Nickles Looks to Social Security for Budget Savings

The next chairman of the Senate Budget Committee wants Congress to consider finding savings from the government's popular and politically sensitive benefit programs — which include Social Security and Medicare — during its hunt for budget savings.

Sen. Don Nickles, R-Okla., provided no specifics and cast doubt on whether he would include such proposals in his first budget, which he will produce early next year.

But in an interview with The Associated Press, Nickles said slowing the growth of the huge benefit programs could shore them up for the looming retirement of the baby boom generation and help bring resurgent federal deficits under control.

"I just think everything should be on the table in looking at how you handle these problems,'' said Nickles.

One of the Senate's most conservative and pro-business members, Nickles said he believes the best way to mop up federal red ink is to "grow the economy.''

President Bush is expected to include an economic stimulus package of tax cuts in the budget he proposes in February. Nickles, who has long been an ardent tax-cut advocate, said he has made no final decision on whether to do likewise, but acknowledged his fiscal plan will probably be close to the president's.

"You'll never balance the budget if revenues aren't growing from a growing economy,'' he said.

But in addition, he said he wants to examine the entire $2.1 trillion federal budget.

In its first two years, the Bush administration has focused on controlling the $750 billion portion covering the annual budgets of federal agencies. That part of the budget has grown recently by 7 percent annually or more, which Nickles said "just isn't sustainable,'' but he said he has not decided what the limit should be.

Nickles' comments underlined what is expected to be his tightfisted approach to spending.

Social Security, Medicare and other benefits programs currently consume more than half the overall budget. That proportion is expected to grow steadily, a worry for budget analysts because millions of baby boomers will start retiring later this decade and burden those programs even more.

"Don't write something that Nickles is going to start slashing this program or that program,'' Nickles said. "I'm just trying to step back and say, 'OK, what should we be doing? Is Congress being as energetic as it should be ... , has it been looking at every dollar of spending? I think we should.''

In recent years, lawmakers have done just the opposite and increased federal benefits for farmers and Medicare providers like doctors and hospitals. A major push is expected next year to create new Medicare coverage for prescription drug benefits, which cost $320 billion under a 10-year GOP plan the House passed last June.

The last major savings enacted in benefit programs came in 1997, when savings from Medicare reimbursements to providers were included in that year's budget-balancing deal between President Clinton and Congress.

Nickles acknowledged that similar collaboration would be needed for any new effort to pare savings from benefit programs, saying, "To do entitlement reform requires bipartisan cooperation.''

Outgoing budget committee Chairman Kent Conrad, D-N.D., said Nickles' comments raised questions because of their vagueness.

"They're going to have a chasm in their budget,'' said Conrad, referring to a likely deficit next year approaching $200 billion. "It may compel them to take pretty draconian steps at some point. ... I don't think we should cut Social Security. I don't think we should cut Medicare.''

"I will be surprised if he can move anything of any significance,'' said Rep. John Spratt, D-S.C., top Democrat on the House Budget Committee. "These are tough issues to take on. They dwarf anything else.''

White House spokesman Trent Duffy said of Nickles' call for looking for benefit savings, "That's exactly the kind of thing we embrace.''

Members of both parties, including Bush, have often talked of needing to revamp Social Security and other benefit programs, usually without providing details. During his 2000 election campaign, Bush supported using some Social Security funds to create private investment accounts but was not specific.

Nickles will replace the committee's longtime top Republican, Sen. Pete Domenici of New Mexico. Domenici will chair the Energy and Natural Resources Committee in the new Congress that convenes Jan. 7.