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Social Security Plan Draws Fire

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  • By Amy Goldstein and George Hager
    Washington Post Staff Writers
    Wednesday, February 24, 1999; Page A2

    Even as GOP and White House officials pledged a new era of cooperation yesterday, President Clinton's proposal to preserve Social Security was drawing fire from key Republicans and federal fiscal experts.

    In the month since Clinton called for the most fundamental changes in the history of the nation's retirement system, the plan he hoped would become common ground for reform has, instead, become a lightning rod for controversy.

    The latest skeptic stepped forward yesterday, as the new director of the Congressional Budget Office warned that the president's approach will not prevent the nation's retirement system from running out of money beginning in about a decade.

    "The president's proposal does not change any realities of Social Security," CBO Director Dan L. Crippen told members of the Senate Budget Committee. While praising the president's effort to use Social Security funds to help pay off the federal debt, Crippen and his top deputy rejected the idea that the plan would keep the system solvent until the middle of the next century, without major changes in the program itself.

    In his first direct public appraisal of the White House plan, Crippen – the chief budget analyst for Congress – became the third head of a federal agency to condemn aspects of Clinton's approach to shoring up Social Security, joining Comptroller General David M. Walker, who runs the General Accounting Office, and Federal Reserve Chairman Alan Greenspan.

    Their skepticism has had a potent effect as lawmakers begin this week to shift their attention from impeachment to the substantive issues before the 106th Congress, with both parties vowing to make the preservation of Social Security their top domestic priority for the year.

    The experts' critiques play into the hands of congressional Republicans, who have leveled assaults on the White House proposal in hopes of gaining the upper hand on the issue.

    In part, the waves of criticism reflect the sheer complexity of the White House's plan, which hinges on intricate accounting methods to prolong the solvency of Social Security from 2032, when it is predicted to go bankrupt, until 2055.

    In addition, the criticism reflects real philosophical differences between the two political parties on how best to ensure the nation's elderly a secure retirement.

    The White House plan "doesn't save Social Security. . . . It is bad economics and it is bad politics," Sen. Charles E. Grassley (R-Iowa) said at yesterday's budget committee hearing.

    Despite the heavy criticism, Clinton's approach remains the dominant plan before Congress at a time when Democrats and Republicans insist they are wedded to finding a bipartisan approach to overhauling the program. It has attracted support from some congressional Democrats and outside policy experts.

    And for all their barbed rhetoric against the White House, House and Senate GOP leaders have essentially acceded to Clinton's fundamental demand to set aside more than 60 percent of future budget surpluses for shoring up the program's trust fund, crimping GOP plans to use some of that money for major tax cuts.

    Furthermore, GOP leaders have not yet agreed on a detailed course of their own. In both the House and the Senate, Republicans are drafting what they hope will be a markedly different approach that would move the program toward individual retirement accounts. Already, some Democrats are suggesting that those measures may employ the same accounting methods for which the GOP now is criticizing Clinton.

    For the moment, it remains unclear whether the GOP skepticism is lethal or simply the preliminaries to getting down to work. Social Security Commissioner Kenneth S. Apfel predicted yesterday that the GOP posturing is "Act One of a serious engagement."

    After debating for months whether to set forth an administration proposal, Clinton announced the outlines of a reform plan in his State of the Union address last month. In addition to devoting the surpluses to Social Security, the proposal calls for investing a relatively small part of the program's trust fund in the stock market for the first time.

    It also would give Americans seed money to open their own retirement accounts.

    The basic premise of the president's plan appears to enjoy widespread public support. About three out of five Americans favor the idea of using some of the budget surpluses to shore up the program, according to a new poll conducted for Americans Discuss Social Security, a nonpartisan group.

    Yet the poll also shows that most voters agree with critics like Crippen that surpluses alone will not be enough to salvage the program and that the government will need to take more painful steps, such as cutting benefits or raising taxes. The public does not believe there is "an easy way out," said Carolyn Lukensmeyer, the group's executive director.

    Gene Sperling, the president's chief economic adviser, sounded undaunted by the recent flurry of criticism.

    "While certainly you can expect the normal arrows to be fired from those who have different priorities," Sperling said, "the president's framework is holding well."

    © Copyright 1999 The Washington Post Company

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