Two of President Bush’s top advisers refused on Sunday to rule out the possibility that wealthy people might have to pay more to help cover the cost of his move to partially privatize Social Security.
Neither Treasury Secretary John Snow nor Andrew Card, the White House chief of staff, would say whether Bush’s ideas about overhauling the federal retirement program would include raising the limit on incomes subject to Social Security taxes.
People currently pay those taxes on income up to $87,900. That level will climb to $90,000 next year. One proposal to help compensate for the private accounts would raise or eliminate the tax cutoff, which would mean that wealthier people would pay more.
Asked on ABC’s “This Week” whether that was possible, Card said: “The rate that you and I pay, contribute, to our Social Security, the president does not want to see that rate increased.” He would go no further in subsequent questioning.
Card calls for ‘open, honest’ debate
Both Card and Snow, who appeared on “Fox News Sunday,” said Social Security is beyond repair as it now stands. They said details of a plan to overhaul it remain to be worked out.
Card suggested “an open and honest debate about all of the ramifications” of Bush’s ideas.
“Let’s get smart people like Alan Greenspan involved, and members of the House and the Senate, and the president will be looking for wise counsel as he prepares to put a package together.” Greenspan is the longtime chairman of the Federal Reserve, highly respected in Congress for his stewardship of the economy.
Asked whether Bush’s ideas would remove guarantees of Social Security benefits to younger workers, Card said: “Under no one’s plan will younger workers receive benefits they’ve been promised because the Social Security system doesn’t have the financial underpinning, the foundation to support the expectations of social security 75 years from now, 50 years from now.”
Bush expects to present a plan to Congress in his budget proposals in February.
Estimated cost: Nearly $2 trillion
What's been laid out so far is that people retiring or near retirement would suffer no cuts in benefits, Social Security taxes would not go up and younger workers could opt into a 401(k) style private investment plan with part of their contributions.
Estimates of the costs run close to $2 trillion over 75 years; under current rules, Social Security would be spending more than it takes in by 2018.
“Let me say we don’t have a plan yet, so all of these numbers on financing are entirely speculative,” Snow said. “Let me say this, though: that if we get a real fix here — we have to get a real fix — if there’s a real fix, we will be able to finance the transition costs.”
Snow said the most important element of the Bush’s ideas is his determination not to allow higher Social Security taxes. He contended Europe’s socialist economies during the second half of the 20th century showed high payroll taxes hurts employment and the economy.
“We don’t want to go the way of Europe,” Snow said. “We want to keep robust employment levels and growth levels. So, ruling out increases in payroll taxes is awfully important.”