WASHINGTON — House Republican leaders pledged to seek a vote this year on legislation creating a scaled back version of President Bush's call for personal retirement accounts under Social Security.
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The measure "begins to take that Social Security trust fund and put it into an account that will be there" for wage earners, Speaker Dennis Hastert, R-Ill., said at a news conference Wednesday.
Democrats swiftly attacked the plan. Rep. Steny Hoyer, D-Md., said Republicans were setting up a "shell game" out of a desire to undermine the program.
Republicans said the measure would create personal accounts for younger workers, and some of the funds would be used to replace part of their traditional benefit. At the same time, they added, the accounts could be inherited under some circumstances.
The program would also raise the government's official deficit estimates by as much as $1 trillion over a decade, a development that could increase pressure on lawmakers to cut spending or raise taxes in the future.
Not a permanent solution
The program would be temporary, lasting only as long as Social Security takes in more in payroll taxes than it spends in benefits — 2016 under official forecasts.
The announcement by Hastert and other GOP leaders marked a turning point in the politically charged struggle over Social Security, the first time senior Republicans in either house of Congress have pledged to put legislation to a vote.
Rep. Roy Blunt of Missouri, the GOP whip, said that would come either in July or September.
"The Democrats are not going to help us. We could probably get a lot farther down the road with some bipartisan help," said Rep. Deborah Pryce, R-Ohio.
GOP leaders said the measure would be incorporated into a broader bill making changes in pensions and other areas relating to retirement.
Mindful of the political sensitivity of the issue, Republicans began closed-door meetings at which members of the rank and file were advised how to describe the program to their constituents over the coming weeklong congressional break.
The Social Security changes would create personal accounts for workers under 55 by distributing funds that are left over each year after benefits are paid.
For the first three years, money going into the accounts would be invested in government bonds. After that, a commission would recommend additional options, such as mutual funds.
Under current law, Social Security loans its surplus funds to the Treasury, which uses the money to pay for other programs.
Guaranteed retirement benefits
Blunt said that under the legislation "every Social Security dollar gets spent to assure retirement benefits."
At the same time, Republican officials conceded that at least for the first three years the program is in operation, the government would continue to borrow the surplus funds and spend them as needed. The difference would be that the debt was owed to individuals rather than the Social Security trust fund as a whole.
Rep. Jim McCrery, R-La., one of the authors of the bill, said it would raise the government's official deficit forecast by between $774 billion and $1 trillion over the next decade.
House Republicans took their step as the senator in charge of putting Bush's Social Security ideas into law expressed renewed determination.
"Nobody really talks too much about Social Security," Sen. Charles Grassley, R-Iowa, said Tuesday of fellow GOP senators. The chairman of the Senate Finance Committee added: "They all want it to go away. I'm not going to let it go away."
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