President Bush Brings Social Security Debate to Falls Church

By Darien Bates

The debate over Social Security reform came into Falls Church last Friday, with no less than President Bush showing up to promote his "private accounts" plan, and Rep. Jim Moran, who represents the area in the U.S. Congress, countering with a forum of his own.

President Bush took the final stages of his 60 day campaign for Social Security reform to the James Lee Community Center in Falls Church last Friday, attending a morning public meeting in front of a packed house. Many of the guests were young working adults, under 40, the age group Bush believes will gain the most from his proposed Social Security personal accounts plan.

The visit followed Bush’s nationally televised press conference the night before – the first of its kind in over a year – when he introduced the concept of means testing to Social Security with what he called "progressive indexing." The new idea would alter how Social Security benefits are calculated for people depending on their income.

Currently, benefits are calculated by taking the average income from a worker’s three most productive years, then calculating the average growth of American wages between their most productive years and their retirement to get a final figure for their benefits.

Under the proposed changes, the lowest 30% of workers, now earning $20,000 a year, wouldn’t see any change in their calculations. But those earning $90,000 or more, currently the maximum income taxed by social security, would instead have the rate of growth for their benefits pegged to inflation, which generally increases at a slower rate than wages. Those earning between $20,000 and $90,000 would have their benefits calculated on a sliding scale between wages and inflation.

But while morning headlines focused on the new proposal, criticizing the plan as a cut in benefits–the headline on Friday’s Washington Post read, “Bush Social Security Plan Would Cut Future Benefits”–there was little mention of progressive indexing at the meeting in Falls Church.

Taking questions from a panel of invited guests, the president instead focused on discussing personal savings accounts, talking up the possible benefits of investment and attempting to counter growing public concern about the safety of investing.

Outside the event, supporters of the president’s social security plan, stood along Annandale road, holding signs and waving at passing cars.

Matt Lewis, from Generations Together, an organization supporting the implementation of private accounts, echoed the president’s assertion that many young people don’t expect Social Security to be there for them.

He said that it was too soon to talk about the idea of progressive indexing, insisting that the details would be worked out in Congress, but he was enthusiastic about the overall proposal.

A handful of protesters showed up, as well, but many more attended a nearby forum sponsored by Rep. Moran criticizing the President's plan.

At the scene, Bob Ritter, a 28 year resident of the Falls Church area, said that he first heard about the president’s speaking when he showed up to drop his daughter off at the preschool program at the center. He immediately went home, made a sign and returned to the street in time to hold it up while the president’s motorcade arrive.

Following the president’s visit, Rep. Moran, in whose 8th District the president held his event, challenged the Bush Social Security proposal at a town hall meeting at Providence Recreation Center, joined by former acting Social Security Commissioner Bill Halter.

Moran criticized the personal accounts as a risky way to handle retirement. “Social Security isn’t an investment account. It is a national insurance account that will be there when we need it,” he said.

Moran said that he wasn’t completely against the idea of means testing, but he said he is concerned that by making Social Security a program primarily benefiting the very poor, there would be less support for it among the general public. “Bush's plan is basically designed to dismantle Social Security,” he said.

He pointed to the recent Congressional budget vote that reduced money for the TANF (Temporary Assistance for Needy Families) program, and gained very little public acknowledgement, an example of how programs construed as welfare-based garner less public support.

Halter followed Moran with a criticism of Bush's private accounts plan, saying that it would create more debt, rather than shoring up a system facing future shortfalls. “The proposal shortens the life of the trust fund,” he said.

While there still has yet to be a specific proposal about the private accounts, according to a report released by the Brookings Institution authored by top economists Peter A. Diamond and Peter R. Orszag, some possible proposals could require as much as $7 trillion in transfers over the next 75 years. The present social security shortfall over the next 75 years is estimated at $4 trillion.

Despite officially ending his 60 day tour last week, Bush has continued to promote his Social Security plan, traveling to Mississippi on Tuesday to promote his plan at another community meeting.

Results released Tuesday in a USA Today/CNN/Gallup Poll showed that the percentage of people who disapprove of Bush’s handling of Social Security was at its highest point ever at 58% to 35% approving. The proposal of means testing benefits also received low marks with 54% of people polled disapproving and only 38% approving. The margin of sampling error is +- 3%.