More attractive has been the ultimate "tinkerer" plan from Robert M. Ball, a former Social Security commissioner. Rep. David R. Obey (Wis.), the ranking Democrat on the House Appropriations Committee, has made Ball's plan his own, and its nip-and-tuck approach to the problem has influenced the stance of AARP, the powerful retirees' lobby.
Ball would take four initial steps: lift the cap on taxable wages to 90 percent of all earnings, or about $145,000; slow annual cost-of-living benefit adjustments; cover newly hired state and local government workers; and dedicate all inheritance taxes levied on estates worth more than $3.5 million to Social Security.
Graphic: A review of some alternative proposals to reform Social Security and how the compare to President Bush's plan.
Those steps would ensure full Social Security benefits through 2078, the Social Security actuary concluded. If funds should fall short, Ball would fill the gap through slight increases in payroll tax rates.
The Conservative Response
The real passion for changing Social Security comes from conservatives, who believe the bigger the change the better.
"I don't see an excited middle right now. I see a reluctant [Republican] leadership and activists pushing them," said Michael Tanner of the libertarian Cato Institute.
The ultimate private-account plan belongs to Peter J. Ferrara, a longtime advocate of Social Security's partial privatization. Under Ferrara's approach, adopted by Sen. John E. Sununu (R-N.H.) and Rep. Paul Ryan (R-Wis.), and also by such activists as former House speaker Newt Gingrich and conservative organizer Grover Norquist, personal accounts would average 6.4 percentage points of the 12.4 percent Social Security tax, considerably larger than Bush's proposed 4 percentage-point diversion.
Like the Bush proposal, Ferrara would offset contributions to voluntary private accounts with equal cuts to workers' base Social Security benefit -- what workers see as a monthly, guaranteed check. But under Ferrara's plan, the accounts would be so big that participating workers beginning their careers this year could expect to have no basic Social Security benefit left by retirement, according to a Social Security actuarial analysis.
On the plus side, Ferrara says, the accounts would grow so quickly that they would more than make up for the lost benefit, disputing a contention shared by the White House that personal accounts alone cannot solve Social Security's problems.
On the downside, the accounts would cost nearly $7 trillion over 75 years, almost twice Social Security's cash deficit over that period. That's because diverting such a large percentage of payroll taxes to private accounts for future retirees would leave the government short of the cash it needs to pay current beneficiaries.
Ferrara said much of that cost would be met by cuts in government spending and added tax collection buoyed by the plan's impact on corporate profit growth.
There are any number of other iterations. In the mid-1990s, Federal Reserve Board Governor Edward M. Gramlich embraced a compromise proposal to reduce the growth of benefits by setting the retirement age at 67, then raising it as longevity increased. On top of that, workers would have to contribute an additional 1.6 percent of their wages subject to the Social Security tax into private accounts -- an "add-on" to the base Social Security system to supplement a trimmed-down benefit. Such an add-on approach is rapidly becoming a Democratic party line.
"At some point, if we need votes on other side of aisle, we will have to look at which [plan] would the Democrats reach out to," said Shaw, who has his own add-on proposal. "And clearly, it's an add-on."
Robert Pozen, a Massachusetts financial executive who served on Bush's Social Security Commission, has proposed his own compromise. Like the president, he would carve private accounts out of the payroll tax, but he would limit their size to 2 percent of taxable earnings, considerably reducing government borrowing. To answer Democratic concerns, he would structure benefit cuts to hit the affluent the hardest, while shielding poorer workers from any cuts at all.
Another partial solution? Immigration. The United States could shave 10 percent off the projected $3.7 trillion gap between Social Security taxes to be paid and benefits already promised simply by allowing 264,000 additional immigrants into the country legally in each of the next 50 years, according to a study released this week by the National Foundation for American Policy, a pro-immigration group.