WASHINGTON – House Republicans will campaign for a new type of personal savings accounts (search) during the August recess and vote on them in September, the first sign of political momentum in a Social Security debate Democrats have so far brought to a standstill.
Republicans call the proposed plan "grow accounts" — voluntary accounts for workers under age 55 financed by Social Security surpluses. The accounts would not contain stocks, only U.S.-backed Treasury bonds.
As of now Congress spends Social Security surpluses on general government programs, which some GOP members argue are of dubious value. They want the surpluses to be spent on making money for American workers.
"When I go home to my district in Texas, nothing outrages constituents more than to realize that their Social Security has been used for rutebaga research and studies on the sexual habits of older men," said Rep. Jeb Hensarling (search).
The proposed House Republican accounts don't tackle Social Security (search) solvency, but they do offer something unavailable now: protection of Social Security surpluses and a private bond account that individuals can own and pass on to their spouse or surviving children.
That's different from a proposed plan offered by House Democrats who, in an effort to find some middle ground on Social Security reform, have decided to embrace private retirement accounts.
Those private accounts however are only those that Americans already have, not ones financed through Social Security taxes. Democrats are suggesting tax credits to encourage workers greater use of existing tax-free retirement accounts.
"Our plan will expand and improve existing investment accounts such as 401Ks and IRAs so that American families can benefit from compound interest while retaining Social Security's guaranteed benefit creating a comprehensive retirement strategy," House Democratic Leader Nancy Pelosi (search) of California said last week.
The Democrats' AmeriSave retirement accounts would give low- and middle-income taxpayers $1 for each dollar they invest in a tax-free private retirement account up to a yearly federal matching limit of $1,000.
The cost over 10 years would be $75 billion. Democrats say the money will come from tax increases on the wealthy.
"Well, we certainly in the Ways and Means Committee have a very attractive group of high income people that are getting a tax cut that they didn't ask for and the budget doesn't need, and we will be able to pay for everything that we have in the plan," said Rep. Charles Rangel (search), D-N.Y., the ranking member on the House Ways and Means Committee.
Democrats say their plan does nothing to alter Social Security financing or benefits.
That means, like the Republican plan, it does not address the retirement program's long-term solvency woes.
"This is not about privatization in any respect. This is about giving Americans who work hard, play by the rules, a match so that they can achieve greater retirement security above and beyond the baseline that we seek to protect, which is Social Security in its solvency," said Rep. Robert Menendez (search), chairman of the House Democratic Caucus.
House Republicans say it is time Democrats recognize the value of private investment accounts, but they argue the Democrats' plan doesn't help cash-strapped workers.
"The problem with that is, you've got to have $1,000. You've got to have disposable income. They are doing absolutely nothing to help the poorest of the poor who live from paycheck to paycheck,"said Rep. Clay Shaw (search), R-Fla.
Click in the box near the top of the story to watch a report by FOX News' Major Garrett.