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.

The Government Accounting Office (GAO) has released a very good primer on the challenges facing the Social Security program and the difficult choices Congress and the country must make to address those challenges. The guide, called Social Security Reform: Answers to Key Questions (GAO-05-193SP, May 2005) provides answers to questions about the most basic aspects of the Social Security and reform issues in a concise and easy-to-understand format. It provides straightforward answers to how Social Security works, why it needs reform, what the basic options are, and how to assess their implications. It also includes a glossary of terms and bibliography of related GAO products.

Bill Thomas (R-CA) and the Ways and Means Committee kicked off the first of many committee hearings on Social Security today. The Committee will hear from a number of witnesses, including senior fellow Jason Furman of the Center on Budget and Policy Priorities; Eugene Steuerle, a senior fellow at the Urban Institute; Michael Tanner, director of the Cato Institute's Project on Social Security Choice; Robert Pozen, and former economic advisor to President Bush, Lawrence Lindsey. The Ways and Means Subcommittee on Social Security, which is chaired by Rep. Jim McCrery (R-LA), will hold the next hearing on May 17th. House Reps remain split on how to proceed with Social Security legislation. Chairman of the House Rules Committee, Rep. Mike Pence (R-IN), said yesterday, "Let's get on with it. Let the House lead on Social Security reform. If the House goes first, we will produce a reform that is consistent with the President's vision for a 21st Century public retirement system." A number of other House members remain skeptical however, raising concerns that it may be risky to pass legislation without knowing it would have Senate support. Thomas met last night with Sen. Ben Nelson (D-NE) one-on-one to discuss his ideas for shoring up Social Security. Nelson noted Thomas is promoting "fundamental changes that [are] broader than Social Security." Thomas discussed some specifics regarding his ideas in an April 29 press conference. A recent CBPP report discusses the details mentioned by Thomas, and highlights the fact that Thomas may be looking to use Social Security legislation as a means to push for more tax breaks for the wealthy. The report can be read here.