http://www.washingtonpost.com/ac2/wp-dyn/A...anguage=printer
New Doubts On Plan For Social Security
House Republican Says Bush Plan Is Doomed, Seeks Review of System
By Mike Allen and Jonathan Weisman
Washington Post Staff Writers
Wednesday, January 19, 2005; Page A01
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) predicted yesterday that partisan warfare over Social Security will quickly render President Bush's plan "a dead horse" and called on Congress to undertake a broader review of the problems of an aging nation.
Thomas, one of Capitol Hill's most powerful figures on tax policy, is the highest-ranking House Republican official to cast doubt on the president's plan for creating individual investment accounts. He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."
"What I'm trying to get people to do is get out of the narrow moving around of the pieces inside the Social Security box," Thomas said at a forum on Bush's second term sponsored by the National Journal. "If we miss this opportunity . . . I think we will have missed an opportunity that may not present itself for another 20 years."
Bush's plan for allowing younger Americans to divert a third or more of their payroll taxes into private investment accounts to enhance their long-term benefits has drawn fire from Democrats, who say it is a risky step toward partial privatization of Social Security. Many Republicans have expressed reservations about the political wisdom of Bush's vision for restructuring the nearly 70-year-old retirement and income security program, and Thomas's comments will fuel the controversy.
The mercurial Thomas, whose chairmanship of the tax-writing committee allows him to heavily influence the fate of Bush's domestic agenda, also said he wants to consider revisions to the tax code simultaneously with debate over Bush's private-account proposal. The White House had indicated a preference to put off revisions to the tax code until next year.
"Sometimes elevating it to a larger, universal solution makes it easier because you bring more people to the table," Thomas said. "The problem with Social Security, narrowly, is that it becomes more of a partisan issue than you would like."
Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. A House leadership official said that not even Republicans on Thomas's committee would vote for that idea. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
White House spokeswoman Claire Buchan said Bush recognizes that he will have to work with Congress on any Social Security deal and understands that legislation often changes during the process. "The president values Chairman Thomas's views and looks forward to working with him and other members of Congress as we press forward on very important issues facing the American people," she said.
Bush has spoken generally about his plans for Social Security, and he is expected to expand on his concept when he delivers his State of the Union address Feb. 2. But the administration has not submitted a detailed plan for creating the new investment accounts and covering the potentially huge costs associated with the transition to the new system.
Thomas's comments, which took the White House by surprise, reflected some Republicans' view that the White House has mishandled the plan's rollout and that a fresh start is needed to allow a chance for getting Democratic support.
Speaking two days before Bush's second inauguration, Thomas said Bush's plan as it has been described "cannot, given the politics of the House and the Senate," win passage in both chambers.
"Every breath that's spent on discussing that plan is an attempt to lay a political ground war for the next election," Thomas said. "Save those breaths. Talk about what we need to do now that the president's plan is on the table so that we can address, in a legislative way, a solution on a bill the president could sign. That would be, I think, a positive gesture. And I'm looking forward to those discussions and not a continual beating of what will soon be a dead horse of their proposal."
The chairman's staff said the "dead horse" comment was a reference to Thomas's expectation that Democrats would continue to harp on what they view as politically damaging elements of the plan even if they have been modified.
Gene B. Sperling, who chaired the National Economic Council in the Clinton White House and participated in the panel with Thomas, said the chairman's comments pointed the way to a possible compromise that would include many Democrats.
"Thomas was accusing the White House and many Democrats of being stuck in their ideological corners, and he wanted to broaden the debate," Sperling said.
White House officials have said they believe that Social Security legislation must pass this year if it is going to be enacted in Bush's second term, but several lawmakers said Thomas's ideas sounded like a multi-year endeavor. Thomas said he will start with the idea that the legislation can be completed in a year.
Social Security is funded by taking 12.4 percent of a worker's wage and sending that money to current beneficiaries. An additional payroll tax funds Medicare. Thomas said the payroll tax can be "a problem or a culprit in trying to create more jobs."
