- The Washington Times - Tuesday, April 19, 2005

House conservatives are afraid the White House will compromise on Social Security and go light on reform, so they are drawing a line in the sand this week, telling President Bush that they oppose any legislation that creates personal retirement accounts outside of Social Security.

“We worry when we hear these sort of things being entertained, and we just want to make sure that it’s not the president who is entertaining them,” said Rep. Jeff Flake, an Arizona Republican who, with other conservatives, will sign a letter to Mr. Bush later this week. “When they tell you these things are on the table, that’s troublesome.”

Mr. Flake’s group wants to create personal accounts by allowing people to invest a portion of their Social Security payroll tax in the private sector. This is the vision Mr. Bush has been promoting — what officials call “carve-out” accounts.

But as Republicans seek a Social Security compromise, many on both sides of the aisle have expressed support for creating personal retirement accounts outside of Social Security — as add-ons that supplement Social Security benefits, to help people save for retirement. Last week, a USA Today article cited a top Bush adviser as saying the White House is open to discussing this approach.

Rep. Mike Pence, Indiana Republican and head of the Republican Study Committee, said there is “broad conservative opposition in the House to add-on accounts,” because they create a government handout and don’t reform the Social Security system.

Mr. Pence is circulating a letter for conservatives to send to Mr. Bush later this week, demanding that he stick with the carve-out accounts. Mr. Pence said conservatives want to prevent what they have seen in recent years, as legislation that began as reforms of education and Medicare morphed into massive expansions of government.

“Where conservatives have gone wrong in the past is, we haven’t made our firm positions clear early in the process,” he said.

After the USA Today article, Mr. Pence shot off a letter to the White House. He said he was assured no decisions were made and everything is still on the table, but he added that conservatives still want to ensure their opposition to add-ons is understood.

A bill by Rep. E. Clay Shaw Jr., Florida Republican, has generated notable interest. It would create add-on accounts funded through a refundable tax credit. Under the proposal, when people reach retirement age, they would receive their promised Social Security benefits or the money in their personal account, whichever is higher.

A Shaw spokeswoman said most people eventually would rely on their sizable personal accounts, so Social Security could begin to build up a surplus. The Shaw plan would cost $3.4 trillion, but would create a $4.6 trillion Social Security surplus after 75 years, she said.

But Mr. Pence said this plan amounts to creating a government entitlement because low-income people would receive checks from the government for their add-on accounts. “We just want to kill this idea dead,” Mr. Flake said. “This is not reform.”

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