The latest news out of Washington has President Bush's top Social Security adviser playing to Democrats in the hopes that the administration can slip its controversial private accounts into the program's reform plan.
Reiterating a party line late last week, Charles Balhouse, special assistant for economic policy in the Bush administration, told the Congressional Quarterly that "Social Security is simply too important for partisan politics."
But Democrats still feel strongly about the potentially negative affects of private accounts and have refused to negotiate on an overhaul as long as Bush continues to press that they be funded out of payroll taxes.
"Deep benefit cuts and trillions in new debt is no way to commemorate the 70th anniversary of Social Security," said Rebecca Kirszner, a spokeswoman for Senate Minority Leader Harry Reid (D-Nev).
In the CQ report, Balhous argues that individual accounts would boost rates of return for wage earners. And the trillions of dollars the accounts would cost to establish should be considered an advance payment on future obligations and not an added cost.
As millions of Baby Boomers retire in the coming years, Social Security is expected to begin paying out more in benefits than it receives in contributions by about 2017. Bush's private accounts would be a mix of stock, bond and mutual funds. Wall Street money managers, which could either reap millions of dollars in fees or, alternatively, an enormous headache managing all the new accounts, have sat on the sidelines during the debate.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.