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GOP Governors Divided on Social Security

Times Staff Writer

In a sign of the nervousness that some in President Bush’s party feel about aspects of his second-term agenda, Republican governors arrived in the capital this weekend urging Bush to help soften the blow in their states of proposed cuts to social welfare programs.

The GOP governors were divided on how to approach Bush’s top domestic priority: diverting a portion of Social Security tax payments into privately owned retirement accounts. Some said they intended to steer clear of the issue.

The state executives, who convened for the winter meeting of the bipartisan National Governors Assn., will join their Democratic counterparts at the White House on Monday to press for changes to the Bush administration’s approach to handing out Medicaid funds. Some of the governors said they expected to be briefed on Social Security as well.

Governors in both parties are lobbying the White House and Congress to give states more power to decide which individuals qualify for Medicaid and what level of benefits they receive. The governors hope these changes might help them lighten the increasingly heavy burden on their treasuries.

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On the sidelines of meetings that began Saturday, the Republicans expressed concern that Bush’s proposed $60 billion in cuts to Medicaid over 10 years could devastate needy recipients in their states, unless the federal government loosened some of the strings attached to those dollars.

“It would have a real impact,” said Gov. Mike Huckabee (R-Ark.), vice chairman of the governors group. “It would be pretty tough on a state like Arkansas that has 717,000 people on Medicaid. That’s a huge population” in a state that, according to 2003 Census Bureau data, has 2.7 million people.

Gov. Kenny Guinn of Nevada, who heads the Republican Governors Assn., said that he had heard in recent days from advocates for seniors, people without health insurance and the disabled, and that he shared their fears about the potential effect of Bush’s proposed cuts.

Guinn and other Republican governors met Saturday morning with Health and Human Services Secretary Mike Leavitt, a former governor of Utah, who assured the group that the administration wanted to allay their worries.

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“We’re all concerned, but we’re at that point where we don’t know exactly what will take place,” said Guinn. “We’re going to get some cuts, but cuts can be more difficult if there are constraints with no flexibility.”

Gov. Linda Lingle of Hawaii, a Republican, said governors in both parties were united in their belief that “it’s not a solution to eliminate people from Medicaid coverage.”

Such concerns, coming even from Republicans who campaigned heartily last year for Bush’s reelection, are reaching the White House just as Republican members of Congress are due to return to Washington after a holiday recess during which many heard from constituents opposed to Bush’s Social Security plans and wary of steep budget cuts.

The pressures facing governors reflect the challenges that Bush is confronting as he attempts to fund the Iraq war, boost national security programs and press for new tax cuts, even while trying to keep a promise to cut the federal deficit in half by 2009.

The chairman of the national governors group, Gov. Mark R. Warner of Virginia, a Democrat, said Saturday that Bush’s agenda had backed governors of both parties into a political corner -- elevating the Social Security issue over such pressing topics as rising healthcare costs and Medicaid expenses.

“The president’s focusing on the wrong crisis,” said Warner, who has been mentioned as a potential presidential contender in 2008. “Social Security’s going to go broke in 2042, but Medicaid’s going to drive the states to bankruptcy long before that.”

“Medicaid is going to destroy the states’ health safety nets within a decade,” he said. “Medicaid is not yet in the public’s awareness, or even Capitol Hill’s awareness.”

Several Republicans agreed that their difficulties with balancing budgets and grappling with Medicaid were far more pressing than transforming Social Security, an entirely federal program. Some governors were reluctant to offer wholehearted endorsements.

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Guinn said he had a “good relationship” with AARP, the seniors group that is leading the opposition to Bush’s plan.

Nevada is a fast-growing state, largely due to an influx of retirees. Bush has said that his changes would not affect anyone born before 1950, but critics argue that the transition costs estimated at $1 trillion or more could destabilize the entire program.

“I understand why senior citizens would be upset,” said Guinn. “If you look at property taxes in Nevada, they’re going up fast, and these people are on fixed incomes. They have every right to be concerned, and [the Bush plan] has to be clearly, clearly explained to everybody.”

Huckabee credited Bush for a “gutsy” stance and showing “chutzpah” in grabbing such a controversial issue. He said he favored letting workers invest in private retirement accounts.

But pressed on whether the accounts should be funded by Social Security tax payments, as Bush wants, or by additional payments from workers’ paychecks, as some Democrats propose, Huckabee said: “I’m not persuaded to believe yet that there’s one I would absolutely oppose and one that I would absolutely support. I want to see the numbers to see how it would work out.”

Several Republican governors expressed support during interviews Saturday for Bush’s plan for private accounts, including Govs. Lingle of Hawaii, Robert A. Taft of Ohio, Haley Barbour of Mississippi, Tim Pawlenty of Minnesota and Jim Douglas of Vermont, all of whom said the idea was popular with young people in their states.

Barbour, though, rejected one idea that Bush had expressed a willingness to consider: raising the cap that prohibits charging Social Security payroll taxes on wages above $90,000.

“We don’t need to raise taxes, and that’s a tax increase by any name,” Barbour said.

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Two Republicans, Douglas and Pawlenty, said Saturday that they continued to disagree with the administration’s opposition to legalizing the practice of reimporting pharmaceuticals from Canada as a way to help seniors save money. Douglas’ administration has sued the Food and Drug Administration over the issue.

“Vermonters are independent by nature,” said Douglas, whose double-digit election margin in his state contrasted sharply with Bush’s double-digit loss there last year. “They know that I agree with the president on some things, and that I’m not afraid to let him know when I disagree with him.”


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