Congressional GOP Revamps Bush’s Social Security Plan

NEW YORK -- Experts from two think tanks close to the Social Security debate said they believe the House of Representatives will likely abandon President Bush’s Social Security proposal, Newsday reported Tuesday.

Instead, the House Ways and Means Committee appears set in the coming weeks to offer a plan putting only surplus Social Security revenues in private accounts, they said. Such a bill would not make the system solvent longterm nor allow workers to contribute to private accounts -- two pillars of Bush's plan. It also lacks Democratic support.

The committee is looking at the watered-down proposal because of stiff Democratic opposition and a lack of unity among Republicans about Bush's plan, said Michael Tanner, the Social Security expert at the Cato Institute.

Under the plan, the government would distribute excess payroll taxes to workers based on how much they pay into the system. So if the system has a 2.2 percent surplus in 2006, as expected, a worker making $35,000 would receive $770 in his or her account. But the contributions to the private accounts would end in 2017, when the system is due to stop running a surplus.

"Republicans are hoping no one will notice their rapid retreat from the issue of Social Security," said Jason Furman, a senior fellow at the Center on Budget and Policy Priorities. He also said the House was giving up on the Bush proposal.

-- NYSSCPA.org News Staff

Posted on 8/30/05