WASHINGTON (Talon News) — A memo from a top Bush aide leaked to the press has heightened the rhetoric in the debate over Social Security reform. The memo indicates that future benefits may need to be cut despite President Bush’s reluctance to include such measures in his proposal.
Peter Wehner, Bush’s director of strategic initiatives, wrote in an e-mail, “You may know that there is a small number of conservatives who prefer to push only for investment accounts and make no effort to adjust benefits — therefore making no effort to address [the] fundamental structural problem [of Social Security].”
He concluded, “In my judgment, that’s a bad idea.”
Wehner suggested that the formula that establishes initial Social Security benefit levels be based on inflation instead of “wage indexing,” as it is now.
He wrote, “If we borrow one to two trillion dollars to cover transition costs for personal savings accounts and make no change to wage indexing, we will have borrowed trillions and will still confront more than $10 trillion in unfunded liabilities. This could easily cause an economic chain-reaction: the markets go south, interest rates go up, and the economy stalls out.”
Wehner advised Republicans to “establish an important premise” that the current system is “heading for an iceberg.”
Democrats seized on the memo’s contents that they say reveals a political strategy that is driving the push for reform. The memo talked about the political advantage that could be gained from a successful reform effort.
“If we succeed in reforming Social Security, it will rank as one the most significant conservative governing achievements ever,” Wehner wrote, suggesting that the Democratic Party is the party of the past on this issue.
The memo went on to say, “For the first time in six decades, the Social Security battle is one we can win. And in doing so we can help transform the political landscape of the country.”
White House Press Secretary Scott McClellan dismissed that criticism, saying, “This would be an important achievement for all the American people.”
He continued, “This is critical for our future generations, our children and grandchildren in helping them have a significant retirement savings when they do, ultimately, retire. I think that if you look at some of the information that has been put out, a younger worker at age 30 right now is facing massive benefit cuts under the current system. That’s why we need to act.”
McClellan read comments made by President Bill Clinton in 1998 that warned of the impending crisis faced in regard to Social Security. He reiterated Bush’s commitment to confront the problem now and not pass it on to future generations.
The White House press secretary stressed the priority the President has placed on reforming the retirement system, saying, “The president believes this is one of the biggest priorities and biggest challenges facing the American people. And he is committed to solving this problem in a bipartisan way. We are open to all ideas and proposals that are consistent with the President’s principles”
“The president has made his principles very clear that should guide us as we move forward on reform,” McClellan added.