Wednesday, February 02, 2005

Bush Presses for Social Security Overhaul

WASHINGTON (AP) - President Bush challenged a hesitant Congress on Wednesday to take political risks to make Social Security "permanently sound," saying the nation's costliest social program was headed for bankruptcy unless changed. Bush's plan would cut guaranteed retirement benefits for younger Americans but would not affect checks for people now 55 and older.

Bush, in his State of the Union address, pledged to work with Congress "to find the most effective combination of reforms," although he has ruled out some remedies such as raising Social Security taxes.

Democrats said that Bush's proposal to divert Social Security revenues into private investment accounts was dangerous and that there were better ways to fix the program, the 70-year-old centerpiece of the New Deal.

A variety of solutions have been proposed over the years, such as limiting benefits for wealthy retirees, raising the retirement age, indexing benefits to prices rather than wages, discouraging early collection of Social Security benefits and changing the ways benefits are calculated, Bush said.

"All these ideas are on the table," Bush said. "I know that none of these reforms would be easy. But we have to move ahead with courage and honesty because our children's retirement security is more important than partisan politics."

Bush's speech spanned problems at home and abroad, but it was the first State of the Union address since the Sept. 11, 2001, terrorist attacks that focused most heavily on domestic issues. Despite Democrats' criticism, he offered no hint of a timetable for a troop withdrawal from Iraq.

He pledged to confront regimes that promote terror and pursue weapons of mass destruction, and singled out Syria and Iran. Returning to his inaugural address' theme of spreading democracy, Bush hailed the success of Sunday's elections in Iraq.

"And the victory of freedom in Iraq will strengthen a new ally in the war on terror, inspire democracy reformers from Damascus to Tehran, bring more hope and progress to a troubled region," he said.

Bush also promised to push forward for Mideast peace, including $350 million in aid to the Palestinians.

"The goal of two democratic states, Israel and Palestine, living side by side in peace, is within reach, and America will help them achieve that goal," the president said.

With the United States spending more than $1 billion a week in Iraq, Bush urged Congress to support his request for an additional $80 billion. "During this time of war, we must continue to support our military and give them the tools for victory," he said. While key allies like Germany and France opposed the war, Bush said his administration "will continue to build the coalitions that will defeat the dangers of our time."

Emboldened by his re-election, Bush called on lawmakers to move on several controversial fronts, including liberalizing the nation's immigration laws, imposing limits on medical malpractice lawsuits, simplifying taxes and extending the life of the tax cuts enacted during his first term.

He also urged passage of long-stalled energy legislation and promised to send Congress a budget next week that holds discretionary spending below inflation. Warning Congress that it will face painful choices, Bush said his budget would substantially reduce or eliminate more than 150 federal programs.

Bush said his wife, Laura, would lead a nationwide effort to reduce gang violence by encouraging young people to remain crime free.

Transforming Social Security is a political gamble for Bush and for Republican allies wary of taking big political risks. While Bush cannot run for another term, most GOP lawmakers face re-election next year and are nervous about tampering with a system that Americans like and see no immediate need to overhaul.

Democrats, on the other hand, face a risk of appearing as obstructionists if they simply oppose all of Bush's plan.

Under Bush's Social Security plan, workers would be allowed to divert up to two-thirds of their payroll taxes into private investment accounts, according to a Social Security expert who was briefed on the plan Wednesday. Contributions would be capped at $1,000 per year, rising each year by $100. Social Security's guaranteed benefits would be reduced to make up for money diverted to the private accounts.

Senate Minority Leader Harry Reid called Bush's plan dangerous and said there were other ways to deal with Social Security's projected financial problems. Social Security is expected to start losing money in 2018 or 2020, according to differing estimates from Social Security trustees and Congress' budget analysts, and to be unable to provide full benefits beginning in 2042 or 2052.

"It's wrong to replace the guaranteed benefit that Americans have earned with a guaranteed benefit cut of 40 percent or more," Reid said in the Democratic response to Bush's address.

House Minority Leader Nancy Pelosi, D-Calif., appearing with Reid, challenged Bush on Iraq.

"We all know that the United States cannot stay in Iraq indefinitely and continue to be viewed as an occupying force," she said. "Neither should we slip out the back door, falsely declaring victory but leaving chaos. ... We have never heard a clear plan from this administration for ending our presence in Iraq."

Bush spoke from the rostrum of the House chamber, with Vice President Dick Cheney and House Speaker Dennis Hastert seated behind him. More than two dozen guests were invited to sit in the first lady's box with Laura Bush, including relatives of fallen U.S. troops, a pilot helping tsunami victims and individuals whose presence were meant to underscore Bush's domestic agenda, such as education, Social Security medical malpractice and other areas.

The capital's political establishment, from members of Congress and the Cabinet to the diplomatic corps and Supreme Court justices, gathered for the address. Security was intense, as it was for Bush's inauguration Jan. 20. Police closed off streets surrounding the Capitol and its office buildings.

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