Democrat Readies Plan on Social Security

In new political maneuvering over Social Security, a Democratic lawmaker says he will introduce a plan Monday for shoring up the finances of the retirement system, putting him at odds with leaders of his party.

Rep. Robert Wexler (D-Fla.) says that by imposing a 6% tax on wages above $90,000, to be paid half by workers and half by employers, the government could raise enough money to solve Social Security’s financial problems for 75 years.

Workers and employers pay a combined 12.4% Social Security tax on wages up to $90,000 a year, but none on amounts above that.

In proposing the idea, Wexler has drawn praise from the White House but criticism from some in his party.

President Bush has made restructuring Social Security the top domestic priority of his second term, and he has urged lawmakers to engage in the debate.

But Democratic leaders have said they do not want to lay ideas on the table until Bush abandons the centerpiece of his own plan -- allowing younger workers to divert some Social Security taxes into individually controlled stock and bond accounts. Democrats say the accounts would drain money from the system, causing it further harm.

In an interview, Wexler said he was acting out of duty to his Florida district, which he said included the second-highest number of seniors of any House district. It includes parts of Palm Beach and Broward counties.

“My allegiance to seniors is greater than my allegiance to the Democratic leadership,” Wexler said. “The president has challenged Democrats to come up with plans of their own for dealing with Social Security’s solvency. I think it’s time we met that challenge without cutting benefits or raising the retirement age.”

Aides to the top House Democrat and the Senate Democratic leader predicted that Wexler would not draw much support from others in the party.

“He’s a party of one on this,” said Jim Manley, spokesman for Senate Minority Leader Harry Reid (D-Nev.).

Jennifer Crider, press secretary to House Minority Leader Nancy Pelosi (D-San Francisco), said, “This is not the Democratic plan.”

Bush’s plans for Social Security have fared poorly in public opinion polls, and many Democrats have urged party members to avoid taking any steps that would distract voters from the principal Democratic contention: that the president is aiming to “privatize” the retirement program.

In particular, Democrats have been wary of endorsing a tax increase, as Wexler’s plan does, saying that such pain-inducing proposals should come from Bush and the Republicans.

At the same time, a small number of Democrats have cautioned that the party will be punished if it presents no Social Security plan.

Wexler noted that his bill would not raise the retirement age or cut benefits. “The Democrats have maintained a united front,” he said. “I continue to be part of that as far as opposing private accounts and cutting benefits.”

The Republican National Committee sought to play up tensions Wexler had set off in the Democratic Party, issuing an e-mail news release Friday that showed two donkeys wearing boxing gloves under the headline: “Dems vs. Dems.”

In an interview Saturday, Trent Duffy, a White House spokesman, praised Wexler for introducing his bill, though he declined to endorse its contents. “This is the kind of leadership the president wanted to encourage,” Duffy said.

Bush talked about Social Security on Saturday in his weekly radio address. The administration projects that the retirement program will run short of the money needed to pay all of its benefits by 2041 as it handles the coming wave of baby boom retirements. “The Social Security safety net has a hole in it for younger workers,” said Bush, who is scheduled to travel to Milwaukee on Thursday to promote his plan. “For the sake of our children and grandchildren, we need to make Social Security permanently solvent.”

In the radio address, Bush called again for worker-owned retirement accounts funded with a portion of the Social Security tax. Under his proposal, workers who opened such accounts would have to give up a portion of their traditional Social Security benefits. But, Bush has said, the accounts would allow workers to own their retirement savings and, for some, to pass a portion to their heirs.

“Because this money will be saved and invested,” he said Saturday, “workers will have the opportunity to earn a higher rate of return on their money than anything the current Social Security system can now give them.”

Bush asked the Senate on Saturday to pass an energy bill that had been approved by the House, and he called on Congress to pass the Central American Free Trade Agreement.

CAFTA, as the pact is known, would end most tariffs and import restrictions on trade among the United States and five Central American nations, plus the Dominican Republic. The agreement faces an uphill fight in the Senate, and is considered 30 or more votes short of passage in the House.