Republican wants to raise retirement age

/ Source: The Associated Press

A leading Republican senator is offering to raise the Social Security retirement age from 67 to 68, while Democrats maintain their opposition to the president’s plan to overhaul the retirement program with private investment accounts.

Nebraska Sen. Chuck Hagel’s plan would raise the age that retirees could receive full benefits, beginning in 2023. “We are living longer,” Hagel said Sunday on CBS’ “Face the Nation.” “So when you look at the total universe of this, I think that makes some sense to extend the age.”

But some leading Democrats said they could not support Hagel’s plan because he would pay for private accounts by borrowing and increasing the nation’s deficit. Sen. Edward M. Kennedy, D-Mass., told ABC’s “This Week” that would be “a great threat to seniors” because it would raise interest rates.

Personal account debate
President Bush plans to travel across the country this week as part of his 60-day push to persuade a skeptical public to support personal retirement accounts. The president’s plan would allow workers under age 55 to divert up to 4 percentage points of their Social Security taxes into private stock and bond investment accounts in exchange for lower guaranteed future benefits.

White House counselor Dan Bartlett said that while polls show most Americans don’t like the idea, most of the opposition is coming from people over 55 who won’t be affected by it. He said on “Fox News Sunday” that Bush will try to reassure those older Americans that their benefits won’t change.

Bartlett said the White House wants to work with Democrats, but Democrats are vowing to fight unless the president is willing to change his plan to divert Social Security funds into private accounts.

“If the president takes privatization off, if he makes a commitment to the future of Social Security, we’re ready to sit down on a bipartisan basis and put everything on the table,” Sen. Dick Durbin, D-Ill., said on NBC’s “Meet the Press.” “That’s the only way to start a good-faith negotiation.”

Democrats also object to the president’s call for personal accounts because they would not make Social Security solvent. Treasury Secretary John Snow, appearing on ABC, maintained the personal accounts still must be part of the solution.

“They don’t in and of themselves bring those lines together,” he said. “But we’ll never get a fair and equitable solution to the Social Security problem unless personal accounts are an integral part of the solution.”

Hagel’s plan, which he said is the first Social Security reform bill being introduced in the Senate this year, would allow workers 45 and younger to keep their guaranteed Social Security account, but set up a voluntary program of personal accounts that could supplement their retirement income.

“The president has not laid down a specific plan as to how he’s going to get us to solvency,” Hagel said. “I do that. It doesn’t mean mine’s best, but I do it.”

Bartlett indicated the president may consider raising the amount of income that is taxed to fund Social Security above the current $90,000 per person. “He says the only thing that’s off the table is raising the rate” at which income is taxed, Bartlett said on CNN’s “Late Edition.”

Greenspan comments
Also on Sunday, House Democratic Leader Nancy Pelosi said on Fox that because of Federal Reserve Chairman Alan Greenspan’s support of personal accounts, some people “have seriously questioned the independence of the Fed.” She declined to say whether she would describe Greenspan as a “political hack,” as Senate Democratic Leader Harry Reid did last week.

Other Democrats distanced themselves from Reid’s comment. Sen. Joe Lieberman, D-Conn., said on CNN that Greenspan is “sometimes very mistaken,” but he is an “above-average human.” Durbin said he has disagreements with Greenspan, but that calling him a political hack “may have been slightly too strong.”