...It is becoming apparent that the president is likely to face a maze of difficulties with both Democrats and Republicans as he presses forward on the central issues of his second-term domestic agenda: revamping Social Security and the tax code.

In this inaugural week, even before the full Congress was back on the job for this year's real working session, Rep. Bill Thomas, the House Ways and Means Committee chairman, made clear during a forum that many legislators have their own ideas about how to approach the Social Security issue.

Thomas, R-Calif., who also chairs the Joint Committee on Taxation, said he thought that it would be wise to broaden the debate beyond the president's controversial proposal to divert a portion of younger workers' payroll taxes to private accounts. He suggested that even with the Republican majority in both houses, the president's plan wasn't likely to get far unless it was palatable to both parties.

Thomas also said Congress ought to look at changes to the tax code in tandem with changes to the Social Security program -- a position at odds with the White House's ambitious goal of finding a solution by the end of this year to the projected shortfall of the 70-year-old retirement program, and then moving on to revamp the tax code. Social Security trustees have said payments to older workers will begin to overtake payroll tax revenue beginning in 2018, but Social Security surpluses will cover the entitlements until 2042.

Thomas' comments, however, were just the newest fissures within the Republican majority. The White House is not expected to flesh out a full plan on Social Security until February, but some GOP members have privately noted that they are facing more resistance to Social Security changes back in their districts than they had expected -- particularly with the $5 million campaign launched by the AARP, a lobbying organization for the elderly, against the president's proposal for private accounts.

Rep. Phil English, R-Erie, who serves on the House Ways and Means Committee and is a longtime advocate for tax code changes, said he thought there could be considerable support for Thomas' idea of working on Social Security and tax issues at the same time.

English said it was important to 'reposition' the debate over the nation's retirement program. "I think Chairman Thomas made an important contribution to the debate by sending a message to the White House that we need to be flexible and bipartisan in how we approach Social Security reform," he said.

Thomas "played a very important role in reminding those involved in the debate that there are number of things we can do that will improve the solvency from Social Security, quite apart from the creation of individual accounts," English said. "And he also correctly and directly made it clear that individual accounts by themselves will only marginally improve the performance of the system overall."

As the Social Security discussion has begun in recent weeks, some Republican lawmakers have said they are worried about the possibility of a political backlash over benefit cuts for future retirees under Bush's plan. With the cost of the Iraq war and the president's tax cuts driving up the deficit, there is also concern about the transition costs required to create private savings accounts, which could be as high as several trillion dollars over the next decade.

Sen. Lindsay Graham, R-S.C., who has reportedly met with key Democrats over breakfast to discuss Social Security options, has put forward outlines of his own plan and maintained that there must be a bipartisan solution for any measure to succeed. While he said he plans to work with the president, he has expressed reservations about borrowing the money to finance the private account transition. In a December newspaper article he co-wrote with Sen. Ken Conrad, D-N.D., Graham said the move "would pass on an unfair burden to future generations and could undermine the fiscal strength of the nation."

"Part of the problem," said Norman J. Ornstein, a resident scholar at the conservative American Enterprise Institute in Washington, "is that Thomas is saying one thing, Lindsay Graham is saying another thing, and [Senate Majority Leader] Bill Frist is saying another thing. Someone has got to provide a coherence in the process here in the short run, and allow it to move forward. That's got to be done by Bush."

While Democrats are the congressional minority, they have lambasted the White House for "exaggerating" the Social Security crisis and seized on the cost of the private accounts transition as a boon for "fat cats on Wall Street." This weekend on a Sunday morning ABC-TV program, Senate Minority Leader Harry Reid of Nevada said the president had "manufactured" the Social Security crisis. According to a Time Magazine poll published this weekend, only 45 percent of respondents said they thought the Social Security program was in crisis.

Passing any piece of legislation requires only a majority of House members, but in the Senate, Democrats can try to block any measure by use of the filibuster, a delaying tactic that requires 60 votes to quash.

And two Senate Finance Committee members, ranking Democrat Max Baucus of Montana, who has aided Bush on tax cut and Medicare issues, and Sen. Olympia J. Snowe, R-Maine, said the president will have to go to far greater lengths reaching out to both parties if he expects to win passage of his Social Security plan.

"If there's a will for this to be bipartisan, there's a way to get reform passed," Baucus said. "But it's got to be honestly, truly bipartisan, not in name only."

"I think it's going to be an indispensable ingredient for the president to engage with members of Congress on some of these key issues," Snowe said. "I think it helps to pave the way for smoother relationships and better understanding on some of the key goals the president wants to accomplish and whether or not its possible."

Until this week, most legislators didn't expect to look at the tax code until after the Social Security debate, and to a large extent that will depend on coordination between congressional leaders.

Pennsylvania Sen. Rick Santorum will help shape the course of those issues in his chamber as chairman of the Republican Conference, and he could be a key voice in the Social Security debate as chairman of the Finance Committee's subcommittee on Social Security and Family Issues.

In an interview late last week, Santorum said that through the course of the debate, he is expecting that the public will see the wisdom of using "the power of the American economy through private savings accounts to pay for [Social Security] benefits in the future," and he plans to help the president build support for his plan.

But regarding the tax code, Santorum said he was waiting for more specifics from the White House. "I'm not quite sure I understand where the president wants to go," he said. "I'm not convinced the folks I represent have a sense of what kind of tax code changes they would like. ... This is probably unusual for Rick Santorum, but this is one of the issues where I'm willing to listen to a lot of different people and gather forth the ideas and try to get the consensus for how we do this."

Santorum's spokeswoman said Thomas' call for tackling both issues at the same time did not change the senator's view that the tax code debate would wait until the end of the year.

When Snowe was asked about whether Congress could feasibly handle both at the same time, she laughed. "Good luck," she said.

By Maeve Reston, Pittsburgh Post Gazette  Jan 20, 2005

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