"There are other ways to achieve revenue increases that -- in fact, by changing the tax code -- enhance business's competitiveness, rather than retarding it," he said.
The tax is considered regressive because it is levied on the first $90,000 of income and higher earnings are untaxed, meaning that poorer people pay a higher percentage of their income to Social Security than rich people. Thomas would not say what alternative he favors, but the most obvious would be through a higher income tax.
Even some White House economists are speaking of "thinking outside the box" on Social Security financing, said a White House official, who spoke on the condition of anonymity because the president's plan has not been unveiled.
Thomas was asked several times if Bush's plan for personal accounts would be an essential part of the package. He did not directly answer, although he said the bill would have to be attractive enough so that Bush would sign it.
Full Version: Influential Repub says Bush SS plan a "dead horse"
Common Ground Common Sense > Issues that Affect Our Lives > Job Market, Fiscal, and Economic Policies > Job Market, Fiscal, & Economic Issues Archive
QUOTE(rox63 @ Jan 19 2005, 04:12 PM)
http://www.washingtonpost.com/ac2/wp-dyn/A...anguage=printer
New Doubts On Plan For Social Security
House Republican Says Bush Plan Is Doomed, Seeks Review of System
By Mike Allen and Jonathan Weisman
Washington Post Staff Writers
Wednesday, January 19, 2005; Page A01
He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."
also said he wants to consider revisions to the tax code simultaneously with debate over Bush's private-account proposal.
"Sometimes elevating it to a larger, universal solution makes it easier because you bring more people to the table," Thomas said. "The problem with Social Security, narrowly, is that it becomes more of a partisan issue than you would like."
Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
Thomas said the payroll tax can be "a problem or a culprit in trying to create more jobs."
"There are other ways to achieve revenue increases that -- in fact, by changing the tax code -- enhance business's competitiveness, rather than retarding it," he said.
Thomas would not say what alternative he favors, but the most obvious would be through a higher income tax.
New Doubts On Plan For Social Security
House Republican Says Bush Plan Is Doomed, Seeks Review of System
By Mike Allen and Jonathan Weisman
Washington Post Staff Writers
Wednesday, January 19, 2005; Page A01
He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."
also said he wants to consider revisions to the tax code simultaneously with debate over Bush's private-account proposal.
"Sometimes elevating it to a larger, universal solution makes it easier because you bring more people to the table," Thomas said. "The problem with Social Security, narrowly, is that it becomes more of a partisan issue than you would like."
Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
Thomas said the payroll tax can be "a problem or a culprit in trying to create more jobs."
"There are other ways to achieve revenue increases that -- in fact, by changing the tax code -- enhance business's competitiveness, rather than retarding it," he said.
Thomas would not say what alternative he favors, but the most obvious would be through a higher income tax.
When I read this, I thought, uh-oh flat or sales tax. I edited the text down to what he said. I cannot imagine black men, later white men, later black women and finally white women retiring at different ages. Also, without payroll, then whatever the deficit has left over? I think that this may be ok but it is potentially another weird pushing of taxes to exempt corporations (employer share) from taxes. Does anyone else hate that no one is willing to really say what they are proposing. No one wants their proposal to have public airing. I see nothing in what he said that leads to the conclusion: "higher income tax".
QUOTE(Tadpole @ Jan 19 2005, 06:21 PM)
When I read this, I thought, uh-oh flat or sales tax. I edited the text down to what he said. I cannot imagine black men, later white men, later black women and finally white women retiring at different ages. Also, without payroll, then whatever the deficit has left over? I think that this may be ok but it is potentially another weird pushing of taxes to exempt corporations (employer share) from taxes. Does anyone else hate that no one is willing to really say what they are proposing. No one wants their proposal to have public airing. I see nothing in what he said that leads to the conclusion: "higher income tax".
Yes, I hate it that they won't tell the details of any plan. It makes a person suspicious and tells us that we wouldn't like their plan.
Changing the tax would muddy the waters and that is what the republicans want. Now we know how much we have contributed to our retirement and they can't deny it, but if it was mixed in with other taxes it would not be clear.
