Bush May Alter Private-Accounts Plan

WASHINGTON -- The Bush administration is weighing a change in its proposal for private Social Security accounts that would make them more attractive to workers, though potentially more costly to the government, The Wall Street Journal reported Thursday.

President Bush wants to let workers divert some payroll taxes to personal investment accounts in exchange for accepting lower Social Security benefits at retirement than workers who shun private accounts.

The White House has said the formula for calculating benefit reductions would make private accounts a better deal for workers who choose them, as long as the stocks and bonds in the accounts earn at least 3 percent a year above inflation.

The White House is reconsidering that formula, say people familiar with its deliberations. A lower number would give an account-holder a bigger benefit, thereby making the option more attractive to workers. National Economic Council director Allan Hubbard said in an interview Wednesday that the administration is "open-minded" about a lower percentage "offset" than 3 percent.

-- NYSSCPA.org News Staff

Posted on 3/24/05