White House: Borrowing to revamp Social Security likely
From Dana Bash
CNN Washington Bureau
WASHINGTON (CNN) -- The White House conceded Monday it will likely have to borrow money to pay for the president's proposal to create private accounts for younger workers to revamp Social Security.
"There will be some upfront transition financing that will be needed to move toward a better system that will allow younger workers to invest a small portion of their own money into personal savings accounts," said White House press secretary Scott McClellan.
The president invited congressional leaders to the White House Monday to discuss Social Security reform, which tops his second term domestic agenda.
Bush has not yet endorsed a specific proposal, only principles, so it is unclear how much his idea would cost.
Some estimates say diverting Social Security money for private accounts could cost between $1 trillion and $2 trillion over 10 years.
The White House has ruled out paying for it with tax increases, and says that borrowing now is more economically responsible than not addressing problems in the program that could make it insolvent.
"The cost is $10 trillion if we do nothing. So, what you're talking about would be a significant savings over those costs. The Social Security system is unsustainable. It needs to be fixed," McClellan said.
Although Democratic congressional sources say the president told leaders he wanted to revamp Social Security next year, and on a bipartisan basis, many Democrats oppose the idea of private accounts. They say it puts the guaranteed benefit for all older Americans at risk.
The White House insists that benefits for those already receiving Social Security will not change, and that private accounts would be voluntary for those still paying into the program.