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Bush, Lawmakers Meet on Social Security

President Bush (search) sought support from congressional leaders of both parties Monday for his aggressive proposal to overhaul Social Security (search) during his second term.

Bush wants to revamp Social Security by letting younger workers divert some retirement contributions into private investment accounts, which critics argue might hurt the workers more than help them. In 2018, the federal retirement system will start paying out more in benefits than it collects in taxes.

"Today's system is unsustainable," White House press secretary Scott McClellan told reporters Monday. "Younger workers are facing massive tax increases or massive benefit cuts if we don't act."

American workers currently pay into Social Security 6.2 percent of their taxable income up to $87,900, rising to $90,000 in 2005, and employers match that amount.

A starting point for an overhaul is a plan proposed by a presidential commission in 2001 that would allow diversion of 2 percent into private accounts. The remaining 4.2 percent, and the taxes employers pay, would go into the system to help pay for benefits for current retirees.

Democrats argue that the system can be altered, not demolished, to improve future funding.

Shoring up the current system would require a combination of increasing taxes, cutting benefit for future retirees and raising the retirement age. McClellan said, however, that Bush is not pushing any plan that would change benefits for older people or those nearing retirement.

"The president has made it very clear that there will be no changes for those at or near retirement," McClellan said.

Bush has not said how an estimated $2 trillion transition costs to his revamped Social Security program would be paid for. Record deficits, Bush's desire to make his five rounds of tax cuts permanent and the rising cost of war in Iraq (search) and Afghanistan are major obstacles.

"There will be some upfront transition financing that will be needed to move toward a better system that will allow younger workers to invest a small portion of their own money into personal savings accounts," McClellan said.

"Under the current system, the cost of doing nothing is $10 trillion over the long haul," he said.