WASHINGTON — “The White House may not know it, but Social Security reform, at least the kind that they want to do, is DOA,” says a House Ways and Means staffer. “We’re taking it out of their hands and going to make the best of a bad situation.”
For weeks now, ask any White House staffer involved in the Social Security debate, and they will tell you that things are still on track for the President’s framework of a reform bill, including personal savings accounts. But in both the House and the Senate, Republican leaders and their caucuses don’t see how they can pull it off in the current political climate.
“It’s not that the Democrats have done anything particularly savvy or strategic to make this fight difficult. They are not the reason reform has fallen flat,” says a Senate Finance Committee staffer. “The White House just hasn’t done a good enough job messaging this thing. There has never been a consistent, say, ten-day period of time where it was Social Security reform or retirement enhancement all day, all the time, in terms of messaging. You’d have the President out there talking about it one day, then talking about three other areas of concern the next two days. The fact is, the media is incapable of covering an issue like this unless you put a ring in its nose and pull it along. There has to be focus, focus, focus.”
House Republicans would prefer to make some headway on other taxation and healthcare issues before the August recess. In the Senate, which has been embroiled in judicial warfare, the nomination of John Bolton as ambassador to the U.N., and appropriations battles, there is little appetite to take up the White House plan now or the near future.
Both Senate Finance Committee Chairman Charles Grassley and House Ways and Means Committee Chairman Bill Thomas and their committee staffs have been working on some form of Social Security reform, but neither is looking to take things as far as the White House wants. Both proposals do include reforms the Bush Administration has embraced or at least indicated it might support, including reduction of future benefits for all but the poor, raising the retirement age for full benefits, and not raising payroll taxes.
But neither chairman believes after months of discussions, debates, and back room arm-twisting that they can muster the votes for personal accounts, even at the small level the White House has been pressing. Nor do they believe that they can meet the reform goal set by President Bush to put the program on a path to full solvency.
ONE WILD CARD IN THE SOCIAL SECURITY reform debate is South Carolina Senator Jim DeMint, who is quietly mounting his own reform proposal, which is based on what he has been working on from the time he was in the House. DeMint is known to have been meeting with outside Republican groups to generate some grassroots support for a bill he will probably introduce this week. He has indicated privately that he believes from private conversations he has had with Democrats that he will garner some Democratic support.
DeMint’s plan would feature hallmarks of the Bush framework, but would use the Social Security surplus to establish private accounts, while not cutting benefits or raising taxes to deal with the system’s funding shortage.
Hill sources say drafts of the legislation have included a feature of the reform proposal DeMint touted in the House: allowing people age 55 and under to set aside between 3 percent and 8 percent of their Social Security taxes, depending upon income levels, into individual accounts. These accounts would ensure “full benefits” to participants after retirement, with a mix of individual account and traditional Social Security account monthly payouts.
“DeMint’s plan is interesting because he keeps the individual account contributions in the Social Security system,” says a conservative activist, who has met with DeMint. “All of that money is growing at market rates, while also keeping the system solvent. If there is a plan that can jump-start this thing again, it’s DeMint’s.”
But leadership staff on both sides of the Capitol are dubious that any plan with individual accounts can survive. They say the best hope for individual account supporters is a plan with a small, pilot-program-type individual account component coming out of either the House or the Senate that might survive in conference. Given Senator Grassley’s ambivalence about individual accounts, the proposal would almost certainly have to come out of Ways and Means in the House.