Bush Offers New Social Security Plan

04/29/2005

WASHINGTON (AP) - After nearly 60 days on the road pitching Social Security changes, President Bush is offering a new plan to fix its finances by cutting benefits of more prosperous future retirees. Democrats still aren’t buying it.

In a prime-time news conference, Bush refused to back off his desire to carve private retirement accounts out of Social Security. Democrats say those personal accounts are a deal-breaker that would keep most of them from supporting Bush’s revisions.

But for the first time he proposed changes under which Social Security checks for low-income workers retiring in the future would grow faster than those for people who are better off.

“By providing more generous benefits for low-income retirees, we’ll make this commitment: If you work hard and pay into Social Security your entire life, you will not retire in poverty,” Bush said.

The White House said Bush’s proposal could be accomplished with a “sliding-scale benefit formula.” That would mean lower Social Security payments for future middle- and upper-income retirees than they are currently guaranteed - a fact Bush himself did not mention in his 60-minute session with reporters.

Bush’s plan immediately drew renewed ire from Democrats.

Bush would “gut benefits for middle-class families,” House Democratic Leader Nancy Pelosi and Senate Democratic Leader Harry Reid said in a joint statement.

They reiterated their opposition to Bush’s desire to let younger workers divert some of their Social Security taxes into personal retirement accounts. “All the president did was confirm that he will pay for his risky privatization scheme by cutting the benefits of middle-class seniors,” Pelosi and Reid said.

Bush held his first prime-time televised news conference in more than a year as he scrambles to generate momentum for his stalled Social Security plans and to calm anger over $2-a-gallon gasoline prices. Those two issues have dragged his approval ratings down.

The president appeared at ease in the East Room of the White House as he fielded questions from reporters after a 7-minute opening statement. At times, he twisted the toe of his shoe on the carpeted riser.

He discussed major foreign policy challenges, the troubled nomination of John Bolton to be U.N. ambassador and his quest to get Senate votes on some of his controversial nominees for the federal bench. He playfully insisted he didn’t take polls too seriously.

“You know, if a president tries to govern based on polls, you’re kind of like a dog chasing your tail,” he said.

On international issues, Bush:

_Praised Iraq’s National Assembly for approving on Thursday the country’s first democratically elected government, but declined to set a date for the withdrawal of U.S. troops. Bush said he is pressing Iraq’s incoming prime minister, Ibrahim al-Jaafari, to keep hands off the Iraqi security force that the U.S. military is creating and training.

_Called North Korean leader Kim Jong Il “a dangerous person” and defended multination talks aimed at curbing his nuclear-weapon ambitions. The president said the missile defense system the United Stated is developing is part of his strategy for dealing with Kim.

_Expressed dismay with Russian President Vladimir Putin’s decision to sell anti-aircraft missiles to Syria.

_Stated that the United States, Britain, France and Germany all believe “we can’t trust the Iranians when it comes to enriching uranium.”

On domestic topics, Bush said he understood that motorists and businesses were unhappy about gasoline prices that are expected to stay above $2 a gallon through summer. Increasing world demand for oil, particularly from fast-growing nations like China, and lack of new U.S. refineries are putting upward pressure on prices, he said.

He pledged to encourage oil-producing nations to maximize production and promised to protect U.S. consumers. “There will be no price gouging at gas pumps in America,” Bush said.

He spoke on the same day the world’s largest publicly traded oil company, Exxon Mobil Corp. (XOM), announced that its profit for the first three months of the year had risen 44 percent to $7.86 billion from the corresponding quarter a year ago.

And he said would work on long-term ways to reduce America’s need for foreign oil.

He prodded Congress to get an energy bill to his desk by summer but acknowledged that measure was “certainly no quick fix” for high fuel prices. The House has passed energy legislation; a companion measure awaits Senate action.

Bush disagreed with the conservative Family Research Council’s contention that his judicial appointments were being held up in the Senate because of their religious faith. “I think people are opposing my nominees because they don’t like the judicial philosophy of the people I’ve nominated,” he said. “Some would like to see judges legislate from the bench. That’s not my view.”

Bush continued to back Undersecretary of State Bolton to be ambassador to the United Nations. Bolton’s confirmation has been stalled by allegations he dressed down subordinates, unease over his past hostility toward the United Nations and accusations he tried to pressure career intelligence analysts into twisting facts for political reasons.

“John Bolton is a blunt guy,” Bush said. “Sometimes people say I’m little too blunt.”

In trying to reassure lower-income Americans they had nothing to fear from a Social Security overhaul, he advocated a proposal similar to one by Robert C. Pozen, a Democrat with MFS Investment Management, a Boston mutual fund company.

Pozen’s plan addresses the way Social Security benefits are increased to compensate for rising living costs. The Social Security benefits of low-income workers would remain indexed to wages - as they are now. But the benefits of higher-income workers would track price indexes. Prices tend to rise more slowly than wages so the Social Security benefits of higher-income workers would grow more slowly than under the current rules.