QUOTE(rox63 @ Jan 19 2005, 03:12 PM)
http://www.washingtonpost.com/ac2/wp-dyn/A...anguage=printer
New Doubts On Plan For Social Security
House Republican Says Bush Plan Is Doomed, Seeks Review of System
By Mike Allen and Jonathan Weisman
Washington Post Staff Writers
Wednesday, January 19, 2005; Page A01
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) predicted yesterday that partisan warfare over Social Security will quickly render President Bush's plan "a dead horse" and called on Congress to undertake a broader review of the problems of an aging nation.
Thomas, one of Capitol Hill's most powerful figures on tax policy, is the highest-ranking House Republican official to cast doubt on the president's plan for creating individual investment accounts. He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."
"What I'm trying to get people to do is get out of the narrow moving around of the pieces inside the Social Security box," Thomas said at a forum on Bush's second term sponsored by the National Journal. "If we miss this opportunity . . . I think we will have missed an opportunity that may not present itself for another 20 years."
Bush's plan for allowing younger Americans to divert a third or more of their payroll taxes into private investment accounts to enhance their long-term benefits has drawn fire from Democrats, who say it is a risky step toward partial privatization of Social Security. Many Republicans have expressed reservations about the political wisdom of Bush's vision for restructuring the nearly 70-year-old retirement and income security program, and Thomas's comments will fuel the controversy.
The mercurial Thomas, whose chairmanship of the tax-writing committee allows him to heavily influence the fate of Bush's domestic agenda, also said he wants to consider revisions to the tax code simultaneously with debate over Bush's private-account proposal. The White House had indicated a preference to put off revisions to the tax code until next year.
"Sometimes elevating it to a larger, universal solution makes it easier because you bring more people to the table," Thomas said. "The problem with Social Security, narrowly, is that it becomes more of a partisan issue than you would like."
Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. A House leadership official said that not even Republicans on Thomas's committee would vote for that idea. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
White House spokeswoman Claire Buchan said Bush recognizes that he will have to work with Congress on any Social Security deal and understands that legislation often changes during the process. "The president values Chairman Thomas's views and looks forward to working with him and other members of Congress as we press forward on very important issues facing the American people," she said.
Bush has spoken generally about his plans for Social Security, and he is expected to expand on his concept when he delivers his State of the Union address Feb. 2. But the administration has not submitted a detailed plan for creating the new investment accounts and covering the potentially huge costs associated with the transition to the new system.
Thomas's comments, which took the White House by surprise, reflected some Republicans' view that the White House has mishandled the plan's rollout and that a fresh start is needed to allow a chance for getting Democratic support.
Speaking two days before Bush's second inauguration, Thomas said Bush's plan as it has been described "cannot, given the politics of the House and the Senate," win passage in both chambers.
"Every breath that's spent on discussing that plan is an attempt to lay a political ground war for the next election," Thomas said. "Save those breaths. Talk about what we need to do now that the president's plan is on the table so that we can address, in a legislative way, a solution on a bill the president could sign. That would be, I think, a positive gesture. And I'm looking forward to those discussions and not a continual beating of what will soon be a dead horse of their proposal."
The chairman's staff said the "dead horse" comment was a reference to Thomas's expectation that Democrats would continue to harp on what they view as politically damaging elements of the plan even if they have been modified.
Gene B. Sperling, who chaired the National Economic Council in the Clinton White House and participated in the panel with Thomas, said the chairman's comments pointed the way to a possible compromise that would include many Democrats.
"Thomas was accusing the White House and many Democrats of being stuck in their ideological corners, and he wanted to broaden the debate," Sperling said.
White House officials have said they believe that Social Security legislation must pass this year if it is going to be enacted in Bush's second term, but several lawmakers said Thomas's ideas sounded like a multi-year endeavor. Thomas said he will start with the idea that the legislation can be completed in a year.
Social Security is funded by taking 12.4 percent of a worker's wage and sending that money to current beneficiaries. An additional payroll tax funds Medicare. Thomas said the payroll tax can be "a problem or a culprit in trying to create more jobs."
