White House, Congress Facing Impasse Over Social Security

Back-channel efforts by the White House and Capitol Hill Democrats to begin trying to negotiate a solution to the fiscal problems of Social Security and other federal benefit programs appeared to collapse Wednesday.

At issue is a little-publicized attempt by the White House and members of Congress to set up a working group of lawmakers and top administration officials to fortify benefit programs like Social Security and Medicare for the severe future fiscal challenges due to the looming retirement of the Baby Boom generation. Three-fourths of the group, evenly split between Democrats and Republicans, would have had to agree on any solution.

But Senate Budget Committee Chairman Kent Conrad, D-N.D., accused the White House of acting in bad faith at a panel hearing that turned acrimonious over White House Budget Director Rob Portman's unwillingness to acknowledge that tax increases should be part of any fix for the long-term problems of the huge federal benefit programs.

"We have an opportunity here to work together, but the only way I know in human relations for there to be resolution between parties who have different views is for both sides to compromise," Conrad said. "Unfortunately I see virtually none on your side. And I regret that more than I can say."

Conrad then gaveled the hearing to an end and immediately left.

Portman says the administration is willing to come to the negotiating table with no preconditions — a change from the stance President Bush took two years ago, when he ruled out hikes in Social Security payroll taxes. But Portman told reporters, "The first step shouldn't prejudge where we end up."

The idea of establishing the negotiating group had come close to fruition, Conrad said in an interview Saturday, but Vice President Dick Cheney set talks back last month after saying in a Fox News Sunday interview that the administration continues to oppose payroll tax hikes as part of a broader Social Security solution.

The panel was likely to have first focused on Social Security.

The Senate Budget Committee's top Republican, Judd Gregg of New Hampshire, said House Democrats opposed the idea.

"People on the other side are more interested in the next election than the next generation," Gregg said.