Grassley not giving up on personal accounts

For Immediate Release:

June 24, 2005

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By Jane Norman

Des Moines Register

Washington, D.C. — The idea of creating personal accounts for U.S. workers' Social Security taxes won't be axed until President Bush declares it dead, Senate Finance Committee Chairman Charles Grassley of Iowa said Wednesday.

Grassley, a Republican in charge of the Social Security overhaul in the Senate, told Iowa reporters in a conference call that despite opposition from Democrats and some Republicans, he will continue to push for personal accounts until he hears from Bush that he is no longer interested in the idea.

"I don't think the president can back off, or should back off," said Grassley. But he said that if Bush does cool to the idea of personal accounts, Democrats then would be obliged to negotiate on a Social Security plan because they have said the accounts are standing in the way of their cooperation.

Grassley's comments came the day after Sen. Robert Bennett, R-Utah, said Bush told him in a private conversation at the White House that he liked a bill of Bennett's that does not include the accounts, which have drawn intense opposition from Democrats and liberal interest groups.

Some Republicans, including on Grassley's committee, also are lukewarm to the idea, and Grassley — who continues to support the accounts — is struggling to find enough support on his committee for legislation.

But he said if he drops the accounts, he will face problems as well — finding approval from conservative Republicans who think the accounts must be part of any plan.

"A lot of Republicans are not going to vote for a Social Security bill that just solves the problem of solvency because they want real reform," Grassley said.

The president has crossed the nation for months stumping for a plan in which younger workers could voluntarily place a portion of their taxes in private accounts. He repeated his support Wednesday at an appearance in southern Maryland. "If you so choose, we ought to let you earn . . . a reasonable rate of return on your own money," he said.

Bush is scheduled to speak again today on Social Security in suburban Washington.

Grassley said he has no meetings on Social Security scheduled for this week with committee Republicans, but he has not yet given up on producing a bill and sending it to the Senate floor by the summer recess in August.

Whether or not his bill includes private accounts, in the end "this decision is going to to be made by 100 senators" through amendments on the floor, Grassley said.

Meanwhile, two Republican senators teamed up with a group of House Republicans to say they will propose legislation that would create private accounts for workers out of the Social Security trust fund's surplus money.

Currently, the surplus is loaned to the government to pay for other federal spending, but the surplus is projected to be gone by 2017 as baby boomers retire.

Called "GROW" accounts, they would be owned by workers under 55, with the money invested in marketable Treasury bonds. An independent board would manage and administer the accounts. The account balances would be used to help pay retirees' benefits.

House Ways and Means Committee Chairman Bill Thomas, R-Calif., said he was pleased with the idea and that it would likely form the basis for an emerging package on retirement security.

But the proposal for the accounts would not deal with the problem of Social Security's looming shortfall expected in 2041. Grassley said in a statement that "I want to pass legislation that makes Social Security solvent along with personal accounts, if possible, and that obviously goes further than this legislation does."

Democrats were critical as well, with House Minority Whip Steny Hoyer, D-Md., saying that all Republicans did was "dress up a wolf — Social Security privatization — in sheep's clothing." Hoyer said the plan would do "absolutely nothing" about the system's financial problems and deplete the trust fund even sooner.