Progress is slow on Social Security

Sen. Charles Grassley says a bill on restructuring the benefits is 'not very close.'

Author: Jane Norman

Published: May 26, 2005

The drive to restructure Social Security appeared to have hit a wall in the Senate on Wednesday, as Finance Committee Chairman Charles Grassley said that he has been unable to make much headway in crafting a Republican-only bill.

The Iowa Republican held his final hearing on an overhaul of the retirement program but said afterward that he is "not very close, I'm sorry to say" to writing a bill. "We have not made a lot of progress in the three meetings we've had with our members," he said.

Grassley said he still wants his committee to complete work this summer.

He said that "the most obvious thing" about the hearing was a continued stalemate along partisan lines, although both sides acknowledge deep problems in Social Security.

"On the Democratic side of the aisle, it doesn't matter what you put up, what you talk about, there's no plan on the other side, and there's constant criticism of it," Grassley said.

Senators returned to Social Security after a fight on filibusters was resolved by a compromise developed by a coalition of 14 senators from both parties. Some had raised hopes that the spirit of harmony could spread to other thorny issues like Social Security.

But familiar divisions on Social Security instead re-emerged. Sen. Max Baucus, the top Democrat on the committee, said if there is to be any hope of a bill this year, "then the president needs to leave his effort to privatize Social Security behind."

Bush has proposed that younger workers be allowed to set up voluntary personal accounts using part of their Social Security payroll taxes, saying workers deserve a chance to control their own assets. Democrats have resisted the idea, saying it would cost too much and ultimately lead to the death of the program.

Baucus also extracted agreement from three of the five witnesses at the hearing, including the head of the Congressional Budget Office, that personal accounts for Social Security would darken the program's financial outlook. The other two witnesses declined to state opinions.

The Social Security trustees project that without any action from Congress, benefit cuts will be necessary by 2041.

"It makes it far worse," said Stanford Ross, a former commissioner of Social Security under President Carter and former trustee of the trust fund under President Clinton and the first President Bush.

Ross urged that senators adopt a bipartisan plan and said that "the rancor in the present discussion of Social Security is unprecedented."

He said there has been broad support for Social Security throughout its 70 years from both parties and the Bush administration "is the first administration that has suggested that the concepts underlying the system are inherently flawed."

Grassley has said that he will include personal accounts in his version of the bill the committee will consider, and acknowledged in a conference call with Iowa reporters that "my sense of the public mood is that personal accounts have not caught on very much." But he said that he believes Americans do think that action needs to be taken on Social Security.

The option of raising the retirement age also came up at the hearing, advocated by Eugene Steuerle, a senior fellow at the Urban Institute. He said older Americans seem to be reporting improved health.

Asked about an increase in the retirement age, Grassley said that "it's got to be part of the package," perhaps by requiring more Americans to wait until age 67 to retire with full benefits.