WASHINGTON - House Republicans introduced a bill yesterday to use annual surpluses in the Social Security system to finance individual investment accounts for workers, but Democrats and budget analysts said the proposal would blow at least a $600 billion hole in the federal budget.
Republicans on the House Ways and Means Committee fleshed out the idea, proposed last week by Sen. Jim DeMint, a South Carolina Republican, to carve up the Social Security surplus into investment accounts for workers under 55.
That surplus now is invested by the Social Security Administration in government bonds, and the Treasury Department uses the proceeds from the bonds to pay for government programs.
Many members of Congress say their constituents regard this practice as equivalent to stealing from their retirement money to pay for highway construction and farm subsidies.
For that reason, supporters of the bill are hoping it will have enough political appeal not only to unite Republicans but to attract a few Democrats, who so far have been united in refusing to consider individual accounts.
Issue of solvency
Democrats blasted the latest Republican bill as proof that Republicans were interested not in guaranteeing the long-term solvency of Social Security but in substituting risky investment accounts for today's guaranteed retirement benefit.
"The truth is all they've done today is dress up a wolf - Social Security privatization - in sheep's clothing," said Rep. Steny H. Hoyer, a Democrat from Southern Maryland.
Rep. Charles B. Rangel of New York, the top Democrat on the House Ways and Means Committee, called the proposals "fiscal gimmicks" and an assault on the entire system.
"This proposal does not help Social Security, it threatens Social Security's solvency. It shows that the true goal of its backers is to replace Social Security with private accounts," said Rangel. "The American people have made it clear that they do not want Social Security privatized."
Rep. Benjamin L. Cardin, who represents the Baltimore area, said the plans do nothing to address the long-term solvency of the program - which is exactly what President Bush challenged Congress to do.
"Instead of securing the Social Security trust funds, the congressional Republicans' plan would divert money from the trust funds, furthering threatening the future benefits of all Americans," Cardin said.
And even some Republican supporters of individual accounts criticized the new Republican bill for doing nothing to shore up Social Security's finances with either benefit cuts or tax increases.
"You must eat your spinach before having dessert," said Rep. Jim Kolbe, an Arizona Republican who is author of a wide-ranging Social Security bill, "and this plan only offers dessert - the personal retirement accounts."
Today, Bush will be at Montgomery Blair High School in Silver Spring to talk about Social Security, and opponents of his proposal plan to be out to rebut his arguments.
Americans United to Protect Social Security and other advocacy groups are organizing a rally before Bush's event at a shopping center across from the school.
They are also planning a news conference after the meeting, with Rep. Chris Van Hollen, a Montgomery County Democrat, and County Executive Douglas M. Duncan.
The Los Angeles Times is a Tribune Publishing newspaper. Sun staff writer Gwyneth K. Shaw contributed to this article.