Wary Words On Social Security

GOP Shunning Use Of 'Privatization'

Republican congressional leaders, bracing for Democratic attacks on the issue of Social Security this fall, are drafting plans for a House vote against "privatizing" the system. The strategy, they hope, would insulate them from voter anger without directly repudiating President Bush's proposal to allow private investments of some, but not all, Social Security contributions.

Such a vote would underscore Republicans' ongoing concerns about being associated with changes in the popular retirement program, even though Bush made an overhaul of Social Security a campaign centerpiece. Some GOP consultants are urging their candidates to avoid using the word "privatization" and to challenge their opponents to be specific about how they would keep the system solvent without embracing changes of some sort.

Bush's proposal generally is described as a "partial privatization" of Social Security. The House GOP plan, if carried out, would let lawmakers go on record as opposing "privatization" without voting on the White House plan's details. Democrats call the gambit a fraud, and many seem determined to highlight the issue in the November elections.

Bush wants to allow younger workers to invest part of their Social Security taxes in private accounts, which might include stocks and bonds. Democrats say that would subject future benefits to the whims of Wall Street, which they consider an unacceptable risk.

Republican lawmakers, facing a fall election with control of the House and Senate in question, urged the White House months ago not to press for a vote on the issue this year. The administration agreed, and many assumed the matter was quiet for a while.

But a nationwide series of polls and focus groups about Social Security has convinced Republicans that they remain vulnerable to accusations that they have, as one top Democrat put it, "a secret plan to cut benefits after the election."

So key House Republicans now are moving toward declaring themselves against complete privatization -- a deliberate exaggeration of what Bush proposed -- so they can say in campaign ads they oppose the idea and perhaps even sue opponents who accuse them of it. Several GOP leaders support the proposed resolution, but a decision has not been made.

"Democrats always say, 'Congressman X is going to cut your Social Security and turn it over to Wall Street,' " said Terry Holt, spokesman for House Majority Leader Richard K. Armey (R-Tex.). "That is a lie, and with a legislative record to back them up, members can defend themselves."

A commission appointed by Bush proposed in December that the government establish voluntary personal retirement accounts in which workers could deposit up to 4 percent of their payroll taxes, in some cases with a limit of $1,000 a year. The commission, which left leeway for Congress by offering three possible structures for the funds, said the accounts would have the benefit of "providing participants with assets that they own and that can be inherited."

Social Security benefits now are paid to retirees from payroll taxes levied on current workers, and accounts don't follow individuals as they age.

The Bush plan has been interpreted by many as the creation of private, earmarked accounts. But on Monday, Republicans plan to launch a party-wide effort to distance themselves from the word "privatization."

A Capitol Hill source said Stephen Schmidt, communications director of the National Republican Congressional Committee, will e-mail candidates and party leaders with a warning not to use the word, saying it "carries connotations of dismantling the publicly run Social Security system, or sending participants out to fend for themselves."

"It is extremely important that Democrats not be allowed to characterize GOP support of personal savings accounts as privatization," the e-mail says. "It is an imprecise and misleading description. . . . Do not be complicit in Democratic demagoguery."

Rep. Robert T. Matsui (Calif.), the top Democrat on the Social Security subcommittee of the House Ways and Means Committee, called the idea of a GOP resolution opposing privatization "Orwellian." Under Bush's plan, he noted, funds in the personal accounts would be invested by individuals rather than the government.

House Minority Leader Richard A. Gephardt (D-Mo.) said he considers the Republican efforts to repudiate privatization to be a "fraud." Gephardt has introduced the Bush commission's recommendations as a House bill and wants to gather enough signatures to force a vote on it this summer.

"They're desperately trying to avoid a real debate about the issue," Gephardt said. "Our worry is that if they win the election, they'll really do what they say they're not going to do."

Bush has continued to talk about the issue publicly. Because of expected Democratic attack ads, one aide said, "We're going to have to talk about it in October whether we want to or not, so we might as well lay the groundwork."

Also, White House officials said Bush is intent on pushing the legislation next year, especially if the GOP has majorities in both chambers. Bush said last month in a speech about his philosophy of government: "Our reforms in Social Security must allow and encourage and help working Americans to build up their own asset base and achieve independence for their retirement years."

A strategy memo for the AFL-CIO, the nation's largest labor organization, says Enron Corp.'s bankruptcy and the bear-market decline in the value of many private retirement funds have left more people "worried about a change in Social Security that could leave some seniors in dire circumstances after making poor investment choices."

The Republican efforts to shun "privatization" mirror advice provided in a series of Capitol Hill briefings by Public Opinion Strategies, a GOP polling firm. The firm's partners recommend that Republican candidates "communicate a consistent, focused message on Social Security" that includes frequent use of the word "control."

"An important appeal is you, not the government, are in control of your money," the firm advised lawmakers in a PowerPoint presentation. "Don't say 'privatization.' Instead say 'personal retirement accounts.' "

The firm recommended that GOP messages on Social Security include "constant acknowledgment of the importance of Social Security to seniors and near-seniors (55-64 year olds)" and that "candidates/ads must REPEATEDLY say that the candidate will NEVER support any plan that would cut Social Security benefits (for those on/about to receive benefits)."

The resolution, if successful, could complicate Republican efforts to pass Bush's plan into law. But administration officials say they understand the need to cope with what they consider Democratic scare tactics. "It's clear the Democratic slogan is going to be, 'Boo!' " one official said.