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Bush cites plan would cut social security { April 29 2005 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2005/04/29/politics/29bush.htmlhttp://www.nytimes.com/2005/04/29/politics/29bush.html
April 29, 2005
THE OVERVIEW
Bush Cites Plan That Would Cut Social Security
By RICHARD W. STEVENSON and ELISABETH BUMILLER
WASHINGTON, April 28 - President Bush called on Thursday night for cutting Social Security benefits for future retirees to put the system on sound financial footing, and he proposed doing so in a way that would demand the most sacrifice from higher-income people while insulating low-income workers.
Saying the retirement program is headed for "bankruptcy," a term his opponents say is an exaggeration, Mr. Bush edged tentatively - but for the first time explicitly - into the most politically explosive aspect of the debate over how to assure Social Security's long-term health: the benefit cuts or tax increases needed to balance the system's books as the baby boom generation ages and life expectancy increases.
"Social Security's provided a safety net that has provided dignity and peace of mind for millions of Americans in their retirement," Mr. Bush said at the beginning of a news conference at the White House. "Yet there's a hole in the safety net because Congresses have made promises it cannot keep for a younger generation." [Excerpts, Page A22.]
He forcefully defended his nominee for United Nations ambassador, John R. Bolton, and rejected assertions that Democrats opposed to his judicial nominees are antireligion. He pledged to do everything possible to make gasoline prices more affordable and declined to put a timetable on withdrawal of troops from Iraq.
Mr. Bush held the news conference on the 99th day of his second term. It represented an effort to regain control of the national dialogue at a time when the White House is struggling to advance his Social Security plan, his approval ratings are falling, the economy seems to be slowing and Democrats have become more combative.
Conducted in the ornate East Room, it was only the fourth prime-time news conference Mr. Bush has held. In the past, he has held them at moments of crisis - days after the bombing of Afghanistan, weeks before the Americans marched into Baghdad, in the middle of last spring's renewed violence in Iraq.
In this case the White House had to overcome hurdles to make full use of the presidential megaphone. After the broadcast television networks balked at pre-empting some of their most popular entertainment programming, including NBC's "The Apprentice," the White House moved the starting time to 8 p.m. from 8:30. In the end, ABC, CBS and NBC carried it, although CBS and NBC cut away before it ended. [Page A23.]
As Mr. Bush called for a final question near the end of the hour-long session, he alluded to the competition for the nation's attention, saying, "I don't want to cut into any of these TV shows that are getting ready to air - for the sake of the economy."
Mr. Bush appeared relaxed and confident. He said it was inevitable that both parties should be resisting his call for change, whether on Social Security or on his demand that the Senate join the House in passing energy legislation.
"We're asking people to do things that haven't been done for 20 years," he said. "We haven't addressed the Social Security problem since 1983. We haven't had an energy strategy in our country for decades. And so I'm not surprised that some are balking at doing hard work. But I have a duty, as the president, to determine problems that are facing the nation."
His statement, and the question- and-answer session, ranged across a variety of topics, from high gasoline prices to the continued violence in Iraq and the partisan nature of Washington today.
But Mr. Bush used it primarily to begin the next phase of his strategy for persuading Congress to act on Social Security, providing some political cover for lawmakers by tiptoeing into the topic of the painful steps necessary to reach his goal of making the retirement program permanently solvent.
Mr. Bush cast the policy change he embraced as slowing the growth of future benefit increases. But its effect would be to reduce retirement benefits from the levels currently promised to workers.
"I believe a reformed system should protect those who depend on Social Security the most," Mr. Bush said. "So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off."
Mr. Bush did not provide any details during his hourlong appearance, and he stopped well short of offering a full-fledged plan to deal with Social Security problems. According to Social Security's trustees, the system has enough money to pay full benefits until 2041 by drawing on trillions of dollars owed to it by the federal government. After 2041, the system would be capable of paying about three-quarters of promised benefits.
But the outline for benefit cuts Mr. Bush provided Thursday night was based on a well-developed plan that he and other administration officials have been speaking of approvingly for several months.
