State of the Union: Social Security plan to remain vague

WASHINGTON (AP) – President Bush will outline ideas about strengthening Social Security but will not spell out all the details of a plan to fix the system’s financial problems when he delivers his State of the Union address Wednesday night.

Bush’s strategy to offer a partial outline rather than detailed remedy reflects a split between the two houses of Congress about the president’s role in the politically sensitive debate.

In the House, where every seat is up for election every two years, Republican leaders want the president to present a specific plan and work to sell it to the country before pressing Congress to vote. But key Senate leaders prefer that Bush work behind the scenes with Congress to develop a bipartisan consensus.

"It’s time to shine a very clear light on the problems facing Social Security and then to talk about ways we can work together to strengthen it," White House press secretary Scott McClellan said Tuesday.

Social Security will be Bush’s top domestic priority when he goes before Congress and a nationally televised audience at 9 p.m. EST Wednesday. He will devote the first half of his 40-minute speech to domestic matters and the second half to international issues.

On the international front, he will urge North Korea to return to six-nation talks about dismantling its suspected nuclear weapons program, the White House said. He will express support for European efforts to persuade Iran to abandon its nuclear program. Bush also will point to elections in Iraq and the Palestinian territories as hopeful signs for the spread of democracy around the world.

Social Security restructuring has been on Bush’s agenda since before he entered the White House. In 2000 he campaigned on the idea of letting younger workers divert some of their Social Security payroll taxes into private investment accounts, a move that might offer higher returns but also would deplete money for guaranteed benefits in the future.

The administration said Bush’s speech would leave key elements to be worked out with Congress and that Bush was willing to come out and make another speech sometime in the future to articulate more details of a solution.

Without any changes, Social Security will start paying out more in benefits than it collects in payroll taxes in the year 2018, according to the Social Security trustees’ latest estimate. In 2042, it will be able to cover only about 73 percent of benefits owed, the trustees indicated.

"In the State of the Union you’re going to hear him talk in greater detail about ideas for strengthening and saving Social Security, in greater detail than he has previously," McClellan said.

One thing Bush is expected to discuss is how the private investment accounts would operate. The accounts would be investments in stocks or bonds and would be structured like many company-sponsored retirement plans, with only a handful of investment options, Bush’s advisers have recommended.

Bush is nowhere near ready to propose actual legislation, and a senior administration official cast some doubt on whether the administration would even be ready to spell out details in late February or early March, as had earlier been suggested.

Many Republicans fear that Bush’s Social Security plan could cause a backlash, as did the Clinton heath-care proposal in 1994. The unpopularity of that plan contributed to heavy losses for Clinton’s Democratic party in both the House and the Senate.

"There are a lot of details that will have to be worked out by Congress," the official said at a pre-speech briefing, insisting on anonymity so as not to steal Bush’s thunder.

"And the whole key is what will help and what will hurt, what will be inviting to both parties, what won’t.

"We’re not in a position where we want to be ruling things in or out," the official said.

Bush’s proposal to rewrite the income-tax code, meanwhile, is clearly an initiative on the back burner. The senior official didn’t even mention it when he first ran down the priorities that Bush would emphasize, although when pressed, said it remains a key Bush second-term item. The official said that making first term Bush tax cuts permanent remained a priority.