- The Washington Times - Monday, December 20, 2004

ASSOCIATED PRESS

Two of President Bush’s top advisers refused yesterday to rule out the prospect that wealthy people might have to pay more to help cover the cost of his move to partially privatize Social Security.

Neither Treasury Secretary John W. Snow nor Andrew H. Card Jr., the White House chief of staff, would say whether Mr. Bush’s ideas about overhauling the federal retirement program would include raising the limit on incomes subject to Social Security taxes.

Americans pay those taxes on income up to $87,900. That level will climb to $90,000 next year. One proposal to help compensate for the private accounts would raise or eliminate the tax cutoff, which would mean that wealthier people would pay more.

Asked on ABC’s “This Week” whether that was being considered, Mr. Card said: “The rate that you and I pay, contribute, to our Social Security, the president does not want to see that rate increased.” He would go no further in subsequent questioning.

Both Mr. Snow, who appeared on “Fox News Sunday,” and Mr. Card said Social Security is beyond repair as it stands. They said details of a plan to overhaul the system remain to be worked out.

Mr. Card suggested “an open and honest debate about all of the ramifications” of Mr. Bush’s ideas.

“Let’s get smart people like Alan Greenspan involved, and members of the House and the Senate, and the president will be looking for wise counsel as he prepares to put a package together.”

Mr. Greenspan is the longtime chairman of the Federal Reserve and is respected in Congress for his stewardship of the economy.

Asked whether Mr. Bush’s ideas would remove guarantees of Social Security benefits to younger workers, Mr. Card said: “Under no one’s plan will younger workers receive benefits they’ve been promised because the Social Security system doesn’t have the financial underpinning, the foundation to support the expectations of Social Security 75 years from now, 50 years from now.”

Mr. Bush expects to present a plan to Congress in his budget proposals in February.

What has been laid out so far is that people retiring or near retirement would suffer no cuts in benefits, Social Security taxes would not rise, and younger workers could opt into a 401(k)-style private investment plan with part of their contributions.

Estimates of the costs run close to $2 trillion over 75 years; under current rules, Social Security would be spending more than it takes in by 2018.

“Let me say we don’t have a plan yet, so all of these numbers on financing are entirely speculative,” Mr. Snow said. “Let me say this, though: that if we get a real fix here — we have to get a real fix — if there’s a real fix, we will be able to finance the transition costs.”

Mr. Snow said the most important element of Mr. Bush’s ideas is his determination not to allow higher Social Security taxes. He contended Europe’s socialist economies during the second half of the 20th century showed high payroll taxes hurt employment and the economy.

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