Republican members of the Senate Finance Committee met yesterday to discuss options to reform Social Security and achieve solvency for the program. Chairman Chuck Grassley (R-IA) said a number of options were discussed during the meeting (including gradually increasing the retirement age and reducing benefits for high-income seniors), but that he was holding off on pushing only private carve-out accounts - a non-solution favored by President Bush - because of lack of consensus on the policy. Democrats were not involved in the meeting, with Grassley saying he needs to achieve consensus among Republicans before talking with Democrats and also because of the Democrats unwillingness to discuss private accounts created from taking a portion of payroll taxes away from Social Security. One of the most vocal critics of the private accounts, Senator Olympia Snowe (R-ME) applauded the chairman's efforts but added she thought the process should begin in a bipartisan way and be deliberate despite President Bush's call for legislation by the end of this year.

Both the House and Senate are moving closer to crafting legislation for Social Security reform. Senate Republicans are hoping to move Social Security legislation through the Senate Finance Committee before Congress recesses for the Independence Day holiday in three weeks. The House has continued to hold weekly hearings on Social Security reform and believes it will mark up legislation shortly after the July 4 recess. Republican members of the Senate Finance Committee have been holding weekly meetings on Mondays to discuss policy options, and a Senate GOP Social Security task force has been holding weekly meetings on Wednesdays. The task force includes leadership Republicans, members of the Finance panel, and other lawmakers. White House aides also have been involved in the task force meetings. It is still unclear if the Finance committee bill will include payroll-financed private investment accounts since Chairman Grassley (R-IA) is unclear if enough panel members support such a provision. On the House side, hearings have continued about one per week over the last month, the most recent scheduled for today, June 9. The hearing will focus on two benefit adjustment provisions in current law, the government pension offset and the windfall elimination provision. The two provisions affect Social Security benefits paid to federal, state, and local government employees who contribute to a government pension plan instead of Social Security.

Today the CBO released a major report on Social Security, analyzing the effects various proposals to shore up Social Security would have on the program's projected financing, and the impact of proposals on changes in lifetime benefits for workers of various ages. The report was released in conjunction with various hearings on the issue this week. The Senate Finance Committee held a hearing today on solvency. Witness Douglas Holtz-Eakin of the CBO said the new analysis shows low-income earners will do better under progressive indexing than they do under current law; however ranking member Max Baucus (D-MT) was skeptical, saying "Once you look at the details, I think it becomes clear that these three new options cut benefits for Social Security beneficiaries far too deeply. We need to scour all other ideas for improving Social Security's long-run finances." The House Ways and Means Subcommittee continues to hold hearings as well. They are scheduled to hold another hearing May 26, during which subcommittee members will hear from different Congressmen on their specific plans for reform. Rep. Shaw (R-FL), along with others, will testify. Subcommittee Chairman Jim McCrery (R-LA) has stated that key House lawmakers will be ready to write Social Security legislation by July 1. Whether or not they actually choose to write it, he said, "is a political question." In the meantime President Bush continues to tour the country speaking on behalf of Social Security reform and specifically private benefits accounts, despite the fact that many reform experts have stated that he should back away from his push for private accounts. On the same issue, some Congressmen involved in the recent Senate compromise over judicial nominees and the nuclear option are suggesting that this spirit of bipartisanship may spill over into Senate work on immigration and Social Security issues. Sen. Mark Pryor (D-AR), stated the compromise could "lead to us working through an agreement on Social Security and immigration," and added, "There are a lot of other issues pending out there. It feels awfully good to work together."

The Ways and Means Committee held a hearing yesterday on Social Security and issues of retirement savings. Democrats used the opportunity to continue to raise objections regarding private savings accounts. Rep. Pete Stark (D-CA), was one of the most vocal, castigating Republicans for spending too much on tax cuts and now finding themselves with a Social Security shortfall. The Ways and Means Subcommittee on Social Security will hold two more hearings on May 24 and 26. Thomas is hoping to complete legislation this summer. Meanwhile, Bush continues to promote his plan (despite an ongoing lack of support) across the country, stopping in Milwaukee yesterday. Besides pushing his own plan, Bush has been extremely critical of Democrats for not offering alternative proposals to fix Social Security. Yesterday, however, Rep. Robert Wexler (D-FL) filed legislation that combats the shortfall by lifting the earnings cap on taxable wages. His plan, called the Social Security Forever Act of 2005, would lift the cap on taxable earnings requiring workers to pay a 3 percent payroll tax on wages above $90,000, to be matched by the employer. Wexler's reform plan, which has been reviewed by the CBO, completely closes the funding gap in Social Security without cutting benefits, creating private accounts, borrowing, or adding any elements of risk to the benefits collection process.