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Social Security Debate
Is President Bush Backing Off Private Investment
Accounts?
Speaking to reporters he emphasized plans to maintain
Social Securitys solvency
March 3, 2005 The Social Security ball was
bouncing all over Washington today but there seem to be some indication
that President Bush is changing his emphasis to assuring the solvency of
the program and away from adding private investment accounts. But, at
the White House, spokesman Scott McClellan was sticking with the private
accounts. There were other major moves, too. Republican Senate Leader
Bill Frist said he was misquoted about saying he would delay a vote on
Social Security until next year and Republican Sen. Chuck Grassley said
the private accounts proposal was distracting to the issue of saving
Social Security.
In answering a reporters question about progress
his Social Security reform program, Bush did not mention the private
investment account proposal he has been touting, but which is doing
poorly in public opinion polls.
The problem is, in 2018, the system starts losing
money. In 2027, it's $200 billion in the hole and it gets bigger every
year thereafter, Bush said.
People are beginning to say, we have a problem.
The next phase, when people say we have a problem, is going to be, what
are you going to do about it? And I'm willing to put out some ideas
about what to do about it, he added.
At a press briefing in the White House by Press Secretary Scott
McClellan, a reporter asked for a response to suggestions by Senator
Grassley that the focus should shift away from private accounts and to
the solvency of the system.
Senate Finance Committee Chairman Charles Grassley
said yesterday that Bush's private accounts proposal was "detracting"
from the debate about the retirement's program's long-term solvency.
"Maybe we ought to focus on solvency and bring
people to the table just over what do you do for the solvency for the
next 75 years," he said.
Grassley said he supports individual accounts, but
wanted to tackle Social Security this year on a bipartisan basis.
We share that, responded McClellan to the
reporters question. The President has made it very clear that we need
to make Social Security permanently sound. That's what he's talking
about.
He added, however, And as we move forward to save
and strengthen Social Security, he (Bush) believes personal accounts are an
important part of any comprehensive solution. The President has clearly
outlined his principles for strengthening Social Security. We know that
the current system is unsustainable. It faces an unfunded liability of
more than $10 trillion, and that is why we need to act now so that we
don't pass on this unfunded liability to our children and
grandchildren.
And, later McClellan again brought up the private
accounts, And the President believes that as part of comprehensive
reform, we need to include personal accounts, so that younger Americans
can have the option of realizing a rate of return that is closer to what
is being promised, because right now the promised benefits of the future
are an empty promise. They will not be there under the current system.
There is speculation that the strategy is shifting
after Republican Congressman returned this week from the visits home to
promote the private investment accounts and reported less than glowing
reports about the public response they met.
The polls, too, are showing declining support for
the idea. A New York Times/CBS News poll released today shows 51 percent
said diverting Social Security taxes into private investment accounts
was a bad idea.
Those opposed to the plan rose to 69 percent when
told that private accounts would result in a reduction in guaranteed
government benefits. Another poll released on Wednesday by the Pew
Research Center shows public support has declined steadily since
December.
When asked about the polls, McClellan said, I
think that you're seeing in the surveys, the American people are
understanding the serious problems facing Social Security.
In his State of the Union address, the President
spent a good portion of that address highlighting the challenges facing
Social Security, and highlighting the fiscal problem at the heart of the
Social Security debate. And so this is an education period that we're in
right now, where we're reaching out to the American people, where we're
discussing it with members of Congress, and I think you're seeing that
important progress is being made there.
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