Congress jeers and cheers Bush econ plans

By DAR HADDIX, UPI Business Correspondent  |  Feb. 3, 2005 at 2:42 AM
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WASHINGTON, Feb. 3 (UPI) -- In the first State of the Union delivered during his second term, U.S. President George W. Bush fleshed out his sweeping economic proposals for the next four years, calling for partially privatizing Social Security, permanent tax cuts, a temporary guest worker program, and curbing health-care costs, moves that prompted the predictable jeers and cheers from opposite sides of the aisle.

Bush, who called for Americans to be "good stewards of this economy," proposed a strategy that included cutting more than 150 discretionary programs, increased funding for higher-education and job-training programs, and completely overhauling an "archaic, incoherent" federal tax code.

Bush paid particular attention to explaining his plan for Social Security to the U.S. public, a campaign that has gained momentum in recent weeks. Bush carefully outlined what he saw as the past, present and future state of the retirement security program. "Social Security was created decades ago, for a very different era," he said. "A half century ago, about 16 workers paid into the system for each worker drawing benefits ... right now it's only about three workers, and over the next few decades, that number will fall to just two workers ... By the year 2042, the entire system would be exhausted and bankrupt."

Bush called for "an open, candid review of the options," but recommended personal retirement accounts, with safeguards such as balanced portfolios and gradual payouts. He assured workers 55 and over, "Do not let anyone mislead you. For you, the Social Security system will not change in any way." He compared his proposed personal retirement accounts to the Thrift Savings accounts federal employees, which allows them to deposit part of their paychecks into any of five diversified investment funds.

Republicans praised Bush's economic intentions, especially regarding Social Security.

Rep. Patrick McHenry, R-N.C., noted, "He's taking on the tough issue of saving Social Security for future generations, while maintaining our commitment to those at or near retirement age. In order to save Social Security, we must fix Social Security," he said.

Sen. Olympia Snowe, R-Maine., said, "The president indicated there is a long-term problem, and I believe that strengthening the system will require an open and exhaustive review of the level of the urgency of the issue, and how best to move forward."

Some Republicans also took the opportunity to slam what they saw as Democrats ducking the issue.

Rep. Joe Wilson, R-S.C., said, "Social Security means a lot to me and I'll tell you why. I just had a grandson born last week. In 2042 he'll be 37. It's young people today and people his age that Social Security will affect. The Democrats can maintain that we don't need to try to fix the system, but that's not a solution for my grandson or for young people today."

"Some elected officials want to ignore the problem except to make political hay out of it," said Senate Finance Committee Chairman Sen. Chuck Grassley, R-Iowa. "But we're elected to solve problems, not pass them on to the next generation. It's our responsibility to address this issue right now, before the situation gets worse."

Bush's suggestions to make the tax cuts permanent and simplify the federal tax code also won kind words from his GOP fellows.

"You shouldn't need a Ph.D. or a staff (of helpers) to file your taxes," said Grassley. "The president is serving taxpayers by taking this on."

House Small Business Committee Chairman Don Manzullo, R-Ill., said, "We must make the tax cuts permanent to continue to provide incentives to our small businesses to innovate and grow."

Manzullo also praised Bush's plan to cut health-care costs, calling this the "number-one concern of small businesses in America."

Bush proposed cheaper health-insurance options and tort reform to lower medical liability insurance costs.

Sen. Snowe used the opportunity to push the Association Health Plan, a bill she sponsored which would allow small businesses to join together and use their bargaining power to achieve the same savings when purchasing health-care plans that up to now have only been enjoyed by the government and large businesses.

Others expressed relief and confidence in Bush's proposal to rein in federal spending. "I was happy to hear the president continue highlighting the need to control federal spending. He made his commitment to reducing the deficit crystal clear. As the budget process gets underway, I look forward to working with him to fund our national priorities within a fiscally responsible framework," said House Budget Committee Chairman Rep. Jim Nussle, R-Iowa.

But some Republicans were more cautiously supportive, especially on budget reform.

"As a member of the Budget Committee, I will work with other members and the president to enact a budget that forces the federal government to live within its means. There are billions of dollars of waste we can and should trim from the federal budget," McHenry said.

"I think the funding he requests is going to be something we have to carefully consider. We do want to hold the line on unnecessary spending. We have a deficit problem. We need to control spending, as he points out. I think he is going to submit a very tough budget to the Congress," Sen. Thad Cochran, R-Miss., said.

Cochran added, "We have an obligation though to help ensure that the operations in Iraq are brought to a conclusion successfully, and I think supporting the president in his efforts to maintain the peace here at home and protect our security are very important indeed."

Cochran was equally cautious on Social Security.

"We have an opportunity, but we have an obligation to senior citizens and to the younger people who are entering the workforce today to help ensure that they are going to be able to trust the government to have a workable program that benefits them as well," said Cochran.

Democrats, who at present have an almost unified front against the White House proposal on Social Security, slammed Bush's economic agenda as in some ways going too far and in others not going far enough.

"We can fix the "(Social Security) system with minor changes," said Rep. Russ Carnahan, D-Mo. "Private accounts should not be used to eat away Social Security funds."

"In order to get the budget balanced by 2009, it's going to take a fiscal discipline that Congress and the president showed in the 1990s," Carnahan said.

"Privatization is something Americans do not want," Rep. Sheila Jackson Lee, D-Texas, said.

Emanuel Cleaver, D-Mo., criticized the president for not being more clear on how much the changes to Social Security would cost. Cleaver scoffed at Bush's budget-balancing plans.

"Fourth-grade kids can figure out the math -- you can't spend more and then not take in more," Cleaver said. "With the way things are going, no way the deficit could be cut in half."

And last year's Democratic presidential contender Rep. Dennis Kucinich, D-Ohio, said he foresaw grim consequences for the Republican party if Bush pressed on with his Social Security agenda.

"If the president pushes Social Security and privatization, Democrats will retake the House, the Senate and in a few years the presidency. It doesn't matter who is the head of the party."


(Reported with Joi Preciphs, Peter Holley and Stokely Baksh in Washington.)

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