The effort by Sens. Bob Kerrey (D-Neb.) and John C. Danforth (R-Mo.) to restrict the growth of Social Security and other costly entitlement programs ran into overwhelming resistance yesterday, all but dashing hopes the bipartisan commission on entitlement reform could reach agreement.
Kerrey, chairman of the commission, insisted bold, politically risky action was essential to avert the long-term bankruptcy of the Social Security system and bring other entitlement spending under control. The commission was appointed by President Clinton to offer recommendations for action when a new Congress begins work Jan. 4. But by the end of a long, contentious public session of the 32-member commission, a frustrated Kerrey acknowledged he was "highly skeptical" he could attract more than "four or five votes" for the proposal.
"Democracy doesn't do very good in solving long-term problems," he said. "We function better when there's a crisis. Do it manana... . Now if you want to go out and give a speech about taking care of your children and your grandchildren, go ahead and give it. But don't count on me not to call you a hypocrite."
The commission is scheduled to take a final vote on a proposal Wednesday before officially disbanding. Kerry said it was unlikely he would consider seeking an extension of the commission's charter unless it became clear members were near a compromise. But there appeared so little interest in forging an agreement that more than half the commissioners skipped the meeting.
Meanwhile, incoming House speaker Newt Gingrich (R-Ga.) said yesterday he would find unacceptable any proposal of the entitlement and tax reform commission that included reductions in Social Security benefits. House Republicans have pledged to protect Social Security from cuts in attempting to balance the budget by the year 2002.
"I think Social Security is off the table for the foreseeable future," Gingrich told reporters. "We have so many other more pressing and more immediate problems that we ought to focus on the ones that are immediate, not the ones that are 20 years out."
The Kerrey-Danforth plan formally unveiled yesterday would result in substantial reductions in Social Security benefits for future beneficiaries by raising the retirement age from 65 to 70 over 30 years and altering the way benefits are computed. The proposal would increase premiums and raise retirement age for Medicare coverage, and also reduce and cap spending for other entitlement programs.
Another key feature would reduce the Social Security payroll tax by 1.5 percent and require workers to invest those tax savings in Individual Retirement Accounts to supplement pension and retirement benefits and give them "more choice and more control" over their finances. Also, the plan would limit itemized deductions to 28 percent of adjusted gross income for couples making more than $91,850 a year, a measure that would have the effect of restricting writeoffs of interest on home mortgages and state and local property taxes.
Kerrey and Danforth, commission co-chairman, devised the plan after months of public hearings and what other commissioners described as minimal consultation. Yesterday, the two senators sat stony-faced as other members took turns picking apart the plan or urging delay in action.
United Mine Workers President Richard L. Trumka called the plan "the most fundamental attack on Social Security and Medicare since their beginning." Thomas J. Downey, a former Democratic House member, said the proposed changes in Medicare "not only go too far" but were unacceptable to Congress and most Americans. Robert Greenstein of the Center on Budget and Policy Priorities warned of "unintended consequences" of the plan that could produce larger reductions in Social Security benefits than Kerrey and Danforth assumed.
Even some commission members sympathetic to the pair's efforts voiced reservations. Peter G. Peterson, a Wall Street financier and former Republican commerce secretary, hailed many provisions, particularly a plan he has championed for means-testing Medicare, unemployment insurance and other entitlement programs. However, Peterson, a leader of the Concord Coalition, an anti-deficit lobby, complained the effective date for many provisions was put off until the turn of the century to appease current retirees.
"To what extent are we sparing everyone over the age of 55 while piling it on those under the age of 30?" he said. "The plan is too delayed and could add to the publics's cynicism of our purpose."
Bob Denham, chairman and chief executive officer of Salomon Brothers, was one of the few commission members to endorse the plan. He said the proposal was better than any of the options under consideration for dealing with severe long-term budget and deficit problems that are being fueled by an aging population and rising health care costs.
Before the meeting, the AFL-CIO, NAACP, American Association of Retired Persons and other groups launched an all-out attack against the plan, charging it would devastate the Social Security and Medicare systems.
"Some of the options the entitlement commission will consider today, if implemented, would be a disaster for the working people who depend on programs like Social Security and Medicare to make ends meet when they retire," said Tom Donohue, AFL-CIO secretary-treasurer.
NAACP Washington Office Director Wade Henderson said the proposed changes would hit blacks, other minorities and women the most, since they have lower incomes during working years and must depend more on Social Security.
Government statistics show Social Security is the largest source of cash income for the elderly, providing 40 percent overall, but for most it provides an even larger share. Three-fifths of the elderly get at least half their income from Social Security.