Thomas Weighs Tax to Rescue Bush on Social Security

NEW YORK -- House Ways and Means Committee Chairman Bill Thomas wants to rescue President Bush’s Social Security plan with a broader legislative package that includes new savings incentives and long-term health-care benefits.

The plan, according to people who have discussed it with Thomas in recent days, could be financed by replacing at least part of the Social Security payroll tax with some form of consumption tax, Bloomberg News reported Wednesday.

The California Republican, who has outlined his thinking to key economic and political experts in recent weeks, is skeptical of Bush's proposal to divert some payroll taxes to personal accounts invested in stocks and bonds. Democrats have insisted the accounts must be taken off the table before they'll even consider compromising.

“A consumption tax could conceivably have legs,'' said Rep. Phil English, a Pennsylvania Republican and member of the Ways and Means Committee who is close to Thomas.

The panel will hold hearings next week that will “break the mold'' on Social Security and retirement savings, English said, declining to discuss specifics. People close to Thomas stress that any plan is fluid.

-- NYSSCPA.org News Staff

Posted on 5/4/05