- The Washington Times - Tuesday, May 1, 2001

President Bush is expected to establish a Social Security commission tomorrow to develop a specific plan that for the first time would let workers put part of their payroll taxes into their own private investment retirement accounts.
According to White House officials, Mr. Bush will announce a 14-member commission, composed of seven Republicans and seven Democrats who, like the president, believe that the New Deal-era program needs to be partially privatized to save it from bankruptcy when millions of baby boomers begin retiring in the next 15 years and demanding their benefits.
Mr. Bush thinks that the only long-term solution is to allow workers to voluntarily move some of their taxes into higher-yield stock and bond investment accounts, which they would own and fully control, to build much higher retirement income outside the Social Security system.
The presidential commission will have a focused, short-term assignment: Come up with a set of specific, safe, workable proposals by this fall on how to implement such a reform plan for the long term.
While Mr. Bush is still embroiled in getting his sweeping tax-cut package and education-reform plan enacted this month, the administration has decided that it wants Congress to begin tackling other parts of the presidents agenda early next year.
But if the president thinks that getting his tax-cut proposals through Congress have proven difficult, partially privatizing the venerable and politically popular Social Security program, which will affect an estimated 123 million workers, could make his present task look like childs play.
"This is one of those really big issues that will make tax reform look like the warm-up act," said David C. John, the senior policy analyst for Social Security at the Heritage Foundation.
Administration officials working on the reform proposal would not disclose the names of the panel, but other policy strategists close to the White House said that its membership will include Carolyn Weaver, a domestic policy adviser in the Bush campaign and a former analyst at the American Enterprise Institute, and former Rep. Tim Penny, Minnesota Democrat.
Thus far, Mr. Bush has not submitted a legislative plan to Congress beyond the set of general guidelines that he announced during his campaign. Under those guidelines:
* The reforms should not reduce existing benefits for current retirees or near-retirees.
* Payroll taxes cannot be raised and the Social Security surplus can only be used to shore up the system.
* The government must not be an investor in the financial markets.
* Participation in the individually controlled personal retirement plans must be voluntary.
Mr. Bush made Social Security reform a major issue in his campaign.
His opponent, Al Gore, tried to make Mr. Bushs plan an issue in the campaign, but the former vice presidents charges that the plan was "a risky scheme" that threatened to undermine and bankrupt Social Security gained little political traction.
Polls show strong support for the idea, especially among younger workers and minorities, who find the argument very appealing that they can reap a much better return on their money in the financial markets than from the government.
The plunge in the stock market over the past year threatened to weaken support for the Bush plan, but that does not seem to have significantly affected public opinion very much, analysts said.
"Studies show that, over time, a mixed portfolio of half stocks and half super-safe government bonds earns an average of 5 percent a year," Mr. John said. "This compares to Social Securitys average 1.2 percent annual real growth for an average 30-year-old working family. It is time to allow workers of all income levels to share in this growth."


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