Thursday, May 12, 2005

Democrats on the House Ways and Means Committee yesterday criticized President Bush’s proposals to fix Social Security yesterday, while Republicans challenged Democrats to offer a plan of their own — as former President Bill Clinton has urged.

At the first of several hearings scheduled to examine specific proposals for Social Security reform, Democrats accused Mr. Bush of trying to privatize the program and slash benefits.

“He set the agenda,” said Rep. Sander M. Levin, Michigan Democrat. “You don’t like the term. I’m sorry. It’s privatization.”

Rep. Jim McCrery, Louisiana Republican, accused Democrats of mischaracterizing Republican proposals while refusing to offer any of their own.

He and Rep. Dave Camp, Michigan Republican, noted that Mr. Clinton, in a recent ABC interview, said he thinks Democrats “should say what they are for on Social Security.”

“I do too, President Clinton,” Mr. McCrery said. “Show us what benefit cuts and tax increases you want us to implement.”

Committee Chairman Bill Thomas, California Republican, said he aims to craft a broad bill this summer to fix Social Security’s fiscal problems and improve pensions, individual retirement accounts, 401(k) plans and other retirement programs. He said he was pleased that several of the eight witnesses at yesterday’s hearing agreed with a broader approach.

Robert C. Pozen, chairman of MFS Investment Management, defended his idea to slow the growth rate of Social Security benefits for middle- and upper-income Americans while keeping a high growth rate for low-income workers. Mr. Bush has endorsed that idea as a way to bring the system into solvency.

“In itself, it would reduce the long-term deficit by 70 percent,” Mr. Pozen said.

Democrats said that idea amounts to massive benefit cuts for many Americans.

Mr. Pozen said raising the retirement age or increasing payroll taxes will not go far enough to fix the Social Security system. “We still would have to combine that with some benefit restraint,” he said.

Mr. Bush also has called for diverting part of the Social Security payroll tax into voluntary personal retirement accounts. Two witnesses at yesterday’s hearing presented plans that create large private retirement accounts.

Economist Lawrence Hunter, vice president of the Free Enterprise Fund, said a bill crafted by Rep. Paul D. Ryan, Wisconsin Republican, “eliminates Social Security’s long-run deficits without cutting promised future Social Security benefits, without raising taxes and without hiking the retirement age.”

Republicans on the committee exchanged testy remarks with Jason Furman of the Center on Budget and Policy Priorities, who said Mr. Bush’s Social Security recommendations are too costly and risky. He said the president’s plan would be “adding to the debt and exhausting the trust fund even earlier and making Social Security’s financial position worse.”

Republicans accused Democrats of refusing to help fix the problem. “The silence is deafening,” said Rep. E. Clay Shaw Jr., Florida Republican.

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