- The Washington Times - Friday, November 16, 2001

President Bush's Social Security reform commission is working on a list of up to five options to let workers privately invest some of their payroll taxes in stocks and bonds that will be the basis of a national debate in next year's midterm elections.
After meeting with senior White House officials late last month, the commission decided to submit a multiple list of recommendations, instead of a single plan that the 16-member presidential panel intended to propose in its final report by Dec. 21.
The reason for the late change in strategy was twofold, said administration and commission officials.
All of the commission members are united behind the idea of creating private Social Security retirement accounts, but are unable to agree on how much each worker should be allowed to invest in them, how the plans should be implemented and how much flexibility workers should have over their funds when they retire.
The administration also feared that a single plan would be an easy political target for the Democrats to attack in next year's elections, but that a broader range of reform options would encourage debate and discussion throughout the 2002 campaign cycle that eventually would lead to congressional consideration the following year.
"It's very easy to take shots at one plan when you don't have to say what the alternative is. What the commission is going to do is show what the alternatives are and put all the information out there," said Charles Blahous, the commission's executive director.
"The commissioners see their mission as not being the last word in the debate but helping the Congress and the president to get information about all of the different approaches and trade-offs. You can't do that with just one plan," Mr. Blahous said.
"Coming up with a report that includes a series of options allows one to have the debate rather than turning to people and saying that it is this plan or no reform. It's much better to say let us have a debate over option A, B or C," said David John, a senior policy analyst at the Heritage Foundation who has been advising the commission.
"What the commission is proposing is a very fine start. But when we get into the legislative process, that is going to require a great deal of flexibility to come up with an actual reform plan," Mr. John said. "Coming up with good politics and good policy is going to be the key."
Officials said the commission's list of recommendations could present three to five competing options. One would propose more regulated, "fairly small accounts" that would include restrictions on the growth in Social Security benefits. Another option would not require reducing Social Security benefits but would have slightly higher transition costs.
"We expect that there will be different private account sizes proposed, from 2 percentage points of income in one and closer to 5 percentage points in another," Mr. John said.
"At least one of the options would allow workers in different income levels to put different proportions of their incomes into their investment plan," he said.
Mr. Blahous, who would not discuss the details of the commission's options, said no decision has been reached on how many option plans will be in the report.
The commission plans to hold two more public meetings on Nov. 29 and Dec. 11, when it will begin finalizing its recommendations. "All of the options being considered are consistent with the reform principles that the president has laid down," a commission official said.


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