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Personal Accounts Hit a Wall

Most Americans polled support working out Social Security's money troubles but they reject the controversial aspect of President Bush's plan.

THE NATION

April 09, 2005|Warren Vieth, Times Staff Writer

For example, he has called Social Security's long-term shortfall an "accelerating problem" that lawmakers should address this year, and said he was open to a range of restructuring options. He has begun characterizing personal accounts as "an interesting idea" he hopes they will consider.

Key Republicans in Congress, meanwhile, have suggested coming to terms with Social Security's solvency problems before wading into the debate over personal private accounts, which by themselves would do little to bridge the projected gap between future payroll tax collections and benefit payouts.


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Government accountants estimate Social Security benefits will begin to exceed payroll tax collections in 2017 as baby boomers retire en masse, and the Social Security trust fund will be depleted by 2041. Many experts say it will require some combination of tax increases and benefit reductions to bring the system into balance, and the adjustments will be less severe if made sooner rather than later.

Some of the president's allies say they are afraid the White House will ultimately conclude personal accounts are not politically viable in the face of public ambivalence and Democratic opposition, but will feel compelled to embrace a restructuring bill that raises taxes and reduces benefits to shore up Social Security's finances.

"I don't think they want to go into the midterm elections next year with the Democrats able to say they defended America against the undoing of Social Security," said one administration advisor who spoke on condition of anonymity. "They'd rather end up with a piece of legislation, even if it's flawed or not what they wanted."

Such concerns reflect the mixed signals being sent by opinion polls and other public feedback midway through the administration's "60 Stops in 60 Days" barnstorming tour to promote restructuring.

Surveys show majorities of Americans now agree with the president that Social Security faces a serious cash-flow problem, and some members of Congress say their constituents are expressing similar sentiments.

"The president has made some headway," said Senate Finance Committee Chairman Charles E. Grassley (R-Iowa). "People are seeing Social Security as something Congress ought to be dealing with.... That's quite an accomplishment in the sense of where people were three months ago."

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