-Caveat Lector-
June 12, 2001
Bush's Commission on Social Security May Propose Caps Restoring
Fiscal Health
By RICHARD W. STEVENSON
WASHINGTON, June 11 The co-chairmen of President Bush's Social
Security commission said today that they would probably have to propose
politically difficult steps like raising the retirement age and reducing cost of
living adjustments when they make recommendations to the White House
for restoring the system's long-term financial health.
Mr. Bush created the commission to come up with a plan for adding
personal investment accounts to Social Security. But the panel's co-
chairmen, Daniel Patrick Moynihan, the former Democratic senator from
New York, and Richard D. Parsons, a Republican who is co-chief operating
officer of AOL Time Warner, said they expected their recommendations to
also encompass other, more contentious changes needed to put Social
Security on sound footing.
Any such recommendations could force Mr. Bush either to embrace a
position that could carry heavy political cost or to disavow the work of his
own, hand-picked advisers.
Mr. Bush has pledged not to cut benefits for current retirees or for people
nearing retirement, but he has always sidestepped questions about
whether he could support scaling back the guaranteed benefit for future
generations of retirees.
Mr. Moynihan has long advocated raising the age at which retirees can
claim benefits and trimming back the rate at which benefits are adjusted for
inflation. Asked in an interview whether those steps or others like them
would be included in the commission's final report, Mr. Moynihan said no
decisions had been made but that it would be difficult to address the
system's problems without taking some politically unpopular actions.
"I would expect that's the only way we're going to get where we're heading,"
Mr. Moynihan said today during a break in the commission's first meeting.
The panel is scheduled to send its recommendations to Mr. Bush in the fall.
Mr. Parsons said the current system is unsustainable, and that assuring its
long-term solvency would involve some difficult tradeoffs.
Mr. Parsons said that "there will be those who feel their ox is being gored."
Several other members of the 16- person panel, all of whom were selected
by the White House, agreed in interviews that the commission would have
little choice but to push for steps that the president and Congress might find
politically explosive.
"Personal accounts alone will not solve the Social Security problem," said
John F. Cogan, a commission member who was one of Mr. Bush's
economic advisers during the campaign.
Claire Buchan, a spokeswoman for the White House, said Mr. Bush
"appointed a commission to address the critical issues facing the Social
Security system, and we are not going to prejudge what the commission
will find."
If no changes were made, Social Security would start running short of
money to pay all promised benefits over the next few decades, according
to projections by Social Security's trustees.
By 2016, the payroll taxes that finance the system would no longer cover
benefits, forcing Social Security to begin redeeming the government bonds
it holds. By 2038, the bonds would be gone, leaving the system able to pay
less than three- quarters of benefits.
Mr. Bush made allowing workers to invest some of their Social Security
money in the financial markets one of his top campaign promises. He has
indicated that he will begin pushing the issue in Congress late this year and
next year, after the panel provides him with proposals for how to carry out
what would be the most far-reaching overhaul of the system since its
founding in the New Deal.
To supporters of private accounts, the fact that Mr. Bush is in the White
House is evidence that politicians no longer have to fear tampering with
Social Security. Polls show there is substantial support, especially among
younger people, for allowing workers to invest a portion of their payroll
taxes in stocks and bonds.
But critics of personal accounts say Mr. Bush has never explained how he
would pay for his plan and never acknowledged that it would involve
tradeoffs that might make it less attractive. Most Democrats in Congress
oppose personal accounts, and liberal groups promised to fight the
commission and the president through every step of the debate.
The administration is taking "the first steps to partially dismantling the
Social Security system in ways that could make it less secure," said Roger
Hickey, director of the New Century Alliance for Social Security and
Medicare, a liberal advocacy group.
Robert Greenstein, the director of the Center on Budget and Policy
Priorities, a liberal research group, said any plan that diverts payroll tax
revenue into private accounts would require large infusions of money into
the system out of the general government budget. But after Mr. Bush's tax
cut, he said, "there is nothing left."
The commission has not yet begun debatin
