- The Washington Times - Thursday, May 19, 2005

Economists and retirement gurus told the House Ways and Means Committee yesterday that it is critical to increase personal savings and make other retirement improvements in addition to Social Security reform.

But panel Democrats said they won’t be enticed into supporting a broad retirement bill if it includes creating private accounts within Social Security.

“Attempts to widen the lens in this or any other hearing will not blur the focus on Social Security privatization,” said Rep. Sander M. Levin, Michigan Democrat.

“We need to consider the broader issues of retirement,” Mr. Levin said, but added: “What’s standing in the way … is the president’s demand for private accounts.”

Committee Chairman Bill Thomas, California Republican, is holding a series of hearings and aims to craft a bill that attracts bipartisan support by both fixing Social Security’s long-term solvency problems and aiding retirees by improving their options for pensions, personal savings and long-term care. He has not said whether private accounts are essential to his vision.

Congress should recognize the “declining viability” of a Social Security system in which current workers pay for current retirees and should shift to one in which current workers pre-fund their own retirement, Richard Jackson, director of the Global Aging Initiative at the Center for Strategic and International Studies, told the panel.

President Bush’s idea to divert a portion of the Social Security payroll tax into personal retirement accounts is a great way to do that, said John C. Goodman, president of the National Center for Policy Analysis.

Mr. Goodman said private accounts create ownership rights and allow workers investment choices, greatly increasing the odds that “funds invested today will be able to pay retirement benefits tomorrow.”

But Peter R. Orszag, director of the Retirement Security Project and economist at the Brookings Institution, said he favors boosting retirement savings using techniques other than private accounts.

Mr. Orszag said people automatically should be enrolled in workplace plans such as 401(k)s, with the choice of opting out if they don’t like it — a concept Mr. Thomas is interested in as well. Mr. Orszag also said people should be able to simply check a box on their tax form and have part of their tax refund go directly into their retirement account.

“Both sides of the Social Security debate can embrace these common sense reforms,” Mr. Orszag said.

Hal Daub, chairman of the Social Security Advisory Board, suggested simplifying pension regulations, giving people tax incentives to buy long-term health care and encouraging employers to maintain and offer pensions and 401(k)s.

During the hearings, Democrats tried to get Mr. Thomas to promise that he won’t sneak the Social Security private-accounts idea into the larger retirement bill he aims to create.

Rep. Richard E. Neal, Massachusetts Democrat, asked Mr. Thomas to clarify his position.

Mr. Thomas, however, said he has “no interest” in “playing ‘gotcha.’”

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide