Tapping Surplus in Social Security Draws Skepticism
WASHINGTON — House Republicans introduced a bill Wednesday to use annual surpluses in the Social Security system to finance individual investment accounts for workers, but Democrats and budget analysts said the proposal would blow at least a $600-billion hole in the federal budget.
Republicans on the House Ways and Means Committee fleshed out the idea, proposed last week by Sen. Jim DeMint (R-S.C.), to carve up the Social Security surplus into investment accounts for workers under age 55.
That surplus is now invested by the Social Security Administration in government bonds, and the Treasury Department uses proceeds from the bonds to pay for government programs.
Many members of Congress said their constituents regarded this practice as equivalent to stealing from their retirement money to pay for highway construction and farm subsidies. That gives supporters of the bill hope that the proposal will have enough political appeal not only to unite Republicans but to attract a few Democrats, who have been unified in refusing to consider the accounts.
However, so far there is no sign of Democratic support. And an important Republican, House Ways and Means Committee Chairman Bill Thomas of Bakersfield, welcomed the new bill in a way that made its future seem less than rosy.
"This proposal will likely form the basis for one of the components of a developing retirement security package," said Thomas, who would probably be lead author of any Social Security legislation that the House voted on this year. Thomas has said he would like a single far-reaching bill to overhaul the Social Security, pension and tax systems.
Democrats criticized the latest GOP bill as proof that Republicans were interested not in guaranteeing the long-term solvency of Social Security but in substituting risky investment accounts for today's guaranteed retirement benefit.
"This shows that Republicans want privatizing at all costs," said Rep. Earl Pomeroy (D-N.D.), a Ways and Means Committee member.
Some Republican supporters of individual accounts criticized the new bill as doing nothing to shore up Social Security's finances with either benefit cuts or tax increases.
"You must eat your spinach before having dessert," said Rep. Jim Kolbe (R-Ariz.), author of a wide-ranging Social Security bill, "and this plan only offers dessert -- the personal retirement accounts."
