We warned you...Bush attacks seniors with
call for Social Security changes
WASHINGTON -
President Bush said Thursday that “now is the time to confront
Social Security” to deal with a projected $3.7 trillion shortfall
over 75 years and give younger workers the ability to invest some of
their contributions into personal accounts. Bush also promised to
send Congress “a tough budget” early next year to hold the line on
federal spending. “If the deficit is an issue, which it is, it’s
going to require some tough choices on the spending side,” the
president told a White House economic conference.
The president
credited his tax-cutting policies with reviving the economy. Bush
said his strategy will be “to grow the economy with reasonable tax
policy but to make sure the deficit is dealt with by being wise
about how we spend money.”
“It’s not going
to be easy,” Bush said. “It turns out (congressional) appropriators
take their title seriously.”
Bush said that
dealing with Social Security would be a top priority.
“I’m looking
forward to working with members of both chambers and both parties to
confront this issue today, before it becomes more acute,” Bush said.
“By doing so, we will send a message not only to the American people
that we’re here for the right reason, but we’ll send a message to
the financial markets that we recognize that we have an issue with
both short-term deficits and the long-term deficits of the unfunded
liabilities of entitlement programs.”
Bush was not
specific about his own ideas for solving the problem, but laid out a
few do-or-die principles.
He said that for
an undefined group of seniors “nothing will change” in their benefit
structure, that there should be no increase in payroll taxes and
that younger workers should be moved toward private accounts for
some portion of their Social Security contributions.
The audience
chuckled as Bush wrapped up his list of requirements by adding,
“With those principles in mind, I’m open-minded with the members of
Congress.”
Bush said there
are more Americans who have no confidence they will ever see any
Social Security benefits than people who are worried their current
checks will stop coming.
“I think
Congress needs to understand that,” he said.
Richard Parsons,
chairman and CEO of Time Warner Inc., warned that “We’re on a train
wreck course.”
“You can’t fix
this problem with no pain, without making some sacrifices but the
time to start making those sacrifices is now,” Parsons said. He said
that by 2020 there will be two workers paying into the system for
each person receiving benefits.
“There is a
limit to how much you can tax, which means either benefits will have
to come down” or the government will have to print more money to pay
retirement costs, Parsons said.
The White House
acknowledges that allowing younger workers to invest funds in
private accounts would do little to help plug what is projected to
be a $3.7 trillion shortfall over 75 years.
“It will take
more to solve the problem than just personal accounts,” White House
spokesman Scott McClellan said Wednesday. The transformation would
be part of a “comprehensive solution to strengthen Social Security.”
Analysts said it
was far too early to gauge Bush's chances of getting Social Security
reform through Congress.
"I would call
this the first chapter of a very long book," said Greg Valliere,
chief strategist of Schwab Washington Research Group. "My sense is
the main objective of the past two days has been to get in front of
the people the idea that we have to do something."
Bush has offered
little in the way of specifics about his plans, including how to pay
for them, since running on the issue in the 2000 campaign.
“The great
desire for people in Congress is for me to negotiate with myself,”
Bush said. “And therefore, I will continue to articulate principles
that I think are important and reach out to members of both parties
to fashion a plan that solves the problem.”
Bush is expected
to propose details in January, but won’t offer specific legislation.
His summit helped bolster his plans by providing a public forum.
Bush has ruled
out an increase in payroll taxes to pay for the overhaul. Experts
say he would have little choice but to borrow the funds, perhaps $1
trillion to $2 trillion, in order to continue paying benefits for
current and near-retirees whose checks are funded by workers’
payroll taxes.
Rep. John Spratt
of South Carolina, top Democrat on the House Budget Committee, said
Bush’s summit was a “pep rally for privatization,” when the more
urgent problem is the skyrocketing federal budget deficit, which hit
$413 billion in 2004.
Tackling Social
Security is “putting the cart before the horse” by pursuing a
program “with enormous implications for federal borrowing without
doing anything about the rest of the budget,” Spratt said.
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