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Bush revives call for private Social Security accounts

Story Highlights

• Measure is not expected to gain support in Democratic-led Congress
• Bush says private accounts give workers "a better deal" for their tax money
• Congressional Democrats say budget numbers don't add up
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WASHINGTON (CNN) -- President Bush's proposed budget for 2008 repeats his call for establishing private Social Security accounts, but the issue is not likely to get far in the Democratic-led Congress.

Treasury Secretary Henry Paulson told the House Ways and Means Committee on Tuesday that the inclusion of private accounts should surprise no one, since Bush "has been very clear" about his goals.

Paulson said the administration is willing to consider any idea to keep the nearly 72-year-old system solvent.

"That's his idea, and a lot of people share that idea, and there are different views on that and on taxes," Paulson said. "But everything's on the table."

The committee's chairman, Rep. Charles Rangel, quickly dismissed the idea, calling it "pre-campaign talk" that would hinder a bipartisan budget agreement.

"I'm not even going to talk about private accounts," said Rangel, a New York Democrat. "That's something you talk about when you're fighting, not when you're trying to work out something."

The $2.9 trillion budget Bush presented to Congress on Monday envisions the accounts being set up in 2012, with workers eventually being able to invest up to $1,800 in exchange for less in guaranteed benefits. (Watch Bush argue that the U.S. can balance the budget in five years Video)

An additional $29 billion would be required to pay for the program in its first year, according to an analysis of Bush's budget by Senate Republicans.

Advocates say that letting younger workers invest a portion of their payroll taxes in exchange for a smaller guaranteed benefit would help keep the Social Security program, founded in the depths of the Great Depression, from bankrupting the government.

Bush said the accounts would not save Social Security by themselves but would give workers "a better deal" for their tax money.

Critics said the concept -- which has never been presented to Congress in detail -- would undercut Social Security, which now pays retirees out of taxes paid by today's workers.

They argue that the system's finances don't face the type of crisis that Bush portrayed in his 2005 State of the Union address, when he made the proposal the centerpiece of his annual address to Congress.

Bush made the Social Security push the focus of his domestic agenda after his re-election, but it failed to gain traction.

The public has not widely supported private accounts. In a March 2005 CNN/USA Today/Gallup poll, 53 percent opposed the idea and 33 percent supported it.

The reference to "personal accounts" -- the administration's preferred term -- appears on page 1,434 of the thick stack of budget documents the White House presented Monday, said Louisiana Rep. Jim McCrery, the ranking Republican on the Ways and Means Committee.

But he said administration officials have encouraged lawmakers to present their own ideas "and come up with bipartisan solution that we can all embrace and finally fix that problem for the American people."

White House officials have said Bush is trying to curb the growth in spending for automatic entitlements with this budget, projecting it would save about $96 billion on Medicare and Medicaid over five years.

"If we don't start dealing with them today, we'll deal with them -- it'll be in the future, and it'll be just a lot more costly all the way around," Paulson said.

The White House projects that it will be able to balance the budget in 2012 with a surplus of $61 billion, the first surplus since Bush took office in 2001.

But congressional Democrats say the numbers don't add up.

Rep. Xavier Becerra, a California Democrat, accused the administration of not being forthright about using Social Security Trust Fund money for other purposes, and said the budget fails to completely factor in the cost of the Iraq war.

"We should have truth in budgeting. And so rather than project a rosy picture of a surplus in 2012, I think the American public are ready to swallow the pill to know just how difficult things will be," Becerra told Paulson.

Paulson said the use of Social Security funds results from liabilities incurred by entitlement programs.

"So that is why the president would like us all to come together and come up with a permanent solution," Paulson said.


President Bush heads to the Oval Office Tuesday after getting off his helicopter, Marine One.

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