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The Buffalo News
Bush says fix Social Security promptly
Says it 'is going broke'; Schumer disagrees
By DOUGLAS TURNER
News Washington Bureau Chief
1/12/2005
WASHINGTON - President Bush on Tuesday said the Social Security System "is going broke" and needs to be fixed now, but Democrats, including Sen. Charles E. Schumer charged the White House has created a false crisis in an attempt to kill the program.
Schumer, D-N.Y., a member of the Finance Committee that will consider any changes to the system, said in an interview Bush is being influenced by "a group of ideologues who really want to undo Social Security."
"They don't like the fact there is a government program that is so successful. Privatization is a euphemism for killing it."
Bush, at a White House event, predicted he will be able to convince skeptics that creating private investment accounts is the way to do it.
"Most younger people in America don't think they'll see a dime," Bush said, kicking off what will be a series of appearances by his top officials to help convince the public and lawmakers that the retirement system needs fixing.
Any move to change the program will carry massive political impact. In Erie County alone, more than 188,000 people receive some form of Social Security, according to census data made available by Schumer's office.
Some House Republicans were reported worried that trying to change a benefit package used by 48 million Americans could cost them their majority in 2006.
Rep. Jack Kingston, R-Ga., said more than 15 House Republicans are fearful of a backlash prompted by Bush's initiative. Former House Speaker Newt Gingrich, R-Ga., warned that tampering with Social Security could cost the GOP its House majority in the 2006 elections.
Schumer said his contacts on Wall Street are "very leery of any program that borrows another $2 trillion, which is what this privatization would cost."
"That would send interest rates so sky high that it would do far more harm to the economy than any good it would do (the financial community.)
"They don't need it, and they are very lukewarm about it."
Bush has not specified exactly how he wants the system changed. He is likely to back something close to the recommendation of the 2001 commission report urging that 2 percentage points of the total 12.6 percent payroll tax for Social Security be set aside for private investment accounts.
Bush told the Wall Street Journal he will try to provide political cover for those in Congress who support overhaul and make it politically risky to oppose.
"My attitude is once we assure the seniors who receive Social Security today that everything is fine I think we've got a shot to get something done," Bush said.
Schumer and other Democrats who lashed out at Bush had no recommendations on how to retain the system's solvency. They said their first task was to examine in detail what Bush actually asks Congress to do.
Social Security is projected to start paying out more in benefits than it collects in taxes in 2018, according to Social Security trustees, and can pay full promised benefits only until 2042.
The nonpartisan Congressional Budget Office has projected that the program will be solvent until 2052.
Schumer, who will head the Democrats' 2006 Senate campaign, said the administration doesn't "want to fix it. They have manufactured a crisis."
"What other business or government would put at the top of its agenda a plan for a problem that doesn't start to bite until 2042?" he said.
Under the commission plan, benefits could be cut for today's future recipients by up to 40 percent to finance privatization," said Rep. Sander Levin of Michigan, the top Democrat on the House Social Security subcommittee.
"Personal investment accounts don't save Social Security, they dismantle Social Security," said Barbara Kennelly, a former Democratic congresswoman from Connecticut, who now heads the National Committee to Preserve Social Security.
News wire services and Washington Bureau Assistant Patti Truant contributed to this article.
e-mail: dturner@buffnews.com
Bush says fix Social Security promptly
Says it 'is going broke'; Schumer disagrees
By DOUGLAS TURNER
News Washington Bureau Chief
1/12/2005
WASHINGTON - President Bush on Tuesday said the Social Security System "is going broke" and needs to be fixed now, but Democrats, including Sen. Charles E. Schumer charged the White House has created a false crisis in an attempt to kill the program.
Schumer, D-N.Y., a member of the Finance Committee that will consider any changes to the system, said in an interview Bush is being influenced by "a group of ideologues who really want to undo Social Security."
"They don't like the fact there is a government program that is so successful. Privatization is a euphemism for killing it."
Bush, at a White House event, predicted he will be able to convince skeptics that creating private investment accounts is the way to do it.
"Most younger people in America don't think they'll see a dime," Bush said, kicking off what will be a series of appearances by his top officials to help convince the public and lawmakers that the retirement system needs fixing.
Any move to change the program will carry massive political impact. In Erie County alone, more than 188,000 people receive some form of Social Security, according to census data made available by Schumer's office.
Some House Republicans were reported worried that trying to change a benefit package used by 48 million Americans could cost them their majority in 2006.
Rep. Jack Kingston, R-Ga., said more than 15 House Republicans are fearful of a backlash prompted by Bush's initiative. Former House Speaker Newt Gingrich, R-Ga., warned that tampering with Social Security could cost the GOP its House majority in the 2006 elections.
Schumer said his contacts on Wall Street are "very leery of any program that borrows another $2 trillion, which is what this privatization would cost."
"That would send interest rates so sky high that it would do far more harm to the economy than any good it would do (the financial community.)
"They don't need it, and they are very lukewarm about it."
Bush has not specified exactly how he wants the system changed. He is likely to back something close to the recommendation of the 2001 commission report urging that 2 percentage points of the total 12.6 percent payroll tax for Social Security be set aside for private investment accounts.
Bush told the Wall Street Journal he will try to provide political cover for those in Congress who support overhaul and make it politically risky to oppose.
"My attitude is once we assure the seniors who receive Social Security today that everything is fine I think we've got a shot to get something done," Bush said.
Schumer and other Democrats who lashed out at Bush had no recommendations on how to retain the system's solvency. They said their first task was to examine in detail what Bush actually asks Congress to do.
Social Security is projected to start paying out more in benefits than it collects in taxes in 2018, according to Social Security trustees, and can pay full promised benefits only until 2042.
The nonpartisan Congressional Budget Office has projected that the program will be solvent until 2052.
Schumer, who will head the Democrats' 2006 Senate campaign, said the administration doesn't "want to fix it. They have manufactured a crisis."
"What other business or government would put at the top of its agenda a plan for a problem that doesn't start to bite until 2042?" he said.
Under the commission plan, benefits could be cut for today's future recipients by up to 40 percent to finance privatization," said Rep. Sander Levin of Michigan, the top Democrat on the House Social Security subcommittee.
"Personal investment accounts don't save Social Security, they dismantle Social Security," said Barbara Kennelly, a former Democratic congresswoman from Connecticut, who now heads the National Committee to Preserve Social Security.
News wire services and Washington Bureau Assistant Patti Truant contributed to this article.
e-mail: dturner@buffnews.com
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