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What will Democrats offer on Social Security?

As the struggle over the future of Social Security takes shape in the coming weeks, will it sufficient for Democrats to simply keep repeating, "No crisis. Bush is a fear-monger"?
Senate Democratic Leader Harry Reid of Nevada will steer his party's effort to defeat President Bush's private accounts proposal. J. Scott Applewhite / AP
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There is one message congressional Democrats have for the public: Social Security is not in trouble; there is no crisis, as President Bush would have people believe.

But with Bush's inauguration over, and the struggle over the future of the retirement system heating up as Congress gets back to work, will it be sufficient for Democrats to simply keep repeating, "No crisis. Bush is a fear-monger"?

Will that be enough of a message to allow the Democrats to hold their own?

At a press conference this week, Senate Minority Leader Harry Reid of Nevada and House Minority Leader Nancy Pelosi of California indicated they were open to idea of offering proposals to strengthen Social Security. But first they want Bush to lay his cards on the table in the form of a specific proposal.

So far, Bush has said only that he wants to allow younger workers on a voluntary basis to take some of the money that they pay in payroll (FICA) taxes and set it aside in personal savings accounts.

“I’m tried of hearing all this posturing from the president,” complained Reid on Wednesday. “Let’s see him put something in paper for a change, rather than using his pulpit to speak.”

But, a reporter asked Reid, once Bush does lay out a more detailed private accounts proposal, will Democrats offer their alternative to it?

'A little bit better'
“We’re willing to work on taking a look at a program that we want to make a little bit better,” Reid replied.

“We will look to see how we can preserve it and have it go into the future in a very healthy way,” Pelosi added. “We want to anticipate any problem that may be there by addressing it in ways that are based on sound numbers.”

Democratic leaders have made it clear that for them the starting point for negotiations is removing the heart of Bush’s proposal, private accounts, a stance that augurs ill for a bipartisan bill.

But recent remarks from congressional Democrats offer some evidence that they sense the political momentum has moved to the point where they will be compelled to offer some alternative to Bush’s private accounts concept.

On Tuesday, two other Senate Democrats voiced their views on what might be done to shore up the system.

Sen. Byron Dorgan, D-N.D., didn't want to tip his hand on specific Democratic proposals, saying only that “we will, we should and we can make some adjustments as we move along with Social Security, but it needn’t require major surgery.”

Dorgan told reporters there is a "menu” of options, “none of them major, that can make thoughtful adjustments that would retain the basic Social Security insurance program as we know it. I don’t want to negotiate those here.”

Raise taxes on upper-income people
Sen. Debbie Stabenow, D-Mich., was more forthcoming with specifics than Dorgan: Congress should raise taxes on upper-income people to raise the revenue to keep the system solvent, by not extending the 2001 and 2003 tax cuts Congress enacted, when they expire in 2010.

“Speaking for myself, I think it would be reasonable to ask wealthiest Americans to accept 80 percent … rather than 100 percent” of the tax cuts enacted in 2001 and 2003. She said there is “substantial support” for this approach among Democrats in the Senate.

On the CBS program "Face The Nation" last Sunday, Sen. Edward Kennedy, D-Mass., said that at the point where the system has too little in funds to pay full scheduled benefits to retirees, “All you have to do is raise the payroll tax on that, and that would solve most of the kind of a problem that you’d have.”

According to the actuaries of the Social System, by 2042, when today’s 30-year old workers will be retired, the Social Security system will have insufficient funds and will be able to pay only pay 73 percent of promised benefits.

For higher-earning retirees who had been prudent enough to save money while they were working, this cut in benefits might be only an annoying pinch. But for low-income workers who’d retired without amassing personal savings, a 27 percent cut in promised benefits would impose hardship.

Democratic pollster Anna Greenberg said Wednesday that polling data indicate the public does not believe there is a crisis in the Social Security system, “so in a way, the Democrats are preaching to the converted.”

For that reason, she said, “they have to explain to people why the president's plan has negative consequences for them. It’s important for Democrats to offer alternatives so that they are not seen as partisan nay-sayers, but it is more important to offer a critique of the president’s plan.”

No party unanimity
At this point in the struggle over Social Security, neither Democrats nor Republicans are unified on what changes ought to be made. One Democrat, Rep. Allen Boyd of Florida, has signed on as a co-sponsor of Arizona Republican Rep. Jim Kolbe’s private accounts bill.

A Senate Democrat who will play an important role on the Senate Finance Committee, Sen. Blanche Lincoln of Arkansas, has discussed Social Security options with Sen. Lindsey Graham, R-S.C., who is trying to put together a bipartisan reform package.

A key House Republican offered some provocative views Wednesday. Ways and Means Committee chairman Rep. Bill Thomas opposed Kennedy’s idea of raising the FICA payroll tax. “Why do you have to fund it (Social Security) in that way? There are other ways to deal with the issue that are smarter.” This seemed to open the door to paying for Social Security from general revenue, an idea some Democrats also have favored.

Thomas also brought up another concern some Democrats have had: Raising the eligibility age for collecting benefits, as is now being done due to the 1983 reform bill, imposes a hardship on workers who do physical labor.

“There are certain occupations in which you're pretty well used up by 65, especially physical activities,” he said. “If you continue to play the age card and you stretch the age out, white collar (workers) can make it, (but) a lot of people who are still involved in physical activities are simply not being treated fairly in my opinion in terms of when and how they ought to be able to retire.”

At this stage of the maneuvering, the chances of Thomas and others crafting a bipartisan piece of legislation that would win broad support seem remote. One reason: Democrats do not trust Republicans’ motives in wanting to redesign the program.

“There are those who have not supported Social Security philosophically and have never supported it, and don’t support it now,” said Stabenow. “They would welcome an opportunity to radically change it.”

The two sides also remain worlds apart in their views of what Social Security ought to be. “Social Security is a core insurance program, not an investment program. The president is just confusing the two. I think part of it is because he has a constituency that has never liked Social Security,” Dorgan said Tuesday.