Washington (Associated Press, reported in USA Today), June 9, 2005:
Key Senate Republicans privately reviewed suggestions Thursday for raising the Social Security retirement age while limiting future benefits for upper-wage earners, officials said, as they sought momentum for legislation atop President Bush's second-term domestic agenda.
Prospects for swift Senate action appeared to dim during the day due to opposition to Bush's call for personal accounts under Social Security.
"I don't look for it until later on in the fall," said Sen. Trent Lott, R-Miss. Lott and other Republicans on the Senate Finance Committee attended a meeting where the panel's chairman, Sen. Charles Grassley, R-Iowa, outlined suggestions to achieve financial solvency for the Social Security program. Grassley seels to build "a consensus proposal" among Republicans on the panel.
Choices included a gradual increase in the retirement age, as well as steps to hold down the cost of benefits paid to upper-wage earners who retire in the future, Republicans felt.
Grassley's presentation would restrain the growth in benefits for middle-income as well as upper-income wage earners, and has drawn sharp criticism from Democrats as well as some Republicans.
A call to allow younger workers to establish personal retirement accounts with a portion of the Social Security payroll taxes was not proposed. At the same time, their guaranteed government benefit would be reduced. Under the suggestions Grassley presented, upper-wage earners of the future could expect smaller benefits than they now are scheduled to receive.
Under current law, Social Security payroll taxes are levied on the first $90,000 of an individual's income, and a workers' beginning Social Security benefit at retirement is calculated based on the tax they have paid over their working life. The $90,000 figure rises annually, and the starting benefit along with it.
Under Grassley's suggestion, the $90,000 figure would continue to rise as current law provides, but the beginning benefit would not, according to officials who attended the meeting.
Once set at 65, it has been rising slowly under the terms of 1983 legislation, and is scheduled to reach 67 for individuals born after 1960.
The chairman stressed that his purpose was to begin a discussion about steps needed to achieve solvency for Social Security and emphasized he was open to changes. Under official projections, the trust fund is scheduled to pay out more in benefits than it receives in taxes in 2017, and become depleted in 2041.
Republicans acknowledged that without Democratic support, they confront a daunting political challenge. Democrats remain opposed to personal accounts, and recent polling confirms widespread public skepticism.
Republicans hold an 11-9 majority on the Finance Committee and could send legislation to the floor without Democratic votes if they could unite behind a plan.
But Sen. Olympia Snowe, R-Maine, is regarded as unlikely to support personal accounts, and conservatives are reluctant to embrace legislation that lacks them.
At the same time, several officials said Snowe, who faces re-election next year, had expressed concern at the meeting of committee Republicans about the steps needed to achieve solvency.
Asked afterward in a CNN interview about the prospects for legislation, she said, "Frankly, I think it's going to take a great deal of time, and we really shouldn't rush to judgment unless we can build the broad bipartisan support that's going to be essential on a key question."
Democrats have said they won't work with Republicans on bipartisan legislation until Bush and the GOP abandon their call for personal accounts paid from payroll taxes.
Copyright 2005 The Associated Press
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