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Social Security at top of agenda



Published: Thu, February 3, 2005 @ 12:00 a.m.



Social Securityat top of agenda

Democrat Nancy Pelosi challenged the president on Iraq.

WASHINGTON (AP) -- President Bush challenged a hesitant Congress on Wednesday to "strengthen and save" Social Security, saying the nation's costliest social program was headed for bankruptcy unless changed. Bush's plan would cut guaranteed retirement benefits for younger Americans but would not affect checks for people now 55 and older.

Bush, in his State of the Union address, pledged to work with Congress "to find the most effective combination of reforms," although he has ruled out some remedies such as raising Social Security taxes.

Democrats said that Bush's proposal to divert Social Security revenues into private investment accounts was dangerous and that there were better ways to fix the program, the 70-year-old centerpiece of the New Deal.

Republicans stood and cheered when Bush urged lawmakers to approve "voluntary personal retirement accounts." Democrats sat in stony silence, underscoring the partisan divide on an issue likely to dominate the year in Congress. Democrats also groaned and grumbled when Bush said Social Security would require drastically higher taxes, massive new borrowing or severe benefit cuts unless the system is changed.

Bush's 53-minute speech spanned problems at home and abroad, but it was the first State of the Union address since the Sept. 11, 2001, terrorist attacks that focused most heavily on domestic issues. Despite Democrats' criticism, he offered no hint of a timetable for a troop withdrawal from Iraq.

Applause, emotion

The longest applause was when Bush recognized Janet and Bill Norwood, the parents Marine Sgt. Byron Norwood of Pflugerville, Texas, who was killed in the assault of Fallujah. In an emotional gesture, Mrs. Norwood hugged Safia Taleb al-Suhail, leader of the Iraqi Women's Political Council.

Bush pledged to confront regimes that promote terror and pursue weapons of mass destruction, and singled out Syria and Iran. Returning to his inaugural address' theme of spreading democracy, Bush hailed the success of Sunday's elections in Iraq.

"And the victory of freedom in Iraq will strengthen a new ally in the war on terror, inspire democracy reformers from Damascus to Tehran, bring more hope and progress to a troubled region," he said. In a challenge to Iran's government, he told the country's citizens: "As you stand for your own liberty, America stands with you."

Bush also promised to push forward for Mideast peace, including $350 million in aid to the Palestinians.

"The goal of two democratic states, Israel and Palestine, living side by side in peace, is within reach, and America will help them achieve that goal," the president said.

With more than 1,400 Americans killed in Iraq and the United States spending more than $1 billion a week on the war, Bush urged Congress to support his request for an additional $80 billion. "During this time of war, we must continue to support our military and give them the tools for victory," he said.

While key allies like Germany and France opposed the war, Bush said his administration "will continue to build the coalitions that will defeat the dangers of our time."

From Pelosi

House Minority Leader Nancy Pelosi, delivering the Democratic response, challenged Bush on Iraq.

"We all know that the United States cannot stay in Iraq indefinitely and continue to be viewed as an occupying force," she said. "Neither should we slip out the back door, falsely declaring victory but leaving chaos. ... We have never heard a clear plan from this administration for ending our presence in Iraq."

Emboldened by his re-election, Bush called on lawmakers to move on several controversial fronts, including liberalizing the nation's immigration laws, imposing limits on medical malpractice lawsuits, simplifying taxes and extending the life of the tax cuts enacted during his first term.

He also urged passage of long-stalled energy legislation and promised to send Congress a budget next week that holds discretionary spending below inflation. Warning Congress that it will face painful choices, Bush said his budget would substantially reduce or eliminate more than 150 federal programs.

Bush said his wife would lead a nationwide effort to reduce gang violence by encouraging young people to remain crime free. In a nod to conservatives, he renewed support for a constitutional amendment to ban gay marriage.

Political gamble

Transforming Social Security is a political gamble for Bush and for Republican allies wary of taking big political risks. While Bush cannot run for another term, most GOP lawmakers face re-election next year and are nervous about tampering with a system that Americans like and see no immediate need to overhaul.

Democrats, on the other hand, face a risk of appearing as obstructionists if they simply oppose all of Bush's plan.

Under Bush's Social Security plan, workers would be allowed to divert up to two-thirds of their payroll taxes into private investment accounts, according to a Social Security expert who was briefed on the plan Wednesday. Contributions would be capped at $1,000 per year, rising each year by $100. Social Security's guaranteed benefits would be reduced to make up for money diverted to the private accounts.

A variety of solutions have been proposed over the years, such as limiting benefits for wealthy retirees, raising the retirement age, indexing benefits to prices rather than wages, discouraging early collection of Social Security benefits and changing the ways benefits are calculated, Bush said.

"All these ideas are on the table," Bush said. "I know that none of these reforms would be easy. But we have to move ahead with courage and honesty because our children's retirement security is more important than partisan politics."




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