Is Social Security ‘Reform’ Dead?

Beset by issues ranging from the double-barreled hurricane recovery to the occupation of Iraq, President Bush nonetheless is laying plans to proceed on the hot-button topic of Social Security reform.

Even though some fellow Republicans are walking away from the politically risky plan to create private accounts for retirees, the president has displayed no sign of backing down and met Wednesday with members of his Commission to Strengthen Social Security.

Scott McClellan, the president’s press secretary, told reporters on Tuesday that Social Security remains “an important priority, particularly when we’re talking about addressing issues in terms of longer-term cost.”

“We know it’s headed on a course toward bankruptcy and it needs to be fixed, and the sooner we do it, the better and the less expensive,” McClellan said.

But the president, at least in this case, may not get what he wants.

Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, told home-state reporters this week that pressing business _ much of it dealing with hurricanes Katrina and Rita _ likely will force a postponement of Social Security reform until next year.

Meanwhile, Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, has yet to provide a proposal for consideration, and the GOP leadership hasn’t set a date for debate. The lower chamber is scheduled to adjourn just before Thanksgiving, leaving lawmakers with little time to mull over the merits of any package this year.

Senate Democratic leader Harry Reid of Nevada said his party remains “strongly opposed to any such privatization scheme,” arguing that the president’s plan “would require significant cuts in guaranteed benefits and a massive and permanent increase in our nation’s debt.”

“We are working to ensure all Americans have a secure retirement by strengthening Social Security, encouraging more Americans to save and protecting hard-earned pensions,” Reid said.

But foes of the Bush plan are, at this point, reticent to declare victory. Brad Woodhouse, communications director for Americans United to Protect Social Security, noted that the president “has not taken privatization off the table and there is no indication he is prepared to do so.” And while the GOP congressional leadership has remained quiet on the subject over the past several weeks, no one has stepped forward to declare it officially dead and buried.

“So, until someone with real control over the agenda in Congress … cries uncle and commits to pull privatization off the table for the remainder of this Congress, we are going to stand sentinel until the final nail is pounded into the coffin containing privatization,” Woodhouse said.

That hasn’t happened. House Speaker Dennis Hastert, R-Ill., told reporters last week that Social Security “is something very important.”

“It’s something we’ve talked about doing and when we decide to move forward we’ll let the press know,” he said.

Before Katrina hit, Bush declared Social Security reform as his top domestic priority. Citing excruciating fiscal problems _ the growing number of the nation’s retirees means Social Security trust funds could run dry by 2042 _ the president sought to revamp the system.

Under the plan, younger workers could divert part of their Social Security taxes into federally approved private accounts that would be invested in stocks and bonds. Retirees and those near retirement age would continue under the current system. Account holders could pass on the assets to family members after they die.

Opponents argued that the Bush plan would abolish the guaranteed payments retirees rely on, and that it would also open the door to potential ruin if the stock market went south and placed further strain on the Social Security trust fund.

Bush has openly campaigned for reform, undertaking a “100 cities in 100 days” tour with other administration officials to sell the idea, but polls indicate the public remains uneasy about the initiative. Few surveys have been conducted on the issue over the past few weeks because of other concerns. But an Associated Press poll conducted by Ipsos-Public Affairs in early August showed that only 33 percent of respondents approved of the manner in which Bush was handling Social Security, while 63 percent disapproved.

Bush loyalists continue to search for a way to salvage the reform effort without alienating voters and placing GOP majorities in the House and Senate in jeopardy. Sen. Jim DeMint, R-S.C., is trying to rally support for a compromise that would use the current surplus in Social Security trust funds to open private accounts.

Michael Tanner, director of the Project on Social Security Choice at the Cato Institute, a Washington-based libertarian think tank, said the DeMint plan shouldn’t be the final word on reform, but cited it as “a reasonable first step.”

“These proposals would give workers significantly more ownership, inheritability and choice than they have under the current system,” he said. “They may also force Congress to become more fiscally responsible.”

But Republicans are growing increasingly wary of dealing with the federal retirement system. Several Republicans _ the latest being Rep. Jerry Weller of Illinois, a member of the Ways and Means Committee _ are walking away from the president’s initiative.

“American seniors can be grateful that sinking poll numbers, Republicans’ desire to save their political skin and united Democratic opposition are forcing the GOP majority to abandon their reckless privatization plan,” said Bill Burton, communication director for the Democratic Congressional Campaign Committee.

(Contact Bill Straub at StraubB(at)