By Jonathan Weisman and Jim VandeHei
Washington Post Staff Writers
Friday, January 7, 2005; Page A04

Amid deep divisions over the White House push to restructure Social Security, congressional Republicans told President Bush yesterday that the administration is damaging its legislative prospects with leaks signaling the need for deep cuts in benefits.

GOP leaders from the House and the Senate met with Bush at the White House to discuss Social Security, and the divisions were clear, according to participants.

House leaders, backed by House Ways and Means Committee Chairman Bill Thomas (R-Calif.), said the president has to issue a detailed plan to restructure Social Security and add personal investment accounts, then sell it himself before he could possibly hope to get broad Republican support.

"The president has got to lead," said Rep. Jim McCrery (R-La.), chairman of the House Ways and Means subcommittee on Social Security. "He's got to take the bully pulpit on this and be the professor. We can be teaching assistants, but he has to be the big guy."

Senate leaders, backed by Finance Committee Chairman Charles E. Grassley (R-Iowa), said the White House should leave it to Congress to work quietly on a bipartisan Social Security package that is not explicitly the president's.

"Congress has to do the hard work, not put it all on the president," said Sen. Lindsey O. Graham (R-S.C.), a Bush ally who accused some lawmakers of "acting like a bunch of children" hiding behind their father. "If it becomes a Bush bill, I think it would turn into a game of throwing rocks at President Bush."

After four years of speaking about Social Security changes in lofty generalities, Bush found himself this week confronting the difficult specifics.

Even before he became president, Bush had advocated allowing younger workers to divert a portion of their Social Security taxes to personal investment accounts. But he never detailed the cuts to guaranteed benefits that may be necessary to close the gap between the Social Security benefits owed to retiring baby boomers and the taxes paid by a dwindling workforce. Nor has he said how the plan would be financed, since any Social Security taxes diverted to investment accounts would have to come out of benefits owed to current retirees and disabled workers.

Republicans say the fledgling debate has not started on the GOP's strongest ground. Instead of arguing whether younger workers should be allowed to invest their taxes in stocks and bonds, Washington is focusing on the size of the benefit cuts the White House is contemplating, congressional Republicans say.

"We are not prepared to answer" these questions, a senior House GOP leadership aide said of the benefit-cut ideas.

"They don't like the way the case is being laid out," said David C. John, a Social Security analyst at the Heritage Foundation who has close ties to the White House. "There's a feeling that they're leading with their chin."

On Tuesday, The Washington Post reported that Bush had signaled his support for a change in the calculation of Social Security benefits that would cut guaranteed payments by a third to nearly half over the century. Then, on Wednesday, a memo from a top Bush aide leaked out, and it made the case for benefit cuts explicit.

"You may know that there is a small number of conservatives who prefer to push only for investment accounts and make no effort to adjust benefits -- therefore making no effort to address [the] fundamental structural problem" of Social Security, Peter Wehner, Bush's director of strategic initiatives, wrote in a private message to conservative allies. "In my judgment, that's a bad idea."

Instead, Wehner promoted changing the formula that establishes initial Social Security benefit levels, which is based on the growth of wages over a worker's lifetime. Such "wage indexing" has guaranteed robust growth in Social Security benefits because wages tend to grow faster than the economy.

"If we duck our duty, it can have serious short-term consequences," he said in the memo, which first appeared in the newsletter Congress Daily. "If we borrow one to two trillion dollars to cover transition costs for personal savings accounts and make no change to wage indexing, we will have borrowed trillions and will still confront more than $10 trillion in unfunded liabilities. This could easily cause an economic chain-reaction: the markets go south, interest rates go up, and the economy stalls out."

Before getting into the details of a restructuring, Wehner advised Republicans, they should "establish an important premise: the current system is heading for an iceberg."

The memo was supposed to head off efforts by some Republicans to push for personal accounts, without any benefit cuts. But its wide circulation has been a gift to Democratic opponents of Bush's Social Security initiative, congressional aides from both parties said.

"Social Security is America's promise to those who work hard and play by the rules that their retirement will be secure," Senate Minority Leader Harry M. Reid (D-Nev.) said in a statement. "If, as this private memo indicates, the President is intent on breaking this promise -- and his own public pledge -- by cutting benefits, he needs to stand up and tell the American people himself about his plan, when it will go into effect, who will be affected and how much benefits will be cut."

"The real face of the Republicans' Social Security 'reform' agenda: First, scare. Second, cut. Third, privatize. Now that's a reform agenda," Rep. Rahm Emanuel (D-Ill.), a House Ways and Means Committee member, said in a statement.

"It's not an ideal start," said a former White House official who maintains strong contacts with Bush's staff.

In yesterday's meeting, Bush promised to visit many districts to explain what he sees as the Social Security crisis and to discuss his solution, according to a House GOP leadership aide who was briefed about the meeting. Lawmakers warned Bush that he had has to explain the problem better before floating controversial solutions such as benefit cuts.