"There are other ways to achieve revenue increases that -- in fact, by changing the tax code -- enhance business's competitiveness, rather than retarding it," he said.
The tax is considered regressive because it is levied on the first $90,000 of income and higher earnings are untaxed, meaning that poorer people pay a higher percentage of their income to Social Security than rich people. Thomas would not say what alternative he favors, but the most obvious would be through a higher income tax.
Even some White House economists are speaking of "thinking outside the box" on Social Security financing, said a White House official, who spoke on the condition of anonymity because the president's plan has not been unveiled.
Thomas was asked several times if Bush's plan for personal accounts would be an essential part of the package. He did not directly answer, although he said the bill would have to be attractive enough so that Bush would sign it.
New Doubts On Plan For Social Security
House Republican Says Bush Plan Is Doomed, Seeks Review of System
By Mike Allen and Jonathan Weisman
Washington Post Staff Writers
Wednesday, January 19, 2005; Page A01
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) predicted yesterday that partisan warfare over Social Security will quickly render President Bush's plan "a dead horse" and called on Congress to undertake a broader review of the problems of an aging nation.
Thomas, one of Capitol Hill's most powerful figures on tax policy, is the highest-ranking House Republican official to cast doubt on the president's plan for creating individual investment accounts. He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."
"What I'm trying to get people to do is get out of the narrow moving around of the pieces inside the Social Security box," Thomas said at a forum on Bush's second term sponsored by the National Journal. "If we miss this opportunity . . . I think we will have missed an opportunity that may not present itself for another 20 years."
Bush's plan for allowing younger Americans to divert a third or more of their payroll taxes into private investment accounts to enhance their long-term benefits has drawn fire from Democrats, who say it is a risky step toward partial privatization of Social Security. Many Republicans have expressed reservations about the political wisdom of Bush's vision for restructuring the nearly 70-year-old retirement and income security program, and Thomas's comments will fuel the controversy.
The mercurial Thomas, whose chairmanship of the tax-writing committee allows him to heavily influence the fate of Bush's domestic agenda, also said he wants to consider revisions to the tax code simultaneously with debate over Bush's private-account proposal. The White House had indicated a preference to put off revisions to the tax code until next year.
"Sometimes elevating it to a larger, universal solution makes it easier because you bring more people to the table," Thomas said. "The problem with Social Security, narrowly, is that it becomes more of a partisan issue than you would like."
Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. A House leadership official said that not even Republicans on Thomas's committee would vote for that idea. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
White House spokeswoman Claire Buchan said Bush recognizes that he will have to work with Congress on any Social Security deal and understands that legislation often changes during the process. "The president values Chairman Thomas's views and looks forward to working with him and other members of Congress as we press forward on very important issues facing the American people," she said.
Bush has spoken generally about his plans for Social Security, and he is expected to expand on his concept when he delivers his State of the Union address Feb. 2. But the administration has not submitted a detailed plan for creating the new investment accounts and covering the potentially huge costs associated with the transition to the new system.
Thomas's comments, which took the White House by surprise, reflected some Republicans' view that the White House has mishandled the plan's rollout and that a fresh start is needed to allow a chance for getting Democratic support.
Speaking two days before Bush's second inauguration, Thomas said Bush's plan as it has been described "cannot, given the politics of the House and the Senate," win passage in both chambers.
"Every breath that's spent on discussing that plan is an attempt to lay a political ground war for the next election," Thomas said. "Save those breaths. Talk about what we need to do now that the president's plan is on the table so that we can address, in a legislative way, a solution on a bill the president could sign. That would be, I think, a positive gesture. And I'm looking forward to those discussions and not a continual beating of what will soon be a dead horse of their proposal."
The chairman's staff said the "dead horse" comment was a reference to Thomas's expectation that Democrats would continue to harp on what they view as politically damaging elements of the plan even if they have been modified.
Gene B. Sperling, who chaired the National Economic Council in the Clinton White House and participated in the panel with Thomas, said the chairman's comments pointed the way to a possible compromise that would include many Democrats.
