After watching the Social Security debate from the sidelines, House Republican leaders yesterday embraced a new approach to Social Security restructuring that would add individual investment accounts to the program, but on a much smaller scale than the Bush administration favors.

The new accounts would be financed by the Social Security surplus -- the amount of payroll tax revenue not needed to pay current benefits. That money is now used to fund other government activities and is expected to run out after 2016 as the baby-boom generation retires.

By contrast, President Bush's proposed accounts would divert payroll taxes used to fund existing Social Security benefits, which would force the government to borrow to prevent cuts in retirees' monthly checks. Once fully phased in, the Bush plan would allow workers to sock away $3,600 a year in today's dollars. Even in its peak year, the new plan could limit average account contributions to as little as $588.

Still, Republicans hope the new proposal will shift the debate away from future benefit cuts, as Bush envisions, to ending what they call the "raid" on the current Social Security surplus. But the plan, unlike Bush's, would do nothing to remedy the New Deal-era program's long-term fiscal problems.

An aide to House Speaker J. Dennis Hastert (R-Ill.) called the bill "a great start," and House Majority Whip Roy Blunt (R-Mo.) called it "an excellent first step." Aides said leadership will gauge reaction over the July 4 break.

Rep. Eric I. Cantor (R-Va.), the deputy House majority whip, called it "a breakthrough day," and Sen. John E. Sununu (R-N.H.) said the announcement was a victory simply because "there is movement" on a plan that many on Capitol Hill had written off as dead. But Democrats were vociferous in their condemnation, and some Republicans in the Senate remained doubtful.

Rep. Paul Ryan (R-Wis.), an ardent backer of personal accounts, said the current system in which surplus money in the Social Security system is used for general government spending "papers over the true size of the debt, and what this proposal does is unmask the debt."

"When the program is up and running, Congress will be faced with decisions whether to borrow, raise taxes or cut spending, which is what we should be faced with," Ryan said.

The new House initiative comes as public opposition to Bush's plan continues to grow and the Senate stands at an impasse, while House leaders have increasingly shown a reluctance to bring to a vote any plan that cannot be enacted.

Bush has made Social Security changes the centerpiece of his second-term domestic agenda, but it has proved far more difficult than White House officials had anticipated. Although the new plan is considerably less broad than Bush's approach, it would still fundamentally change the way the Social Security system operates.

This year, Social Security will bring in $69 billion more in taxes than the system pays in benefits. Congress will borrow that money to fund other programs and then send $69 billion worth of Treasury bonds to the Social Security Administration. Those bonds would be cashed to finance benefits once the system slipped into deficit.

Under the new proposal, those bonds would go to private investment accounts that would be opened for workers unless they chose not to participate.

After a holding period, holdings could be diversified into other options such as stocks, based on a plan to be submitted to Congress by an administrative board that would manage the accounts. The balance of the accounts, plus interest, would eventually be subtracted from a retiree's traditional Social Security benefit. The system, as proposed, would operate only as long as Social Security ran a cash surplus -- or just more than a decade. The accounts would remain, and they could be inherited.

A nearly identical bill will be introduced in the Senate today. Republican strategists said the new plan is a way to pressure Democrats to negotiate, and to portray movement. The idea was embraced as a palatable step by House leaders, most of whom have been jittery about pursuing a restructuring of Social Security as they head into midterm elections that Republicans believe may be the toughest the party has faced in 10 years.

"We just simply take the surplus that's coming into the Social Security trust fund now, and we convert it to Treasury bills for all the American workers," said Rep. E. Clay Shaw Jr. (R-Fla.), senior member of the Ways and Means Committee.

But critics say there is not enough money to make the plan viable. About 130 million Americans who pay into Social Security and are under 55 would be entitled to personal accounts. Excluding interest owed on borrowed Social Security funds, the cash surplus from Social Security taxes this year will leave enough for an average of $434 available for each account.

The Social Security Administration projects that, at its height in 2008, the cash surplus will reach $97 billion, an amount that about 165 million workers would have to share, leaving an average of $588 each. But that cash surplus would decline rapidly to zero after a decade. By 2016, all that would remain is $40 per account.

"You'd launch a proposal without any means of perpetuating the funding," said Robert L. Bixby, executive director of the Concord Coalition, a budget watchdog group.

House Republicans said the plan would extend solvency from 2041 to 2043 because the amount in the accounts would reduce the trust fund's obligation, according to a preliminary analysis by the Social Security Administration.

If the size of the accounts would be small, the cost to the government would not, said Jason Furman, an economist at the liberal Center on Budget and Policy Priorities. The proposal would add $600 billion to the federal debt over the next decade, assuming that two-thirds of eligible workers take accounts. The plan would not cut benefits, and the cost to taxpayers of administering minuscule accounts could be huge.

Furman said the plan would push the program to insolvency two years faster than doing nothing, because of administrative costs and the amount that was inherited.

"This is the worst of all worlds," he said. "It has all the problems of any private accounts proposal with none of the benefits for solvency."