WASHINGTON – The sharp reduction in the federal budget surplus will have no effect on how President Bush's Social Security commission proposes to strengthen the system with personal accounts, the co-chairmen of the panel said Wednesday.
The commission is looking at restructuring the system using only Social Security trust fund money.
"What we're trying to do is try to figure out how we can work within the contours of the system," co-chairman Richard Parsons said before the commission's public meeting.
"I wish you wouldn't get too preoccupied with the day-to-day events," added former Sen. Daniel Patrick Moynihan, D-N.Y., also a co-chairman.
The Office of Management and Budget issued new estimates Wednesday showing that the projected budget surplus for the fiscal year ending Sept. 30 is more than $90 billion below previous estimates.
But relying only on Social Security funds to overhaul the system and create the private accounts Bush favors could mean cutting benefits or raising the retirement age.
Parsons acknowledged that the commission has looked at benefit cuts as a possibility.
"But have we made any conclusion regarding any of that? Not at this point in time," he said.
Before the public meeting, the 16-member commission gathered privately, in two subgroups, to discuss fiscal and administrative matters relating to personal accounts.
By splitting in two, the commission exempts itself from federal law that requires open meetings. Open-government advocates have questioned the commission's effort at secrecy and say the move violates the intent of the law.
Reps. Robert Matsui and Henry Waxman, both D-Calif., senior Democrats, respectively, on the House Ways and Means Social Security subcommittee and Government Reform Committee, said in a letter that the meetings should be opened to the public.
"The public has the right to know what information is being presented to the commission and how it's proposals to privatize Social Security are developed," the letter said.
But the commission's co-chairmen said the closed meetings were necessary to discuss various options and details regarding financial and administrative issues of personal accounts.
"These were information-gathering and comprehension-enhancing sessions this morning," Parsons said. "There were no deliberations. There were no decisions taken. There were no -- nothing of public note."
Treasury Department officials briefed the commissioners in the private meetings about potential ways to structure private accounts, Parsons said.
The large baby boom generation will put a strain on Social Security in the coming decade as members start retiring and fewer workers pay into the system. By 2016, the system will start paying out more in benefits than it receives in taxes. The trust fund is estimated to be depleted by 2038.
The White House commission is to recommend to Bush this fall how to set up private accounts and how to pay for them, while strengthening the system's financial future. Any proposal would be subject to congressional approval.