"Thomas was accusing the White House and many Democrats of being stuck in their ideological corners, and he wanted to broaden the debate," Sperling said.
White House officials have said they believe that Social Security legislation must pass this year if it is going to be enacted in Bush's second term, but several lawmakers said Thomas's ideas sounded like a multi-year endeavor. Thomas said he will start with the idea that the legislation can be completed in a year.
Social Security is funded by taking 12.4 percent of a worker's wage and sending that money to current beneficiaries. An additional payroll tax funds Medicare. Thomas said the payroll tax can be "a problem or a culprit in trying to create more jobs."
"There are other ways to achieve revenue increases that -- in fact, by changing the tax code -- enhance business's competitiveness, rather than retarding it," he said.
The tax is considered regressive because it is levied on the first $90,000 of income and higher earnings are untaxed, meaning that poorer people pay a higher percentage of their income to Social Security than rich people. Thomas would not say what alternative he favors, but the most obvious would be through a higher income tax.
Even some White House economists are speaking of "thinking outside the box" on Social Security financing, said a White House official, who spoke on the condition of anonymity because the president's plan has not been unveiled.
Thomas was asked several times if Bush's plan for personal accounts would be an essential part of the package. He did not directly answer, although he said the bill would have to be attractive enough so that Bush would sign it.
Apparently, Thomas wants to get social security out of pay roll since he says the matching 6.2% the employer pays is "retarding competiveness" and by him saying, "it can be a culprit in tryin to create more jobs".
There are other ways to deal with it . They could work it out with the other nations that they all have "social security" on their payroll. That would raise the living standards of all countries. We will never be able to compete with the Chinese anyway. They don't have the insurance, housing and other costs like we have.
They need to remember that if they keep whittling on everything there won't be much point in working. We just will have to turn around and give it all for health care, insurance, gas etc and still have to save for retirement. Other businesses can't thrive when over half the country has no money to buy extra goods.
Once they get Social Security off of payroll, then the employer won't be matching it. That is clear from his statement about competiveness. That would cut the Social Security FICA income in half. They don't want to tax the rich so what would that do to Social Security?
Since they want a flat tax and the workers would pay the same as the rich I can't fathom how it would work out. The vagueness of their plans worry me.
They are destroying everything good about America. America needs to be a good place to live, not just a good place to do business.
QUOTE(rox63 @ Jan 19 2005, 03:12 PM)
http://www.washingtonpost.com/ac2/wp-dyn/A...anguage=printer
New Doubts On Plan For Social Security
House Republican Says Bush Plan Is Doomed, Seeks Review of System
By Mike Allen and Jonathan Weisman
Washington Post Staff Writers
Wednesday, January 19, 2005; Page A01
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) predicted yesterday that partisan warfare over Social Security will quickly render President Bush's plan "a dead horse" and called on Congress to undertake a broader review of the problems of an aging nation.
Thomas, one of Capitol Hill's most powerful figures on tax policy, is the highest-ranking House Republican official to cast doubt on the president's plan for creating individual investment accounts. He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."
"What I'm trying to get people to do is get out of the narrow moving around of the pieces inside the Social Security box," Thomas said at a forum on Bush's second term sponsored by the National Journal. "If we miss this opportunity . . . I think we will have missed an opportunity that may not present itself for another 20 years."
Bush's plan for allowing younger Americans to divert a third or more of their payroll taxes into private investment accounts to enhance their long-term benefits has drawn fire from Democrats, who say it is a risky step toward partial privatization of Social Security. Many Republicans have expressed reservations about the political wisdom of Bush's vision for restructuring the nearly 70-year-old retirement and income security program, and Thomas's comments will fuel the controversy.
The mercurial Thomas, whose chairmanship of the tax-writing committee allows him to heavily influence the fate of Bush's domestic agenda, also said he wants to consider revisions to the tax code simultaneously with debate over Bush's private-account proposal. The White House had indicated a preference to put off revisions to the tax code until next year.
"Sometimes elevating it to a larger, universal solution makes it easier because you bring more people to the table," Thomas said. "The problem with Social Security, narrowly, is that it becomes more of a partisan issue than you would like."
Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. A House leadership official said that not even Republicans on Thomas's committee would vote for that idea. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
White House spokeswoman Claire Buchan said Bush recognizes that he will have to work with Congress on any Social Security deal and understands that legislation often changes during the process. "The president values Chairman Thomas's views and looks forward to working with him and other members of Congress as we press forward on very important issues facing the American people," she said.
Bush has spoken generally about his plans for Social Security, and he is expected to expand on his concept when he delivers his State of the Union address Feb. 2. But the administration has not submitted a detailed plan for creating the new investment accounts and covering the potentially huge costs associated with the transition to the new system.
Thomas's comments, which took the White House by surprise, reflected some Republicans' view that the White House has mishandled the plan's rollout and that a fresh start is needed to allow a chance for getting Democratic support.
Speaking two days before Bush's second inauguration, Thomas said Bush's plan as it has been described "cannot, given the politics of the House and the Senate," win passage in both chambers.
"Every breath that's spent on discussing that plan is an attempt to lay a political ground war for the next election," Thomas said. "Save those breaths. Talk about what we need to do now that the president's plan is on the table so that we can address, in a legislative way, a solution on a bill the president could sign. That would be, I think, a positive gesture. And I'm looking forward to those discussions and not a continual beating of what will soon be a dead horse of their proposal."
The chairman's staff said the "dead horse" comment was a reference to Thomas's expectation that Democrats would continue to harp on what they view as politically damaging elements of the plan even if they have been modified.
Gene B. Sperling, who chaired the National Economic Council in the Clinton White House and participated in the panel with Thomas, said the chairman's comments pointed the way to a possible compromise that would include many Democrats.
"Thomas was accusing the White House and many Democrats of being stuck in their ideological corners, and he wanted to broaden the debate," Sperling said.
White House officials have said they believe that Social Security legislation must pass this year if it is going to be enacted in Bush's second term, but several lawmakers said Thomas's ideas sounded like a multi-year endeavor. Thomas said he will start with the idea that the legislation can be completed in a year.
Social Security is funded by taking 12.4 percent of a worker's wage and sending that money to current beneficiaries. An additional payroll tax funds Medicare. Thomas said the payroll tax can be "a problem or a culprit in trying to create more jobs."
"There are other ways to achieve revenue increases that -- in fact, by changing the tax code -- enhance business's competitiveness, rather than retarding it," he said.
The tax is considered regressive because it is levied on the first $90,000 of income and higher earnings are untaxed, meaning that poorer people pay a higher percentage of their income to Social Security than rich people. Thomas would not say what alternative he favors, but the most obvious would be through a higher income tax.
Even some White House economists are speaking of "thinking outside the box" on Social Security financing, said a White House official, who spoke on the condition of anonymity because the president's plan has not been unveiled.
Thomas was asked several times if Bush's plan for personal accounts would be an essential part of the package. He did not directly answer, although he said the bill would have to be attractive enough so that Bush would sign it.
New Doubts On Plan For Social Security
House Republican Says Bush Plan Is Doomed, Seeks Review of System
By Mike Allen and Jonathan Weisman
Washington Post Staff Writers
Wednesday, January 19, 2005; Page A01
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) predicted yesterday that partisan warfare over Social Security will quickly render President Bush's plan "a dead horse" and called on Congress to undertake a broader review of the problems of an aging nation.
Thomas, one of Capitol Hill's most powerful figures on tax policy, is the highest-ranking House Republican official to cast doubt on the president's plan for creating individual investment accounts. He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."
"What I'm trying to get people to do is get out of the narrow moving around of the pieces inside the Social Security box," Thomas said at a forum on Bush's second term sponsored by the National Journal. "If we miss this opportunity . . . I think we will have missed an opportunity that may not present itself for another 20 years."
Bush's plan for allowing younger Americans to divert a third or more of their payroll taxes into private investment accounts to enhance their long-term benefits has drawn fire from Democrats, who say it is a risky step toward partial privatization of Social Security. Many Republicans have expressed reservations about the political wisdom of Bush's vision for restructuring the nearly 70-year-old retirement and income security program, and Thomas's comments will fuel the controversy.
