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President Hit With Party Flak on His Social Security Tour

Times Staff Writers

President Bush on Friday campaigned for a second consecutive day for his plan to restructure Social Security, even as he faced resistance to his proposal from some members of his own party.

In a wide-ranging discussion about the long-term problems that the 70-year-old program faces, Bush promoted his proposal to allow workers under age 55 to divert a portion of their Social Security payroll taxes into private accounts.

He explicitly acknowledged for the first time that the accounts were not a cure-all for the long-term financial problems facing Social Security.

“I fully recognize a personal retirement account is not the only thing needed ... to solve Social Security permanently,” Bush said. “But it’s a part of a solution.”

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The president reiterated that “everything is on the table” to solve the program’s financing problem -- except raising payroll taxes. He also warned that Social Security would go “flat bust” in 2042, an assertion critics have challenged.

He told retirees and people near retirement that “Social Security is in good shape and will meet its promises” to them. But, Bush added, “The status quo is unacceptable to young workers.”

Bush visited Arkansas and Florida as well as Nebraska -- all states he carried in last fall’s election -- in an effort to rally the public and apply pressure to the states’ Democrats in the Senate to back his Social Security restructuring.

But Bush is facing resistance not only from Democrats, but also from members of his own party, as evidenced Friday on a number of fronts.

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A group planning a $10-million campaign to win congressional backing for the investment accounts announced that its first round of television ads would target three undecided Republicans.

While Bush was in Nebraska lobbying for his overhaul plan, both of the state’s senators -- Republican Chuck Hagel and Democrat Ben Nelson -- expressed concerns about it before meeting with the president.

Hagel called for Congress to take a slow approach. “We’ve got time here to explore a wide range of options,” he said, adding that it was more important to get the job done right. “Technically, we’re not in a crisis -- but we will be,” Hagel said.

Later, at an appearance in Tampa, Fla., Bush seemed undaunted by doubts expressed by lawmakers that he may be moving too fast on the issue.

Now, the president insisted, must be “a moment where people of both parties come together.” He urged all who disagreed with his proposals to offer their own ideas. “I promise you there won’t be political retribution for doing so,” Bush said.

Hagel expressed doubt that Congress would enact any changes this year. “I don’t know if we can pass a bill this year.... If we wait until next year to get it done, that’s OK too,” he said.

Nelson, who has backed the concept of investment accounts but only as an addition to Social Security, said Bush’s approach on the accounts was “not an answer to the solvency program.”

Nelson called on Bush to not only offer additional details of his proposal, but also to produce an “entire plan” to deal with the structural problems Social Security faced. Until then, he said, “you’ve got a lot of people debating empty boxes.

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“I don’t think I can support anything in the abstract,” Nelson said.

In Washington, Rep. E. Clay Shaw Jr. (R-Fla.), a senior member of the House Ways and Means Committee, which will write Social Security legislation, said Bush’s proposal to divert a portion of Social Security taxes into individual investment accounts faced a “tough political sell” on Capitol Hill.

In the Republican-controlled Senate, where the minority Democrats can block legislation through a filibuster, no Democrat has come out in support of using Social Security taxes to fund private investment accounts.

Shaw called for establishing the accounts, but with general fund money, not by diverting payroll taxes. He said that such a plan was “the most likely to pass and most likely to draw bipartisan support.”

At the same time, a group of conservative Republicans signaled that it wanted to go further than Bush had proposed: allowing younger workers to quickly set aside as much as 6 percentage points of the 12.4% Social Security tax in the private accounts. Bush has proposed a diversion of 4 percentage points, up to a cap of $1,000, a ceiling that would rise by at least $100 annually.

“Do large accounts and have them vest with the people as quickly as possible,” Rep. John B. Shadegg (R-Ariz.) said at a meeting of more than 50 conservative House Republicans in Baltimore. “Our belief is we should be bold and we should go far, and we believe it will help every American.”

The Club for Growth, a Washington tax-cut advocacy group that supports personal investment accounts, announced plans to target three undecided Republicans in TV ads that would begin next week: Reps. Joe Schwarz of Michigan and Sherwood Boehlert of New York and Sen. Lincoln Chafee of Rhode Island.

In the ad, a narrator says: “Younger workers will pay hundreds of thousands into Social Security. Without reform, they’ll get just a fraction back when they retire. Personal savings accounts will give their generation the opportunity to save for a secure retirement -- something to own and give to their children.” The ad asks viewers to call their congressmen.

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Schwarz, a 67-year-old freshman, said it was “premature to jump on board” to support any plan without knowing more. “I don’t believe anybody should leap before they look,” he said in an interview.

Schwarz said he didn’t see it as a sign of disloyalty to the president to seek more details. “The president is aware ... that there are a lot of thinking people in Congress who want to do the right thing. We just want to make certain that when we do something -- especially with Social Security -- that we are doing the right thing.”

In Omaha, Bush conceded that it was “going to take a while” for the public to fully appreciate the long-term structural problems facing Social Security, and he vowed to continue to take his case to the country. Bush is to speak about the issue Tuesday at the Detroit Economics Club, and again on Thursday and Friday.

Times staff writer Mary Curtius in Baltimore contributed to this report.


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