Bush: Reform Social Security Now

President Bush said Thursday that "now is the time to confront Social Security (search)" and vowed to send Congress "a tough budget" early next year to hold keep down federal spending.

"You will see fiscal discipline exercised inside the Oval Office this coming budget cycle," the president told a White House economic conference during the second day of the two-day event.

Ready to head into his second term in the White House, the president has made Social Security reform a cornerstone of his new agenda as his administration grapples with a projected $3.7 trillion, 75-year shortfall for the program.

Bush also wants to give younger workers the ability to invest some of their contributions.

The president, who credited his tax-cutting policies with reviving the economy, said his strategy would be "to grow the economy with reasonable tax policy but to make sure the deficit (search) is dealt with by being wise about how we spend money."

"It's not going to be easy," he said. "It turns out [congressional] appropriators take their title seriously."

Bush said he intends to ignore the traditional political perils of meddling with Social Security in order to save the system for future generations.

"This is an issue on which I campaigned, and I'm still standing," he said.

All participants on Thursday's panel, including financial service firm officials, supported Bush's Social Security plans.

But the Bush plan already has its critics.

House Democratic leader Nancy Pelosi and Senate Minority Leader Harry Reid said Thursday that Bush's words simply weren't enough.

"The president's economic summit should have been an opportunity to begin an honest discussion about strengthening and improving Social Security, and we have been encouraged to hear that the president would like to work on a bipartisan basis," the two lawmakers said.

"We urge the President to come forward with a proposal that does not reduce Social Security funding, harm the middle class, or cut guaranteed benefits," they added. "We cannot support any plan that relies on massive and irresponsible increases in debt, which could destabilize financial markets and lead to large tax increases."

Away from the conference, AFL-CIO (search ) President John Sweeney called Wall Street's support for partial privatization a conflict of interest and "a risky scheme for America, but a sure bet for the financial-services industry."

In a letter to the Securities Industry Association (search ), Sweeney asked the group to disavow Bush's proposed overhaul.

"Will the financial services industry behave as professionals with a duty to speak candidly to the investing public, or will elements of the industry once again seek to make money at the expense of their customers, only this time on a much grander scale?" Sweeney wrote.

Bush was not specific about his own ideas for solving the problem, but he laid out a few do-or-die principles.

He said that for an undefined group of seniors, "nothing will change" in their benefit structure, that there should be no increase in payroll taxes (search) and that younger workers should be moved toward private accounts for some portion of their Social Security contributions.

The audience chuckled as Bush added, "With those principles in mind, I'm open-minded with the members of Congress."

Bush said there are more Americans who have no confidence they will ever see any Social Security benefits than those who are worried their checks will stop coming.

"I think Congress needs to understand that," he said.

Richard Parsons (search ), chairman and chief executive of Time Warner Inc., warned, "We're on a train-wreck course."

"You can't fix this problem with no pain, without making some sacrifices, but the time to start making those sacrifices is now," said Parsons, a chairman of Bush's 2001 committee on partial-privatization.

Democrats say supporters of personal accounts are exaggerating Social Security's funding problem.

Bush "wants to use an ideological solution to a manageable problem," said Rep. Robert Matsui (search ) of California, the top Democrat on the House Social Security subcommittee.

White House press secretary Scott McClellan countered that the problem is real.

"Today's guaranteed benefits are an empty promise to our younger workers," McClellan said.

According to a FOX News/Opinion Dynamics poll released Thursday, six in 10 Americans support giving people the choice to privately invest a small percentage of their Social Security contributions, down 7 percentage points since the beginning of the year (67 percent in January 2004).

More than four in 10 seniors opposed the idea, while almost three out of four Americans age 45 and under liked the idea.

Even though there are wide partisan differences on this issue, majorities of both Democrats (53 percent) and Republicans (71 percent) gave a thumbs-up to the personal-investment option.

A 55-percent majority said that if they had the choice today, they would invest some of their Social Security money in personal accounts.

People under age 30 were the most likely to say they would take this option (71 percent). So would many of those aged 30-45 (69 percent).

In addition, more than six in 10 of those living in households with an annual income over $50,000 said they would invest in personal savings accounts.

According to the survey, young people were the most skeptical about ever receiving Social Security benefits.

According to projections, Social Security will start paying out more than it takes in in 2018.

By 2042, the system will be able to cover only 73 percent of promised benefits, according to Social Security's trustees.

The White House acknowledged that allowing younger workers to invest funds in private accounts would do little to help plug the shortfall.

"It will take more to solve the problem than just personal accounts," McClellan said Wednesday. The transformation would be part of a "comprehensive solution to strengthen Social Security."

Bush is expected to propose details in January, but he won't offer specific legislation. This week's economic summit helped bolster his plans by providing a public forum.

Bush has ruled out an increase in payroll taxes to pay for the overhaul. Experts say he would have little choice but to borrow the funds, perhaps $1 trillion to $2 trillion, in order to continue paying benefits for current and near-retirees whose checks are funded by workers' payroll taxes.

Rep. John Spratt (search ) of South Carolina, the top Democrat on the House Budget Committee, said Bush's summit was a "pep rally for privatization," when the more urgent problem is the skyrocketing federal-budget deficit, which hit $413 billion this year.

Tackling Social Security now amounts to "putting the cart before the horse" by pursuing a program "with enormous implications for federal borrowing without doing anything about the rest of the budget," Spratt said.

The Associated Press contributed to this report.