Action on Social Security Debated
Bush Advisers Discussing Swift Legislation Versus More 'National Conversation'

By Amy Goldstein
Washington Post Staff Writer
Friday, November 15, 2002; Page A16

The White House is interpreting Republican victories in last week's congressional elections as a mandate for changes to Social Security that President Bush has long sought. But the administration may be unwilling to devote his political capital to such touchy legislation in the coming year.

According to sources in the administration, Congress and conservative interest groups, White House officials have concluded from voters' choices that the changes -- which would for the first time tie a portion of the nation's retirement system to stock market investments -- can be a winning issue. Bush aides have compiled a PowerPoint presentation for advocates and lawmakers showing that several GOP candidates who emphasized Social Security in their campaigns did "best of all," as an administration official put it.

However, the president's advisers are still discussing whether he should prod lawmakers for a bill quickly or spend the next year leading a "national conversation" to try to engender support.

The changes center on the creation of individual retirement accounts in which most workers could divert some of their Social Security taxes into stocks and bonds.

Several prominent outside advocates of such accounts -- who have been in contact with the White House in recent days -- said they believe that Bush's economic and political advisers, including senior adviser Karl Rove, favored swift legislation. On the other hand, the sources said, White House lobbyists are more hesitant to ask for legislation right away. That's because some senior Republicans believe the timing is poor, most Democrats are resistant, and the administration's ideological allies have not made clear how high Social Security ranks among their goals now that the GOP is taking control of both chambers of Congress.

Bush has not tipped his hand. During a news conference last week, he called the future of Social Security "an incredibly important debate." But he added, "Listen, there are a lot of important issues." He did not say how soon he would ask Congress to act.

White House Chief of Staff Andrew H. Card Jr. inadvertently provoked a furor last weekend when asked about Social Security changes on NBC's "Meet the Press." "I'm not sure that it can happen next year," he said. Afterward, White House aides called their sympathizers in advocacy groups and on Capitol Hill, saying that Card was not implying that Bush had made a decision.

The question of when and how the White House should prod Congress is the most recent step in a long political dance over how to stabilize the retirement system, which pays benefits to about 40 million retirees. The system, which has been funded by payroll taxes invested in Treasury securities, is expected to face enormous strains starting in next decade as Americans live longer and the large baby boom generation retires.

Bush made Social Security a central issue of his presidential campaign. Last year, he set forth some principles for redesigning the program, including the retirement accounts and a promise not to reduce benefits for people who are retired or who will be soon. Then he created a commission that proposed three alternatives late last year, each containing a version of private accounts.

At the time, the White House said it wanted to use this year for a national dialogue about the issue, deferring legislation until after last week's elections. And some GOP leaders, notably Rep. Thomas M. Davis III (R-Va.), chairman of the Republican National Campaign Committee, cautioned party candidates against playing up the issue.

This week, Davis still sounded cautious. "You have to have a discussion before you can get a bill passed," he said in an interview.

Members who have long tried to change the program sound uncertain how soon they can succeed. Sen. Judd Gregg (R-N.H.), a longtime leader on the issue, said change will prove more difficult now than it was in the late 1990s, after President Bill Clinton designated 1998 as another year of national dialogue on the future of Social Security. Gregg said that budget surpluses, once envisioned as a way to pay for the transition to a new system, no longer are available, and that fewer Democrats are willing to engage in a constructive discussion. "I intend to try, but I may be a voice of one," Gregg said. He added that the longer Congress waits, the more difficult it will be to bring the program into fiscal balance without cutting benefits.

In the House, Reps. Jim Kolbe (R-Ariz.) and Charles W. Stenholm (D-Tex.) said they plan to introduce a new version of Social Security legislation, calling for private accounts, that they have sponsored for the past six years. Stenholm said he would search for support within his party, starting with fellow conservative Democrats.

Kolbe said: "To be very realistic and very honest, it's going to be an uphill fight."

Rep. E. Clay Shaw Jr. (R-Fla.), chairman of the Ways and Means' Social Security subcommittee, said he would reintroduce a plan he has promoted. But Shaw said, "In order to solve this thing . . . I have to get bipartisan support."

At least a few Republicans who won elections last week said they are prepared to push the issue. "Empirically, it appears to have worked for everyone who was willing to take on this issue head-on," said Rep. John E. Sununu (R-N.H.), who won a difficult Senate race. "Voters recognize this is a priority."

But there are opposite examples, too. Gov. William J. Janklow (R-S.D.) won a close House race after signing a pledge circulated by a liberal advocacy group, the Campaign for America's Future, to oppose any plan for private retirement accounts.

Given the mixed election results and the difficult environment in Congress, the White House's timing will prove pivotal, lawmakers and advocates predict. "They've got the biggest pulpit I know," Shaw said.