Editorial: Bush needs to listen

Friday, Dec. 17, 2004 | 4:34 a.m.

WEEKEND EDITION

December 18 - 19, 2004

Prior to President Bush's two-day economic conference last week, White House spokeswoman Claire Buchan told the Washington Post that participants would represent a diversity of views on the issues that would be discussed. But not a contrary word was heard at the conference about one of the president's most controversial plans, partially privatizing Social Security.

Throughout Bush's first term, and particularly on the campaign trail, his advisers have made sure that presidential town hall meetings and other forums have been carefully screened and choreographed so he wouldn't be asked tough, probing questions. But now that he has just won re-election, it doesn't make sense to relentlessly continue this strategy, especially regarding plans to overhaul Social Security. It's essential to explore all options and get input from experts and others who have differing views. It's not as if this is going to be a slam dunk for the president. A Wall Street Journal/NBC News poll last week found that the public, by 50 percent to 38 percent, believes it's "a bad idea" to allow workers to invest their Social Security taxes in the stock market.

The nation's demographics are changing, with the nation's "baby boom" generation getting ever closer to retirement age, a situation that will create a cash-flow problem for Social Security. That's because with each passing year, there are more retirees and fewer workers to pay taxes to provide retirement benefits. And while the president says there is a crisis now, there's no such consensus among experts that one exists. Although the Social Security's Board of Trustees estimates the fund will become insolvent in 2042, the Congressional Budget Office predicts this won't happen until 2052. Even then, the CBO notes, payroll taxes will still cover 80 percent of the benefits being paid out. A sizable number of Democrats, and some Republicans too, believe that tweaking the system can ensure solvency. The president has said he is against raising payroll taxes on wealthy Americans, one option that critics of Bush's plan have put forward to deal with the cash-flow problem. Currently, A! mericans stop paying payroll taxes once their income reaches $87,900. Removing this ceiling, some experts believe, could go a long way in eliminating much of the estimated shortfall in coming decades. It's a serious mistake for the president to not even entertain this option.

It's also important to consider that the CBO estimates that diverting payroll taxes to create private investment accounts -- along the lines of some of the plans the administration is considering -- could cost between $1 trillion to $2 trillion over 10 years. Our budget deficits have worsened in the past four years, and the last thing we need is to aggravate them even more. What is clear is that there isn't any neat, simple fix to reforming Social Security, one of the most important and cherished government programs created in this nation. That is why it is essential that the president start a genuine dialogue with all Americans, including Democrats and independents, so that we don't act recklessly and harm Social Security.