Private accounts seen as ‘solution’

The White House and top House Republicans yesterday refused to back away from personal savings accounts as a key component of reforming Social Security, despite misgivings by Democrats and some Republicans.

“Personal retirement accounts is the main solution to this problem. If you take them off the table then the only solutions left are to raise taxes, which the Democrats obviously want, or to cut benefits, which they obviously want,” said House Majority Leader Tom DeLay, Texas Republican.

At the White House, President Bush’s spokesman Scott McClellan yesterday emphasized that allowing younger workers to divert a portion of their payroll contributions into private accounts is essential to strengthen the Depression-era retirement program.

Mr. McClellan was responding to recent grumblings by Senate Finance Committee Chairman Charles E. Grassley of Iowa and Sen. Lindsey Graham of South Carolina, both Republicans, who said Mr. Bush should focus foremost on the solvency of Social Security.

On Tuesday, Mr. Graham told CongressDaily that private accounts probably should be set aside for now because they “don’t bring about solvency.”

Eager to use the bully pulpit to bring his party into line, Mr. Bush takes his case directly to four Republican states today and tomorrow. Republicans occupy seven of eight Senate seats in Kentucky, Alabama, Tennessee and Louisiana.

It marks a shift in strategy for the president, who kicked off his Social Security offensive last month by stumping in states where Democratic senators were considered receptive to pressure. Having failed to enlist the Democrats, Mr. Bush is seeking to shore up his Republican base.

“At the end of the day, I think that Republican members are going to be strongly supportive of the president’s plan,” said one Republican strategist with close ties to the White House.

“But any time these liberal groups like Moveon.org or unions send protesters into town-hall meetings, or there’s television advertising going on or radio advertising going on, you know, people get a little shaky,” the strategist added.

On Capitol Hill, Rep. Jim McCrery — Louisiana Republican and chairman of the House Ways and Means Social Security subcommittee — argued that it is “dead wrong” of critics to say private accounts cannot help improve the system’s solvency.

“For anyone to take anything off the table at this point would be counterproductive,” Mr. McCrery said yesterday during a committee hearing on Social Security’s future. “I hope we all can calm down and say everything is on the table.”

During the hearing, Comptroller General David M. Walker, head of the Government Accountability Office, said Social Security “does not face an immediate crisis” but does have a “large and growing financial problem,” so “it’d be prudent to act sooner rather than later.”

With the baby boomer generation nearing retirement, the Social Security system is expected to begin paying out more in benefits than it collects within 15 years and become unable to pay any benefits as early as 2042.

Under questioning by Democrats, Mr. Walker said the accounts would not improve the system’s financial situation and would “accelerate” insolvency.

“I hope the world hears it,” said Rep. Sander M. Levin, Michigan Democrat. “This is a solution that makes the problem worse.”

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