The mercurial Thomas, whose chairmanship of the tax-writing committee allows him to heavily influence the fate of Bush's domestic agenda, also said he wants to consider revisions to the tax code simultaneously with debate over Bush's private-account proposal. The White House had indicated a preference to put off revisions to the tax code until next year.
"Sometimes elevating it to a larger, universal solution makes it easier because you bring more people to the table," Thomas said. "The problem with Social Security, narrowly, is that it becomes more of a partisan issue than you would like."
Perhaps most provocatively, Thomas said lawmakers should debate whether Social Security benefits should differ for men and women, because women live longer. "We never have debated gender-adjusting Social Security," he said. A House leadership official said that not even Republicans on Thomas's committee would vote for that idea. Thomas also said the system might take into account the need of blue-collar workers to retire younger than office workers.
White House spokeswoman Claire Buchan said Bush recognizes that he will have to work with Congress on any Social Security deal and understands that legislation often changes during the process. "The president values Chairman Thomas's views and looks forward to working with him and other members of Congress as we press forward on very important issues facing the American people," she said.
Bush has spoken generally about his plans for Social Security, and he is expected to expand on his concept when he delivers his State of the Union address Feb. 2. But the administration has not submitted a detailed plan for creating the new investment accounts and covering the potentially huge costs associated with the transition to the new system.
Thomas's comments, which took the White House by surprise, reflected some Republicans' view that the White House has mishandled the plan's rollout and that a fresh start is needed to allow a chance for getting Democratic support.
Speaking two days before Bush's second inauguration, Thomas said Bush's plan as it has been described "cannot, given the politics of the House and the Senate," win passage in both chambers.
"Every breath that's spent on discussing that plan is an attempt to lay a political ground war for the next election," Thomas said. "Save those breaths. Talk about what we need to do now that the president's plan is on the table so that we can address, in a legislative way, a solution on a bill the president could sign. That would be, I think, a positive gesture. And I'm looking forward to those discussions and not a continual beating of what will soon be a dead horse of their proposal."
The chairman's staff said the "dead horse" comment was a reference to Thomas's expectation that Democrats would continue to harp on what they view as politically damaging elements of the plan even if they have been modified.
Gene B. Sperling, who chaired the National Economic Council in the Clinton White House and participated in the panel with Thomas, said the chairman's comments pointed the way to a possible compromise that would include many Democrats.
"Thomas was accusing the White House and many Democrats of being stuck in their ideological corners, and he wanted to broaden the debate," Sperling said.
White House officials have said they believe that Social Security legislation must pass this year if it is going to be enacted in Bush's second term, but several lawmakers said Thomas's ideas sounded like a multi-year endeavor. Thomas said he will start with the idea that the legislation can be completed in a year.
Social Security is funded by taking 12.4 percent of a worker's wage and sending that money to current beneficiaries. An additional payroll tax funds Medicare. Thomas said the payroll tax can be "a problem or a culprit in trying to create more jobs."
"There are other ways to achieve revenue increases that -- in fact, by changing the tax code -- enhance business's competitiveness, rather than retarding it," he said.
The tax is considered regressive because it is levied on the first $90,000 of income and higher earnings are untaxed, meaning that poorer people pay a higher percentage of their income to Social Security than rich people. Thomas would not say what alternative he favors, but the most obvious would be through a higher income tax.
Even some White House economists are speaking of "thinking outside the box" on Social Security financing, said a White House official, who spoke on the condition of anonymity because the president's plan has not been unveiled.
Thomas was asked several times if Bush's plan for personal accounts would be an essential part of the package. He did not directly answer, although he said the bill would have to be attractive enough so that Bush would sign it.
Hooray for common sense. Republican or not Thomas, California, is reading the way the wind is blowing. They know if they go forward with this, they will have huge re-election problems in 2006. Reality, they will keep it on the back burner until they see an opening and pounch. Keep the heat on, e-mails to reps, sens. we have to take back out country from these people.
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