
Social Security Debate Takes Dramatic Shift
by Guest Blogger, 3/7/2005
In a dramatic shift in how the administration has approached overhauling Social Security, Treasury Secretary John Snow stated March 2 the administration is open to considering proposals that would create government-subsidized personal savings accounts outside the existing Social Security system or through means other than a diversion of funds from an individuals’ payroll tax. This announcement comes amid speculation that the president’s plan for Social Security reform may be less attainable than he and GOP congressional leaders would like to admit.
At the administration’s and GOP congressional leaders’ urging, Republican lawmakers discussed Social Security reform with their constituents in their home districts over the last recess. Many encountered skepticism about proposals to create private accounts in Social Security. GOP lawmakers are themselves divided and have proposed a variety of specific plans that differ greatly from each other. According to a March 2 New York Times article, the Republican leadership differ greatly over the size of the private accounts, whether our economy can sustain trillions of dollars in transition costs to establish them, and whether a tax increase should be included in a reform proposal. Sen. Lindsey Graham (R-SC) and others have publicly broken with their party and supported tax increases by raising the age for Social Security eligibility.
Republicans appear to be in disarray on this issue. For example, Senate Majority Leader Bill Frist (R-TN) said that “in terms of whether it will be a week, a month, six months, or a year before we bring a bill to the floor, it’s just too early to tell.” Two days later, Frist backtracked, urging his colleagues on the Senate floor to tackle this issue immediately. “This President and this Congress are facing this challenge and the challenge is to fix Social Security…. We need to do it this year. Not next year, but this year,” he said.
If reform is pursued this year, it will happen despite strong public opposition. A poll of 1,500 taxpayers conducted Feb. 16–21 by the Pew Research Center found that 46 percent favored diverting a portion of their payroll taxes to pay for private investment accounts — down from 54 percent in December 2004 — and 38 percent opposed it — up from 30 percent in December. The latest New York Times/CBS News Poll similarly found 69 percent of respondents thought private accounts would be a bad idea if such accounts would risk reducing benefits in any way, and 45 percent said President Bush’s private account plan would actually weaken the Social Security system.
Despite these bumps in the road, the president, vice president, and other senior administration officials began a tour March 3 of 60 cities in 60 days to promote their proposals.
