Another major Wall Street player has dropped out of a business coalition that supports President Bush's restructuring of Social Security.
The Financial Services Forum, an association of 19 chief executives of large financial services companies, has decided to withdraw from Compass, the group that is leading industry's effort to gin up support for the president's plan outside the Beltway.
"We did not have the assent of our membership to rejoin," said Ken Trepeta, a vice president of the forum. "We did not send in the form to be listed."
The forum is the third defection in a month from business-led Social Security coalitions. Waddell & Reed Financial Inc., a Kansas-based money management company, and Edward D. Jones & Co., a Missouri-based brokerage, withdrew from the Alliance for Worker Retirement Security. The alliance, a sister organization to Compass, focuses on direct lobbying of Congress on behalf of Bush's proposal, which includes private accounts as part of Social Security.
The moves are a blow to Bush's effort. The White House is relying on coalitions such as Compass and the alliance to help persuade lawmakers and the public to rally behind the president's plan. Wall Street groups have been leaders in the fundraising for those drives.
Organized labor and the AARP, the senior citizens lobby, have been raising and spending amounts that rival the business coalitions and their allies, but neither have had to contend with similar discontent in their ranks.
Edward Jones and Waddell & Reed resigned after the AFL-CIO and other unions held demonstrations in front of their offices and after union trustees of pension funds had sent them angry letters about their support for the president's plan. Trepeta said the forum, some of whose members also received union letters, didn't back out of the coalition because of union pressure.
Compass, which stands for Coalition for the Modernization and Protection of America's Social Security, was all but dormant until Bush decided this year to make overhauling Social Security his top domestic priority. Until recently, the forum was listed on Compass's Web site.
But last month, Trepeta said forum members met to discuss its policy views on Social Security and decided that it didn't have a consensus to keep up its membership in Compass. It decided it would continue to support changing Social Security "sooner rather than later" but declined to advocate private investment accounts.
Wall Street firms have generally backed private accounts, though quietly, fearing that their enthusiasm might make them a target for labor-union rebukes and also undercut Bush's proposal.