- The Washington Times - Monday, August 6, 2001

House Democrats are planning an all-out political attack against President Bush's proposal to create Social Security investment accounts.

Concerned that Mr. Bush's plan to let workers invest a small percentage of their payroll taxes in stocks and bonds is gaining support among younger workers, women and minorities, Democrats headed home for the August recess over the weekend armed with sample news releases and prewritten op-ed columns, ads and flyers that accuse the president of wanting to cut Social Security benefits, raise the eligibility age and eventually dismantle the program.

"It is imperative that Democratic members send a strong message that we will fight to preserve Social Security for years to come," Rep. Martin Frost of Texas, chairman of the House Democratic Caucus, said in a memorandum attached to the "Sample Social Security Packet," a copy of which was obtained by The Washington Times.

In the packet's sample op-ed newspaper column, the Democrats accuse the Social Security reform commission, which Mr. Bush established, of being biased toward privatization. "Unfortunately, the commission is headed down the wrong path, and its recommendations could lead to the dismantling of Social Security as we know it," the draft op-ed says.

In a sample news release that Democrats will be sending out in their districts, they charge that Mr. Bush's plan would lead to "deep cuts in guaranteed benefits," expose workers to "great financial risk" in the stock market, shrink retirement funds through "higher administrative fees" and a massive bureaucracy, undermine "retirement security for women," and boost the retirement age to 70.

A senior White House official said yesterday that the charges "are all lies," pointing out that the set of principles that Mr. Bush said the commission must follow specifically forbids cutting benefits for those on Social Security or nearing retirement.

Another White House official, spokesman Scott McClellan, accused the Democrats of using "poll-driven tactics to scare seniors and score partisan points."

Charles Blahouse, the commission's executive director, flatly denied that the panel had any intention to raise the eligibility age. "There were six plans introduced in the last Congress, each of which was certified as actuarially sound by the Social Security Administration, and none of them raised the retirement age to 70 not one," he said.

"So clearly, it is incorrect to say the commission will raise the retirement age. That's just wrong," he said.

Mr. Blahouse also said that any assertion that the commission is biased toward the idea of privatization is not true. "Many of the members of the commission do not support privatization in any real sense of the term, and there is great diversity of views on the commission as to how personal accounts should be structured and financed," he said.

"Neither the commission's Democrats nor Republicans want to be associated with any partisan activity. They are all trying to do their best in a bipartisan way," he said.

Mr. Blahouse also dismissed the Democratic charge that administrative costs of managing millions of private investment accounts would be too costly and too bureaucratic. The government runs a pension plan under which federal employees invest in stocks and its administrative costs "are very low," he said.

As for the Democrats' charges that the market is too risky for investors, supporters of the president's partial privatization proposal said investing in blue chip stocks or Treasury bonds is just as safe over the long-term as individual retirement accounts and 401(k) plans that millions of workers presently invest in. Both plans were created by Congress.

All of the attack points the Democrats make come from a series of focus group polls financed by the AFL-CIO and conducted by Peter Hart Research.

However, in a memorandum outlining their focus group findings, Hart pollsters Geoffrey Garin and Guy Molyneux included several responses that favored Mr. Bush's position, though they were not contained in the Democrats' talking points. Among them:

•"Many non-retired Americans, especially those under age 40, express strong interest in proposal for individual investment accounts."

•"Social Security supporters should understand that partial privatization has genuine appeal among many voters. … As more working Americans gain investment experience through 401(k)s and similar plans, they grow more comfortable with the idea of managing their retirement savings."

•"Lacking confidence in the government's management of Social Security funds, many people speculate that they would earn a better rate of return if they invested their funds."

•"Most working people say that they would take advantage of an option to invest a portion of their payroll taxes, including many who oppose privatization."

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