken the legislative pace, setting the stage for a frenetic late spring and summer. Representative Bill Thomas, Republican of California and chairman of the Ways and Means Committee, said his panel would begin weekly hearings on May 12, with the goal of producing legislation in June that "won't just be a Social Security bill," but would deal more broadly with retirement security, including new ways to encourage savings and provisions on long-term care.

Mr. Thomas did not embrace the details of Mr. Bush's solvency plan, but he did express support for its underlying idea: that lawmakers should protect those most dependent on Social Security from any cuts while curtailing the growth in benefits for middle- and upper-income people. "Those who have other options, perhaps, don't need to get as much as the current formula projects," Mr. Thomas said.

But he added that those middle- and higher-income people would need assurance that there "are provisions in there for them as well and that would be focused on pensions, retirement instruments, and the tax code itself." Mr. Thomas also reiterated that he supported Mr. Bush's proposal to create private retirement accounts.

In a day of dueling news conferences on Capitol Hill, Democrats asserted that Mr. Thomas and Mr. Bush were bent on changing the fundamental nature of Social Security. Representative Sander M. Levin of Michigan, who is on the Ways and Means Committee, asserted that Republicans want to replace the government pension program with a system of private accounts for most Americans and a safety net for the lowest income. "The lines now are very clearly drawn," Mr. Levin said.

The partisan divisions were razor sharp. Mr. Thomas assailed the Democrats for what he called a decades-long effort to avoid the underlying demographic problems in Social Security and the plight of the poorest retirees.

In such a climate, 18 months before midterm elections, there was clear nervousness among the Republicans about the president's high-risk move toward limiting benefits. Some economic conservatives have warned that the party faces a growing risk in emphasizing solvency and advocating benefit cuts in the popular pension program. Stephen Moore, the president of the Free Enterprise Fund, a conservative lobby, said Friday, "I think Nancy Pelosi and Harry Reid are probably opening up Champagne bottles celebrating that they've put Republicans in this trap."

Because of the high political stakes, many have expected the House to hold back until the Senate moves on Social Security. That way, House Republicans could be spared from casting politically difficult votes until they are assured that legislation can actually pass the Senate, which is far more hostile terrain to the Bush plan. Now, the legislative pace is hard to predict.

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