House Panel Chief Rebuffs Clinton Social Security Plan

The chairman of the House Ways and Means Committee on Thursday denounced President Clinton’s Social Security proposal as “budgetary manipulation” and said his committee is still waiting for the White House to offer a plan “that can be understood by the American people.”

Republicans agree with the president that 62% of the budget surplus should be reserved until Social Security’s long-range solvency is assured, but they want to see a detailed proposal, said Rep. Bill Archer (R-Texas).

“We are very patient people,” he said.

The Republicans do not intend to offer their own Social Security proposal, and the committee won’t draft legislation until the White House sends Congress a plan that can be certified by actuaries to keep Social Security sound for 75 years, Archer said in an interview.

Archer’s Skepticism Signals Rough Ride

The strong skepticism expressed by Archer, whose committee handles all Social Security legislation, suggests it will be hard to bridge the gulf between the Democratic president and the Republican Congress to reach an agreement on Social Security.

The administration is eager for an agreement. “It’s the president who put out a specific framework Tuesday that has significantly moved the ball forward on Social Security reform,” Gene Sperling, head of the National Economic Council, said in response to Archer’s comments. “Rather than any of us playing the ‘who goes first’ game, why don’t we all just agree we will work together in a constructive way to reach consensus for the American people?”

The White House has said it will help save Social Security by transferring 62% of the value of projected budget surpluses--more than $2.7 trillion over 15 years--to the Social Security system.

This would be done indirectly, by using the surplus money amassed by the government over the next 15 years to pay down the national debt. The savings in interest from having a lower debt means more money would be available later to pay for Social Security. The date at which Social Security cannot pay full benefits would be delayed from 2032 until 2055 under the Clinton plan, officials estimate.

But Archer said he considers this a “highly confusing” use of budgetary numbers and uncertain forecasts, a bit of accounting razzle-dazzle that doesn’t solve any of Social Security’s long-range financial problems.

Meanwhile, his committee’s first full-scale hearing on Social Security in this session of Congress became a lively debate Thursday as two eloquent witnesses, the Rev. Jesse Jackson and former Housing Secretary Jack Kemp, argued about the role that government should play.

Sitting side by side, Jackson and Kemp bantered with each other as committee members interjected comments and questions. The conversation revealed the different philosophical lenses through which Democrats and Republicans view the debate.

Kemp and many Republicans want to give workers some of their Social Security payroll taxes back to invest in the stock market. “I have to give you a vision of how much better we could do,” said Kemp, a former congressman and Republican vice presidential candidate.

“We need to personalize Social Security . . . to empower working men and women,” said Kemp, co-director of Empower America, a conservative public policy research organization.

Jackson and Democrats say the current system is a vital safety net for the elderly and disabled, and fear that market investments are too chancy for the average person to risk retirement security.

“I am more conservative than Kemp,” said Jackson, a civil rights activist and president of the Rainbow/PUSH Coalition. “He wants risk for people at risk. I want security for people at risk.”

“I am amazed that . . . Kemp is obsessed with fixing what is working,” said Jackson.

Parties Disagree on Stock Market Option

Democrats and Republicans also disagree profoundly on the desirability of having the government invest some of Social Security’s surpluses in the stock market. Clinton wants to put $700 billion at work this way to get higher returns for Social Security than the system earns from its current investment in Treasury securities.

“The president and Jesse Jackson and others want to do it . . . while almost all Republicans think it is dangerous,” said Archer.

Both parties are in the early stages of maneuvering for political advantage on Social Security, trying to win public support before getting down to serious negotiations. Republicans and Democrats alike proclaim their fealty to the idea of walling off the surplus until Social Security is made secure.

After that task is accomplished, Republicans say, Americans deserve a significant tax cut.