Bush Forms Commission to 'Save' Social Security

W A S H I N G T O N, May 2, 2001 -- President Bush today reached out and touched what has long been known as the "third rail" of American politics, creating a new commission to come up with a plan to reform Social Security.

"We can postpone action no longer," the president said at a Rose Garden ceremony this morning. "We must save Social Security."

Bush made the case, as he did during last year's presidential campaign, that a partial privatization is necessary to strengthen the ailing federal retirement program.

"Social Security reform must offer personal savings accounts to younger workers who want them," he said. "Personal savings accounts will transform Social Security from a government IOU into personal property and real assets."

Bankruptcy Looms as Baby Boomers Retire

The 16-member presidential commission consists of eight Republicans and eight Democrats and is being co-chaired by former Democratic Sen. Daniel Patrick Moynihan of New York and Dick Parsons, the co-chief operating officer of AOL/Time Warner and a former Ford administration official.

"It's the most important possibility in social insurance since Franklin D. Roosevelt," said Moynihan.

"I am a baby boomer … and I've been contributing to the Social Security system since 1964," added Parsons. "And until this point it time, I never believed that I was going to get anything out of Social Security when I retire."

The commission is expected to hold both closed meetings and open hearings in the coming months before making its report to the president this fall.

Social Security currently pays benefits to some 39 million retirees. With the nation's 76 million baby boomers heading toward retirement age, the federal government projects that the Social Security Trust Fund will be completely exhausted by the year 2040.

In order to head off that looming bankruptcy, Bush has called for the creation of new accounts that would allow younger workers to invest a portion of their Social Security payroll taxes in the potentially more lucrative stock market.

"Today, young workers who pay into Social Security might as well be saving their money in their mattresses — that's how low the return on their contributions is," he said.

Dems: 'Don't Mess With Social Security'

But even partial privatization of the 65-year-old program is anathema to many Democrats, and Democratic leaders on Capitol Hill were quick to assail the president's plan.

"Why we would ask people to jeopardize their retirement savings, as critical as they are … I can't tell you," said Senate Minority Leader Tom Daschle, D-S.D., citing recent gyrations in the stock market. "What we say today and tomorrow and every time we take this issue up is: Don't mess with Social Security."

Democrats are also crying foul over the make-up of the commission, accusing Bush of stacking the deck by appointing only people who support his proposal.

"This is not a bipartisan Social Security commission … This is a presidential advocacy commission. It is a preordained outcome," insisted House Minority Leader Dick Gephardt, D-Mo. "We are not going to stand by and let Social Security be ruined."

Social Security is a contentious issue — one so fraught with political peril that is often referred to as a political "third rail." In a recent ABCNEWS/Washington Post poll, 52 percent of Americans said they favored the idea of allowing workers to invest some of their Social Security taxes in stocks — down 12 percent from last May.

"When it makes its report," Bush said of the commission he created today by executive order, "the Congress and I will face some serious decisions."