Print

Email story

Comment

Email editor

Social Security reform stalled

Those on both sides of President Bush's proposal to revamp the system say no legislation is likely to be passed this year - or next.

By ANITA KUMAR
Published July 19, 2005

WASHINGTON - President Bush's plan to revamp Social Security was already in trouble. Now it looks as though it may be all but dead.

With a divided Congress postponing debate to focus on more pressing issues, people on both sides predict that no bill will pass this year - and that nothing will happen next year, an election year.

"As much as I would like to see something happen, I don't think anything will," said Bill Frenzel, a former Republican congressman who was a member of the President's Commission to Strengthen Social Security. "I thought we had a chance, but I just don't think it's there."

President Bush made his proposal to divert some payroll taxes to investment accounts the top domestic priority of his second term, barnstorming the country, holding more than three dozen meetings since January. He wanted lawmakers to pass a bill by May.

Spring turned to summer; the president continued to hold weekly town hall meetings to make his case, but he hasn't held one in almost four weeks. More pressing issues have gotten in the way, and Congress is postponing debate until at least September.

That doesn't mean Social Security reform is dead, but the Senate and the House each have more timely issues that must be addressed.

The House must vote on CAFTA, Bush's top trade priority, which has sharply divided Congress and may become the first major trade deal to be defeated in more than four decades. Last month, the clock started ticking, giving Congress 90 days to give it an up-or-down vote.

The Senate must hold confirmation hearings to replace Sandra Day O'Connor on the U.S. Supreme Court, a task some lawmakers consider the most important of their terms. Once Bush names his nominee, hearings could start in September.

Congressional leaders, who began debating Social Security in late April, say they are committed to passing legislation but have no consensus. Democrats are against private accounts, and Republicans are divided about how to proceed.

Proposals have been stuck in the Senate Finance Committee. Sen. Charles Grassley, the Iowa Republican who is the committee's chairman, acknowledges that moving on Social Security will be tough.

"There are competing demands for the time of senators and House members, so work will probably continue well after the August recess," Grassley said. "I won't give up trying to bridge the divide."

Senate Majority Leader Bill Frist said Social Security won't come up this month. Will it come up this fall? "I think so," he said, "but I don't know for sure."

Bill Thomas, chairman of the House Ways and Means Committee, had predicted a committee vote on a Social Security bill in June, but last week he said it will be September or later.

"The issue is dealing with more time-sensitive legislation first," Thomas said. Social Security "is not time-sensitive, and we are going to pass CAFTA" before Congress begins its monthlong summer recess in August.

The House and Senate may debate Social Security - and even specific bills - after lawmakers return in September, but even if they do, many say it's unlikely legislation will get far.

"New excuses will arise for not bringing this to the floor in either chamber. You need a graceful exit," said Robert Reischauer, president of the Urban Institute, which opposes private accounts. "Pretty soon, the clock will run out."

Bush spent the first six months of the year campaigning on the need to revamp Social Security. But polls show he has less support for individual accounts now than he had when he started.

An NBC News/Wall Street Journal poll released last week found that public support for diverting payroll taxes to accounts has dropped 7 percentage points since January, to 33 percent, and 57 percent were opposed.

"We didn't do a good enough job convincing people," said Thomas Saving, a former member of the Board of Trustees of the Social Security and Medicare Trust Fund, who supports the accounts. "It's disappointing, but reality has to come in at some point."

Bush held weekly town hall meetings after he unveiled his plan to revamp Social Security in January. His last event was June 23 in Maryland.

But White House spokesman Scott McClellan said last week that Social Security is still a top priority. "It's a high priority for the president, and we continue to work with Congress and urge Congress to move forward to strengthen Social Security," he said.

In the past few weeks, Senate and House members have introduced several bills to create personal accounts as part of or in addition to Social Security. Other proposals are focused more on long-term solvency of Social Security, such as saving money by lowering benefits for higher-income workers.

In its current state, Social Security will pay full benefits only until 2042. After that, only about 73 percent of promised benefits can be paid.

Some people watching the debate think the House could pass a bill and send it to the Senate, perhaps without accounts. But the Senate is sharply divided.

Grassley, who supports the president's plan, hoped to have a committee vote this month. After three full hearings and 15 meetings with Republicans, the committee could not reach a consensus. He said the bill could go straight to floor without committee approval, which would be unusual for such a major piece of legislation.

Conservatives want the accounts and will not accept a proposal without them. Moderate Republicans suggest dropping the accounts and focusing only on solvency. Democrats refuse to negotiate until they get a commitment from House leaders and the White House that accounts are no longer under consideration.

"I don't think it was going anywhere before," said Daniel Shaviro, a visiting fellow who studies Social Security at the conservative-leaning American Enterprise Institute. "I tend to think it's not going anywhere now."

--Times staff writer Bill Adair and researcher Cathy Wos contributed to this report. Anita Kumar can be reached at kumar@sptimes or 202-463-0576.

[Last modified July 19, 2005, 01:09:13]