Six months after Republicans began selling Social Security reform, they all but acknowledge that wide-scale changes won’t happen this year. But knowing they must do something, they are pushing a narrower Social Security proposal in the House.
President Bush continues to campaign for comprehensive reform of the system, but Democrats oppose what they call privatization. Congressional Republican leaders realize the public expects action after hearing about the issue for months.
“We’ve told everyone the house is on fire. It’s time to offer them a fire hose or a bucket or maybe a glass of water, depending on what the Senate can pass,” said Rep. Adam H. Putnam, Florida Republican.
The answer, at least for House Republican leaders, seems to be a proposal to create personal accounts for workers younger than 55 using Social Security’s annual surpluses. Republicans bill it as a first step in reform, although the plan doesn’t fix long-term solvency problems.
Although some Republicans have said a solvency fix is still achievable in a final House package, it doesn’t seem likely.
“We tried to solve the whole problem. We couldn’t do that, so we took the one piece Americans are most concerned about,” said Rep. John Shadegg, Arizona Republican and chairman of the House Republican Policy Committee.
Larry Hunter, vice president and chief economist for the Free Enterprise Fund, said leaders couldn’t achieve consensus in the House for a permanent Social Security fix, but they also couldn’t face the 2006 electorate without acting on the president’s wishes. Therefore, he said, they combined private accounts, which most Republicans support, with the popular idea of stopping the government from raiding the Social Security surplus.
“It’s not an exit strategy; it’s an entrance strategy,” he said.
Mr. Hunter said that even if the new proposal fails in the Senate, it “inoculates” House Republicans from attacks on the issue in the 2006 elections.
“If it works, you’ve got a great victory. If it fails [in the Senate], well you don’t get hurt,” he said.
He warned against adding benefit changes or other solvency provisions proposed by House Ways and Means Committee Chairman Bill Thomas, California Republican. “There’s a real chance he will undermine the whole effort and it will collapse,” Mr. Hunter said.
Eugene Steuerle, senior fellow at the Urban Institute, said that without Democratic support, Republicans had to find a seemingly painless way to act on Social Security.
“Once a president comes on board and says he wants Social Security reform as his major domestic initiative, it’s very hard for his party not to deliver something,” Mr. Steuerle said. “And if what they’re going to deliver is going to kill them at the polls because the other party isn’t going to make any concessions … then they’re looking for something that looks like a free lunch.”
That “free lunch,” he said, in the long run will weaken the Social Security system and worsen the deficit.
Senate Finance Committee Chairman Charles E. Grassley, Iowa Republican, said Republicans on his panel agree on solvency provisions but are “much more divided” over personal accounts. His staff is preparing proposals for personal accounts to present to the group this week.
Meanwhile, the Senate is bracing for a bruising fight over a Supreme Court nominee that could hinder any action on Social Security as well as other issues.