Bush's Social Security Commission Plans for Privatization
WASHINGTON – President Bush's new Social Security commission is getting down to work on overhauling the massive entitlement program, with stock market investing on the panel's list of potential fixes.
"There has been a very remarkable change in the approach Americans take to the thought of owning a mutual fund or some other saving system that's connected with the markets," former Democratic Sen. Daniel Patrick Moynihan of New York, co-chairman of the commission, said at the panel's first meeting Monday.
All 16 commission members -- both Republicans and Democrats -- have supported privatizing the system to some degree. Critics charged that Bush stacked the commission with supporters that would provide political weight with a bipartisan label to his campaign pledge of creating personal investment accounts.
The commission "is astonishingly unrepresentative of the array of views held by most Americans concerning Social Security's future," said Roger Hickey, co-director of the Institute for America's Future.
Hickey noted that members include corporate executives and financial investment officials, but no representatives or advocates for Social Security beneficiaries.
But, said Estelle James, a Democratic member and World Bank consultant, "The system has to change, everyone agrees."
Any change must be approved by Congress. Clouding the reality of any recommendations the commission makes are next year's congressional election, a newly Democratic-controlled Senate and stock-market queasiness in a softening economy.
The commission also must devise a way to pay for the private investment accounts without cutting benefits for current recipients when most of the government's projected surplus has been dedicated to Bush's $1.35 trillion tax cut.
"One of the advantages of being an advisory commission is that you advise," said Dick Parsons, co-chairman, a Republican and co-chief operating officer of AOL Time Warner.
"As Senator Moynihan likes to say, he's a recovering politician and I never was one, so both of us have the luxury of not having to worry about the politics and just try to do what is right," he said.
During breaks of the four-hour commission meeting, both Moynihan and Parsons told reporters that things like increasing the retirement age and restraining cost-of-living raises for future retirees could be among the recommendations eventually made by the group.
Social Security will start paying out more in benefits than workers pay into the system starting in 2016. Benefits will have to be cut, taxes increased or the system overhauled to meet future demand, especially as the large baby boomer generation nears retirement and starts to deplete the Social Security fund.
The commission will hold two to four public hearings across the country, starting in September, to talk about private investment accounts.
The commission will issue an initial report that will identify problems with the system and make the case for change. A final report will be issued to the president this fall.