Bush pushes social security for future's poor
(Agencies)
Updated: 2005-04-29 09:30

US President Bush urged Congress on Thursday night to tilt the Social Security system to benefit low-income retirees of the future as part of a plan to shore up the program's finances.

At a prime time news conference, Bush said he envisioned a plan under which all future retirees could "count on a benefit equal to or higher than today's seniors," a formula that left open the possibility that guaranteed benefits for middle and upper income seniors could be cut in later years to bring Social Security's finances into balance.

President Bush gestures during a news conference Thursday, April 28, 2005, in the East Room. [AP]

Republicans officials had said in advance that the president would prod lawmakers to embrace a plan that would curtail benefits for middle and upper income retirees of the future, but he did not directly address the issue in opening remarks.

Facing reporters in the East Room of the White House, Bush also pledged his effort to address rising energy costs. "There will be no price gouging at gas pumps in America," he said. The House has approved energy legislation, and a companion measure is awaiting action in the Senate. Bush said he wanted a bill on his desk by summer.

Bush also urged the Senate to take "up or down" votes on his controversial nominees to the appeals courts. Democrats filibustered 10 of his first-term appeals court nominees, blocking confirmation votes on them. Bush has renominated seven of the 10, and Democrats have threatened to attempt to block them once more.

Nearing the end of a 60-day campaign for Social Security overhaul, Bush renewed his call for Congress to pass Social Security legislation that allows younger workers to create personal accounts with a portion of their payroll taxes.

"The money from a voluntary personal retirement personal account would supplement the check one receives from Social Security," he said.

White House officials have repeatedly told congressional officials that Bush's plan envisions cuts in future guaranteed benefits as part of an attempt to achieve permanent financial solvency. Bush made no mention of that in his opening remarks.

Bush did not go into details in his proposals for Social Security, an attempt to satisfy calls from Republicans in Congress to provide lawmakers with guidance without appearing to dictate to them.

His call for Social Security legislation has faced intense debate in Congress, where Democrats criticize his proposal for personal accounts as privatization of a program that provides benefit checks to millions each month. Republicans in both houses are skittish about embracing the idea, and despite Bush's energetic nationwide campaigning polls indicate lagging public support.

Sen. Charles Grassley (news, bio, voting record), R-Iowa, chairman of the Senate Finance Committee, who presided over one hearing on the issue this week, intends to call a second session next month and try to push a bill through the panel by the end of July.

Bush has referred positively before to a proposal by a private economist to alter the benefit structure to make it more favorable to lower-income recipients at the same time enabling the overall program to remain solvent into the indefinite future.

"There are some interesting ideas out there," Bush said at a news conference in March. "One of the interesting ideas was by this fellow by the — a Democrat economist named of Pozen. He came to visit the White House. He didn't see me, but came and tossed some interesting ideas out, talking about making sure the system was progressive."

Robert Pozen, a Democrat and former economic adviser to GOP Gov. Mitt Romney of Massachusetts who now is with MFS Investment Management, has suggested that Social Security no longer tie retiree benefit payments solely to wages. Instead, he has suggested pegging future benefits for some retirees to prices, which historically rise more slowly than wages.

Pozen suggested retaining the current benefit structure for workers retiring in 2012 and later with career earnings of $25,000 or less. Workers retiring the same year or later with earnings of $113,000 or more would receive benefits pegged to prices, meaning they would be lower than currently guaranteed. The benefit system would be a blend of the two approaches for workers with income between $25,000 and $113,000.

It is unlikely that Congress will enact Pozen's proposal intact, but Bush's remarks indicated renewed interest in an approach that prominent Republicans in Congress have also found attractive.

According to the most recent estimates, Social Security benefit payments will outstrip payroll tax payments into the trust fund in 2017, and beginning in 2041, the trust fund will be depleted. At that point, benefits would automatically be cut.

White House officials said Bush would talk about energy as well as Social Security in his opening remarks.

While the president opened his second term boasting he had political capital to spend, he's now on the defensive on a range of issues. His job approval has slumped since his second-term inauguration; a majority of people oppose his approach to Social Security and more than 60 percent of Americans disapprove of his handling of energy problems amid skyrocketing gasoline prices.

It was only the fourth prime-time news conference of his presidency, and the White House asked television networks to broadcast it live — a request that some found hard to swallow. Thursday was the first night of the May ratings "sweeps," a barometer watched closely to set advertising prices. It also tends to be one of the most lucrative nights for the networks in terms of advertising revenue.

On energy, Bush was expected to push Congress to pass his long-stalled energy plan. Soaring oil and gasoline prices are beginning to take a toll on U.S. economic growth. The Commerce Department reported Thursday that the economy grew at an annual rate of just 3.1 percent in the first three months of the year, the slowest pace in two years.

Bush's appearance preceded Sunday's close of a 60-day blitz by the administration to build support for overhauling Social Security. The White House pronounced the first phase a success because it convinced Americans there are serious problems facing the program.

House Minority Leader Nancy Pelosi, D-Calif., said Bush's cross-country sales job has been "a dismal failure."

"What I'm hoping" is that he will say "Uncle" about his privatization plan, she said. The White House shot back that Democrats are behaving as the do-nothing party with no ideas to offer.

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