WASHINGTON – A centrist Republican senator who opposes President Bush's proposal of private investment accounts (search) for Social Security is endorsing the president's call for a change in calculating benefits that would cut future checks for all but low-income workers.
Sen. Lincoln Chafee (search) of Rhode Island, part of a group of moderates whose support both parties feel will be necessary to achieve any Social Security (search) compromise, said Bush could boost his sales pitch — and force Democrats into outlining plans of their own — by dropping his talk of personal investment accounts.
"If you take private accounts off of the table, it kind of calls the opposition's bluff," Chafee said in an interview published in the Kent County Daily Times of West Warwick, R.I.
Similarly, former President Clinton, who saw his administration's Social Security reform effort stall, urged Democrats to offer their own fix. To date, party leaders have said the program is solvent for the foreseeable future, so they will not discuss changes until Bush drops his private accounts proposal.
"I think the Democrats should say what they are for on Social Security in the next couple weeks; they got time to put together a program," Clinton said in an interview to be broadcast Saturday on ABC's "Good Morning America."
"I think it should include an opportunity for people to participate in savings and ownership. They don't have to do private accounts because they can't figure out how to borrow the money. ... But I think that the Democrats should have a plan and they should talk to the president and the congressional Republicans about it."
Clinton's comments echo the findings of recent focus group results reviewed by Democratic congressional leaders. They showed that the public considered the Democrats' posture obstructionist, although the leaders have continued to adhere to it.
"We are in the minority in both houses and we needed to wait until they made their proposal and come back," Clinton said. "We didn't have a proposal until a couple days ago."
Social Security faces a major challenge with the pending retirement of the baby boom generation.
The Depression-era program, funded with a 12.4 percent payroll tax (search) split between workers and their employees, is projected to have growing revenues until 2008. While revenues would peak at that time, the program would still take in more than it pays out in benefits until 2017. It would then be able to pay full benefits until 2041, but only by cashing in government IOUs that would likely trigger drastic spending cuts elsewhere in the federal budget. After that, the program would take in only enough to cover 72 percent of projected retiree benefits.
Bush has proposed allowing younger workers to divert an amount equal to 4 percentage points of their payroll tax into a personal account invested in the stock market. The accounts would be strictly controlled, subject to an offsetting cut in traditional retirement benefits, but inheritable by a worker's heirs. The president argues the accounts will offset likely benefit cuts, but Democrats complain they make the program's finances worse by diverting crucial revenue into the accounts.
During a news conference last week, Bush proposed improving Social Security's long-term financing by shifting to what's called "progressive indexing." (search) Benefits currently increase each year based on wage growth. Under the president's proposal, that would continue for workers earning up to about $30,000. Future high-income workers would have their benefits linked to prices, which increase less rapidly, while workers in between would have their checks tied to a mixture of the two indices.
"You mention private accounts, they all boo," Chafee told the Daily Times in a story published Thursday, recounting the town hall meetings he has held. "I say I'm opposed to them, they all cheer." The newspaper said he supported progressive indexing, but it did not quote him directly.
Clinton's comment, meanwhile, drew praise from an unusual quarter: the Republican National Committee.
"The Pelosi-Reid Democrats of today should learn from their predecessors and set aside their agenda of obstruction," said a statement issued by RNC spokeswoman Tracey Schmitt. "It's not only a losing political strategy, but Americans deserve leaders of both parties who lead with principle rather than partisan antics."