washingtonpost.com  > Politics > Bush Administration

Bush Warns Democrats About Opposing Accounts

By Michael A. Fletcher and Jim VandeHei
Washington Post Staff Writers
Wednesday, March 23, 2005; Page A03

ALBUQUERQUE, March 22 -- President Bush concluded a three-state swing to sell his plan to restructure Social Security, warning Democratic opponents Tuesday that they will suffer political consequences if they continue to oppose his proposal without providing one of their own.

Flanked by Republican Sens. Pete V. Domenici (N.M.) and John McCain (Ariz.), Bush invited Democrats "to come to the table" to help devise a solution to shore up Social Security's finances. "I believe there will be bad political consequences for people who are unwilling to sit down and talk about the issue," he said.

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McCain has been especially supportive of his onetime rival, appearing with Bush at three events over the past two days in trying to prod Democrats into negotiations to include private accounts in a plan to revamp Social Security. The popular senator said that the nation's aging population makes it impossible for Social Security to pay promised benefits far into the future unless fundamental changes are made in the program.

McCain said he supports Bush's plan to allow workers to divert nearly a third of their Social Security taxes into personal accounts. Although those accounts will not address Social Security's long-term funding problems, he said, they do provide "an important link to the future" by allowing workers to supplement Social Security checks with money earned in the stock and bond markets.

The accounts would buffer future retirees against cuts in Social Security payments that would be certain to accompany them. McCain said some critics have played down the severity of Social Security's financial crisis, but he maintained that now is the time to act. "The longer we wait, the more draconian the changes will have to be," he said.

McCain also challenged opponents of Bush's plan, including the advocacy group AARP, to enter negotiations on Social Security. He said they are recklessly minimizing the fiscal problems looming for the nation's retirement system.

"Some of our friends, who are opposing this idea, say, 'Oh, you don't have to worry until 2042.' We wait until 2042, when we stop paying people Social Security?" he asked.

Bush's two-day trip to Tucson, Denver and Albuquerque came as the White House is intensifying efforts to sell his plan for revamping the 70-year-old retirement and disability program. Bush has visited 17 states since his Feb. 2 State of the Union address, and other administration officials have been fanning out across the country to make the case for revamping Social Security.

Vice President Cheney traveled on Tuesday to the back yard of Senate Minority Leader Harry M. Reid (Nev.), who is leading Democratic opposition to the plan, to promote the administration plan and chide critics for refusing to confront the fiscal threats to the nation's retirement program.

At a town hall meeting in Reno, Cheney said several Democrats have privately told him they are willing to strike a deal on Social Security at the appropriate time. "The approach that we have seen that has been adopted publicly by both Nancy Pelosi, the House Democratic leader, and Harry Reid . . . has been initially no" to everything, he said. "I think we are beginning to chip away at that."

In response to a question, Cheney raised the prospect that Social Security survivors' benefits "could be addressed" as part of the broader debate. That differs from the stated position of Bush, who in an interview with The Washington Post this year said he had no plans to make changes that would affect Social Security benefits for the disabled or the survivors of deceased workers.

Despite the administration's sustained pitch, the idea of carving private accounts out of the Social Security system still faces nearly unanimous opposition from Democrats. They point out that the plan would add trillions to the national debt, which the Bush administration has acknowledged. Also, they say, the plan would replace some of Social Security's government-guaranteed income with benefits tied to the financial ups and downs of the markets.

Many Republicans in Congress are leery of changing a program that has proved so popular with Americans.

Also, opponents say they are unwilling to entertain the idea of personal accounts because they would take more money out of a Social Security system facing a cash deficit. They say the system's core problem -- that benefit payments are estimated to surpass tax receipts by 2018 -- could be addressed through a modest mix of tax increases, targeted benefit cuts and changes in the retirement age.

"There is no need for a radical restructuring," said John Rother, policy director for AARP, which is running newspaper and television ads in opposition to Bush's proposal.

During his appearance here Tuesday, Bush said that private accounts would allow more workers to reap the financial benefits that the markets could provide, and that the accounts would make workers more attuned to government policy.

"All of a sudden tax policy, spending policy, debt policy -- all of a sudden it makes a lot more sense to you if the effects of government affect your asset base," he said. "Secondly, I think it makes a lot of sense for people just to watch things grow. And we want that extended throughout our society."

VandeHei is traveling with Cheney.


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