Bush Says Retirement Plan Would Make FDR Proud

President Bush traveled to one of the country’s poorest regions Tuesday to assure Americans that the Social Security restructuring plan he had in mind would improve on the system’s 70-year-old promise to provide a safety net for those in need.

Yet in appearing before relatively well-paid workers at a Nissan plant in Canton, Bush was addressing a middle-class constituency whose Social Security benefits could be squeezed by his plan.

Bush told about 2,200 day-shift workers at the sprawling auto plant that he wanted Congress to craft a restructuring plan that would ensure that future retirees received large enough benefits to keep them above the poverty line.

“The current system today, by the way, doesn’t say that.... I think Franklin Roosevelt would be proud to make sure of this: If you work your entire life and pay into Social Security, you should not retire into poverty,” Bush said.

Bush’s trip to Mississippi, the 26th state he has visited since launching his second-term Social Security campaign, came as Congress began weighing options for addressing the system’s long-term funding shortfall.

Bush wants Congress to allow workers born in 1950 or later to divert part of their payroll taxes into individual investment accounts containing mutual funds. At retirement, they would convert the accounts into annuities that would pay them fixed incomes. In return, they would accept cuts in traditional Social Security benefits.

Bush’s personal account plan would do little to close Social Security’s funding gap, estimated at $4 trillion over 75 years. To address this problem, Bush last week endorsed the idea of maintaining currently promised benefits for low-wage workers but reducing payouts to future middle-income and higher-paid retirees. His proposal would also guarantee that all retirees received enough benefits to keep them above the federal poverty line for the elderly, now about $9,000.

Polls show many Americans are skeptical about Bush’s individual account plan and his proposed benefit curtailments. Congressional Democrats are united in opposition, and many Republicans are expressing doubt about his approach.

Bush said that under his plan, an average-paid worker earning about $35,000 a year in today’s dollars could accumulate a retirement nest egg of $250,000 by setting up the kind of personal account he has proposed. He did not mention that the retirement benefits the account would generate would be at least partly offset by reductions in traditional Social Security payments.

Bush’s proposal received a hearty endorsement from Coley Bailey, a 32-year-old cotton farmer from Coffeeville, Miss., who said he and his wife had opened Roth individual retirement accounts to supplement Social Security benefits that they were unsure they would ever receive. He said he liked being able to manage his own account and watch the balance grow.

“See, he’s used to investing,” Bush said. “We got a whole group of youngsters coming up in America today ... who understand what it means to watch your own assets grow and to make investment decisions. In other words, there’s a cultural change in America. Congress is lagging behind the cultural change.”

Bush was joined at the event by Mississippi Republican officials including Gov. Haley Barbour and Sens. Trent Lott and Thad Cochran. One official not in attendance was Democratic U.S. Rep. Bennie G. Thompson, whose district includes the Nissan plant. Thompson’s press secretary, Lanier Avant, said Thompson was invited but had prior commitments.

Thompson, like most Democrats in Congress, has said he is opposed to Bush’s plan.

Asked after Bush’s event about the president’s call to curtail benefits for future middle-income and higher-paid retirees, Lott said: “I’m not overjoyed about that, because I think it does begin to move it more toward a welfare system, as opposed to its original intention. But I don’t think we should be wed to romantic ideas if they don’t get the job done.”

Lott said he thought Congress would approve a restructuring plan, but that he didn’t know whether it would be this year.

“The Finance Committee is a bunch of nervous nellies,” Lott said, referring to the panel that has the job of writing the Senate’s version of a restructuring plan. “The Democrats are still dug in in a partisan way.... The Republicans, we’ve got a few people who are nervous or don’t agree on how to do it. But we’ll get there.”

Queried by a reporter, Cochran, Mississippi’s other senator, stopped short of endorsing Bush’s proposal for altering the way initial benefits are set for future retirees. “We will work together on the details,” he said.

On Capitol Hill, Democrats continued to criticize Bush’s proposal. House Minority Leader Nancy Pelosi (D-San Francisco) said at a news conference that Bush’s plan would “sock it” to the middle class.

Senate Minority Leader Harry Reid (D-Nev.) called Bush’s proposal “worse than the problem,” saying in a statement that many middle-class seniors would do “worse than if Congress did absolutely nothing.”

Nissan’s Canton plant, which opened in 2003, is one of the state’s largest employers. Its 4,100 regular employees and 1,700 contract workers make minivans, SUVs, pickups and sedans at wages that start about $12.50 an hour and can reach $20 an hour for experienced technicians, according to company officials.

That puts the plant’s workers within the wage range that would be subject to reductions in benefit payouts under the formula that Bush has cited.

That formula would trim traditional benefits for future retirees earning more than about $20,000 a year in today’s dollars. Bush has embraced that formula in principle but has said he plans to negotiate with Congress over the details.

Americans United to Protect Social Security, an umbrella group representing organizations opposed to Bush’s plan, released an analysis suggesting future Mississippi retirees would receive a $236 average monthly benefit cut under the formula cited by Bush.

Earlier Tuesday, White House spokesman Trent Duffy said Bush was open to alternative proposals from members of Congress.

“He has put out his proposal on a way to protect the lowest-income workers, but in the context of the legislative process, he’ll welcome other ideas for solutions,” Duffy said.

Times staff writer Richard Simon in Washington contributed to this report.