Under the proposal, first developed by Robert Pozen, an investment executive who served on a Social Security commission appointed by Mr. Bush in 2001, benefit cuts would be imposed gradually on future retirees. The cuts would fall most heavily on people at higher-income levels. The cuts would be less, but still substantial, for middle-income workers. Low-income people would suffer no benefit cut at all.
Politically, the plan has the advantage, in the White House's view, of being attractive to moderate Democrats by making the system more progressive.
People who earn the average income who retire in 2055 would have their guaranteed Social Security benefit reduced under the plan by about 20 percent relative to what the system promises now. People at the high end of the income spectrum - those earning the maximum subject to Social Security payroll taxes or more - would have their benefits cut about 40 percent.
The proposal would close most of Social Security's long-term financial gap, about 70 percent, according to Social Security's actuaries. Mr. Bush said there were a "variety of options available to solve the rest of the problem," but he did not cite any.
He said he would work with Congress on any proposal that did not raise the payroll tax rate or harm the economy, a formulation that seemed to suggest he would resist any type of tax increase.
In the past, Mr. Bush has signaled a willingness to consider raising the cap on earnings subject to the payroll tax, currently $90,000, a step that many Republicans say would harm the economy by making it more expensive for businesses to add employees and hurt small businesses especially.
Mr. Bush showed no inclination to give in to Democratic demands that he drop the centerpiece of his Social Security proposal, allowing workers to divert a portion of their payroll taxes into investment accounts.
Any change to Social Security "must replace the empty promises being made to younger workers with real assets, real money," he said.
At the end of his heavily promoted 60-day Social Security tour, Mr. Bush could claim that Americans are more concerned about Social Security than they were at the beginning of the year, a development the White House says will leave Congress little choice but to act. But a steady stream of polls has shown support for his solution to be dissipating and approval ratings for his general handling of the issue falling.
In beginning to talk publicly and specifically about the need to cut benefits to meet his goal of making Social Security permanently solvent - a topic that politicians of all stripes have learned over the years can be toxic to their careers - Mr. Bush was making good on his promise, immediately after his re-election, to expend his political capital in pursuit of big goals.
But in doing so, he was shifting the focus of the debate away from what was supposed to be the more popular element of his plan, its call to allow workers who are 55 or younger this year to divert a portion of their payroll taxes in investment accounts, to taking away what the government has promised future generations of retirees.
Even before putting benefit cuts so explicitly on the table, his claims of success in moving public opinion and Congress toward dealing with Social Security this year did not mesh with the legislative reality in the Senate, where the Republican chairman of the finance committee, Charles E. Grassley of Iowa, is struggling to write a bill that could pass the panel with just Republican votes, never mind with Democratic support.
Mr. Bush dismissed a question about his sagging poll numbers, saying that paying attention to public opinion surveys is "kind of like a dog chasing your tail."
On Iraq, Mr. Bush declared that "we are winning," even though some in the country "want to go back to the old days of tyranny and darkness, torture chambers and mass graves."
He added, "It's not easy to go from a tyranny to a democracy."
He renewed his demand for the Senate to vote on his nominations for appellate court judges, implicitly supporting efforts by Senate Republicans to end the ability of Democrats to block a vote by filibustering.
But the president distanced himself from Senator Bill Frist, the majority leader, who joined a religious broadcast last week to denounce the Democratic filibuster as an attack on "people of faith."
"I don't agree with it," Mr. Bush said of those who criticized the Democratic efforts on religious grounds. "I think people are opposing my judicial nominees because they don't like the judicial philosophy of the people I've nominated."
The president also said people who disagreed with him should not be condemned because of their religious views.
Asked what he could do to bring down record high gasoline prices, Mr. Bush said he would continue to press oil-producing nations to produce more crude oil, saying that expanded foreign oil production is "the best way to affect the current price of gasoline."
He acknowledged as he has in the past that the energy bill he is seeking from Congress "is certainly no quick; fix you can't wave a magic wand," but suggested that it could help prevent a future price crunch by encouraging domestic production of energy, including production of fuel at the Arctic National Wildlife Refuge in Alaska, a proposal fiercely opposed by environmentalists.
"This is a problem that's been a long time in coming; we haven't had an energy policy in this country," he said. "If we had an energy strategy 10 years ago," he said, "we wouldn't find ourselves in a fix right now."
Copyright 2005 The New York Times Company
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