Wednesday, February 02, 2005

Democrats Claim Votes to Halt Social Security Plan
Democrats Claim Votes to Halt Social Security Plan
Bush Faces Pressure to Outline Restructuring Amid Senate Opposition to Personal Accounts

By Charles Babington and Mike Allen
Washington Post Staff Writers
Wednesday, February 2, 2005; Page A10

Senate Democrats said yesterday that they have more than enough votes to block President Bush's bid to allow private accounts in Social Security, increasing pressure on the president to begin outlining a plan tonight that might offer enough compromises or incentives to win over at least a handful of Democrats.

"President Bush should forget about privatizing Social Security. It will not happen," Senate Minority Leader Harry M. Reid (D-Nev.) told reporters. He initially said all 44 Senate Democrats had made commitments to oppose personal accounts. Later, acknowledging he had not spoken with all 44, Reid said: "I don't know of a single Democratic senator" who will back the plan.

Because Senate rules require 60 votes in the 100-member chamber to overcome delaying tactics, Democrats appear positioned to block Bush's partial privatization efforts unless he makes concessions that attract moderate Democrats from states that the president carried last fall.

But Bush's challenge goes beyond the Democrats and Sen. James M. Jeffords (I-Vt.), who generally votes with them. Two moderate Republicans -- Sens. Lincoln D. Chafee (R.I.) and Olympia J. Snowe (Maine) -- have sharply criticized the notion of private accounts, and at least two others expressed serious reservations. Senate Majority Leader Bill Frist (R-Tenn.) said he has not tried to measure the plan's support among the 55 GOP senators.

Many House Democrats, and a few Republicans, also have criticized private accounts. But House rules enable the GOP majority to overcome Democratic opposition if Republican leaders lose only a few of their members. House passage would make no difference if the Senate killed the legislation.

Bush has said personal accounts are essential to shore up young workers' faith in Social Security and to help address long-term financial challenges facing the system. Many Democrats say individual accounts would add to the deficit and force at least temporary cuts in Social Security benefits. They say the plan is the wrong solution for a system that is not in crisis.

Private accounts would redirect some of the payroll taxes that workers contribute to Social Security, investing them in stocks and bonds, which historically have increased in value more rapidly than Treasury bills in most years. A private account would follow the worker and be available when he or she retires.

Several Republicans have urged the White House to explain Bush's plans more fully and vigorously, starting with tonight's State of the Union address. They note that Bush can be highly persuasive when he pushes hard on a priority, as he did with tax cuts in his first term.

Despite Reid's comments, "there are a lot of Democrats who are open to talking" about private accounts, said Sen. Rick Santorum (R-Pa.). Freshman Sen. John Thune (R-S.D.) said "we got a little behind the eight-ball communicating that message" of Social Security's long-term problems, "but that's about to change."

Rep. Rob Portman (Ohio), a GOP leader with close White House ties, said public support for personal accounts will grow "if it's properly explained."

"I think it's salable," he said. "I don't think the Democrats' do-nothing solution helps them politically as much as they think."

Bush will explain tonight why he thinks personal accounts will bolster Social Security's long-term financial health, a White House official said. The president "will flesh out new details and how he views the personal retirement accounts will work," the official said.

Tomorrow and Friday, Bush will visit five politically competitive states that are home to seven Democratic senators, four of whom face reelection next year. Of those, only Sen. Ben Nelson (D-Neb.) has talked of perhaps being open to private accounts for Social Security.

Nelson told home state reporters on a conference call that he will look at Bush's plan "very cautiously, carefully and conservatively."

Meanwhile yesterday, Treasury Secretary John W. Snow visited Sens. Max Baucus (D-Mont.) and Kent Conrad (D-N.D.) -- two other targets of Bush's tour -- to discuss Social Security. Baucus told reporters he would listen to Snow's pitch, but thus far, "I don't see the will" on the White House's part to compromise with Democrats.

Sen. Blanche Lincoln (D) of Arkansas, another state Bush will visit, said the president is "going to have to radically change his approach" to enlist any Democrats. She said she would favor personal accounts if they encouraged saving by young people, but "diverting their payroll taxes will not encourage savings, and I think it would devastate current beneficiaries."

Democrats yesterday trumpeted a Congressional Research Service analysis that concluded that a proposed change in Social Security's benefit structure would have thrown millions of senior citizens into poverty had it been implemented at the system's inception. The White House has floated the idea of setting initial Social Security benefits according to the rise in inflation over a worker's career, instead of the rise in wages, as the system now does. Because prices tend to rise slower than wages, the proposal would eliminate the projected $3.7 trillion gap between benefits promised future retirees and taxes expected to be collected. But it would also impose significant cuts in scheduled benefits.

Had Social Security implemented such "price indexing" in 1940, the CRS concluded, the number of poor American retirees would have nearly tripled from the 3.6 million currently beneath the poverty threshold to 10.5 million.

Staff writers Dan Balz and Jonathan Weisman contributed to this report.