President Bush last night proposed increasing Social Security benefits for low-income retirees more quickly than payments to “people who are better off,” but said current workers can “count on a benefit equal to or higher than today’s seniors.”
“If you work hard and pay into Social Security your entire life, you will not retire into poverty,” the president said at the hourlong, prime-time press conference.
Mr. Bush also said he had “no magic wand” to reduce gas prices and instead offered “longer-term projects,” such as spurring development of alternative energy sources at home.
And Mr. Bush warned that North Korean President Kim Jong-il — whom he called “a dangerous person” — had to be presumed to be working on the capability “to deliver a nuclear weapon.”
“We don’t know if he can or not, but I think it’s best when you’re dealing with a tyrant like Kim Jong-il to assume he can,” the president said.
Offering his first details on his plan to shore up the federal retirement entitlement program, the president said he favored indexing future increases in Social Security benefits, thus giving larger increases to the poor and smaller ones to the wealthy.
He declared that his new proposals for reform “would solve most of the funding challenges facing Social Security. A variety of options are available to solve the rest of the problem, and I will work with Congress on any good-faith proposal that does not raise the payroll tax rate or harm our economy.”
But he left open the possibility that by pledging to keep future benefits “equal” to today’s benefits, maintaining Social Security’s solvency could require the coming wave of middle-class baby boom retirees to receive fewer benefits in later years than they would otherwise.
“In terms of the definition of … whose benefits would rise faster and whose wouldn’t, that’s going to be part of the negotiating process” with Congress, Mr. Bush said. “The lower-income people’s benefits would rise faster.”
White House spokesman Scott McClellan said after the president’s press conference that all retirees would continue to see their benefits rise.
“Under his approach, benefits would increase based on wages for lower-income workers and inflation for the wealthiest, and those in between would see their benefits go up on a sliding scale. That is the progressive-indexing approach,” the spokesman said.
Mr. Bush referenced a plan by Robert Pozen, an investment manager and Democratic member of Mr. Bush’s Social Security panel, who has suggested that Social Security no longer tie retiree benefit payments solely to wages — instead pegging them to prices, which historically rise slower than wages — for some retirees.
Senate Minority Leader Harry Reid criticized the president’s plan even before it was revealed.
“Though the word ‘progressive’ may lead you to believe that this plan provides some progressive benefit for seniors, the truth is that this plan will provide deep benefit cuts for middle-class seniors,” the Nevada senator said in a “prebuttal” statement.
“It is just another wrinkle in the bad privatization plan this president refuses to give up,” he said.
But in an opening statement, Mr. Bush said he has spent much of the past 60 days traveling the country to assure elderly Americans that Social Security will not be abandoned.
“Millions of Americans depend on Social Security checks as a primary source of retirement income, so we must keep this promise to future retirees as well. As a matter of fairness, I propose that future generations receive benefits equal to or greater than the benefits today’s seniors get,” he said.
Mr. Bush last night continued to press his call for personal accounts to allow younger Americans to control and invest a portion of their Social Security payments, which would “replace the empty promises being made to younger workers with real assets, real money.”
“I believe the best way to achieve this goal is to give younger workers the option, the opportunity if they so choose, of putting a portion of their payroll taxes into a voluntary personal retirement account,” the president said.
On energy, the president said there is no quick fix for the current crunch — with gas prices averaging more than $2.20 per gallon — and acknowledged that “millions of American families and small businesses are hurting because of higher gasoline prices.”
Mr. Bush applauded the House for passing his energy bill and called on the Senate “to act on this urgent priority,” while acknowledging that “the energy bill is certainly no quick fix.” He called on Congress to address the “root causes.”
“You can’t wave a magic wand. I wish I could. … It just doesn’t work that way,” he said. “We haven’t had an energy policy in this country. And it’s going to take us awhile to become less dependent on foreign sources of energy.
On foreign policy, Mr. Bush made clear his displeasure with Russian President Vladimir Putin’s decision to sell missiles to Syria.
“We didn’t appreciate that,” he said.
Mr. Bush also said he is pressing Iraq’s new prime minister, Ibrahim al-Jaafari, to refrain from changing the Iraqi security force now under training by the U.S. military.
On North Korea, Mr. Bush said he wanted to reach a diplomatic solution in six-nation talks that would pressure the communist nation to abandon its nuclear weapons program.
Although the United States has raised the possibility of taking the issue to the United Nations, the president said such a move would require a consensus, noting that some parties in the talks with North Korea have the ability to veto any U.N. resolution.
“And what we want to do is to work with our allies on this issue and develop a consensus, a common approach,” he said.