<p>U.S. President Bush's "Advisory Panel on Federal Tax Reform" is mouthing some surprisingly attractive lines about how we ought to change our tax system.</p>
<p>A panel appointed by Mr. Big Deficits points out that "we have lost sight of the fact that the fundamental purpose of our tax system is to raise revenues to fund government."</p>
<p>Mr. Loophole's appointees argue that "a rational system would favor a broad tax base, providing special treatment only where it can be persuasively" justified.</p>
<p>Despite Bush's devotion to shifting taxes away from the rich, his panel insists that we need to "share the burdens and benefits of the tax system in an appropriately fair and progressive manner."</p>
<p>An elaborate hoax</p>
<p>And it solemnly pledges that its July 31 report will "recommend options that are revenue neutral" - that is, no more unaffordable tax cuts.</p>
<p>Wow! This sounds pretty good. But sadly, it's all a hoax.</p>
<p>You might begin to suspect as much by looking at the makeup of Bush's advisory panel. As is traditional with Bush, the two top posts are held by corporate lobbyists.</p>
<p>The chairman is former Senator Connie Mack, Republican, Florida, a man of firm beliefs about taxation. The first is that the rich pay too much, while the middle class and the poor pay too little.</p>
<p>That's why, as a senator, Mack co-sponsored the Dick Armey "flat tax" bill. His second strongly held principle is that two plus two equals some number much larger than four.</p>
<p>The panel's vice chairman is former Senator John Breaux, Democrat,Louisiana, a man of no apparent principles other than that a bad deal is always attainable.</p>
<p>In 2001, for instance, Breaux helped work out a "compromise" with Bush's initial tax cut plan that pretended to be slightly smaller than Bush had originally proposed, but turned out to be almost identical.</p>
<p>To top it off, Bush has detailed two officials from his Treasury Department to head the panel's staff, and assure that the panel doesn't deviate from Bush's irresponsible, regressive approach to tax policy.</p>
<p>With these folks in charge, it's not hard to predict that despite its appealing rhetoric, the panel is not going to deliver true tax reform. Tax deform is more accurate - as a close reading of what the panel has already said makes clear.</p>
<p>Without doubt the biggest travesty involves how the panel plans to define "revenue neutral." This term has been around for a long time, and it has a precise meaning: raise just as much revenue as current law.</p>
<p>To be sure, maintaining current-law revenues isn't anything to brag about, given our deficit mess.</p>
<p>According to the Congressional Budget Office, sticking with current law means that for the rest of this decade, non-Social-Security federal revenues as a share of the economy will average 21 percent less than in fiscal 2000 - the last time the regular budget was balanced. Such a huge shortfall calls out for raising taxes right now.</p>
<p>But after 2010, when Bush's tax cuts are scheduled to expire, things start looking up, even under current law.</p>
<p>By fiscal 2012, non-Social-Security revenues are expected to be only 9 percent below their 2000 level as a share of the economy - and the gap will fall to 6 percent by 2015.</p>
<p>Some hope later</p>
<p>So a plan that maintains current-law revenues would at least offer some fiscal hope down the road.</p>
<p>But Bush's panel almost offhandedly dashes that hope. It tells us that by its definition, "revenue neutral" won't mean "revenue neutral" at all.</p>
<p>Instead, it will mean something completely different - specifically, revenues equal to the much lower amount that would be collected if most of Bush's tax cuts are made permanent.</p>
<p>Although even our taxaphobic Republican Congress hasn't figured out how to afford such fiscal profligacy, the panel blithely plans to call for new tax cuts costing US$1.5 trillion (including interest) over their first 10 years and US$5.7 trillion more over the subsequent decade!</p>
<p>Being fair</p>
<p>To be fair, Democratic presidential candidate John Kerry quietly took the same preposterous approach during his 2004 campaign, so he could pretend that his hugely expensive tax cut program was a deficit-busting tax increase.</p>
<p>A blessedly little-noticed tax plan put forward earlier this year by John Podesta's Center for American Progress employs the same trickery (hidden in footnotes). But whether it's Democrats or Republicans, pretending that Bush's tax-cut wish list is the status quo is entirely dishonest.</p>
<p>Meanwhile, the president's panel doesn't plan to honor its pious lines about closing loopholes and treating people fairly either.</p>
<p>Our current tax system allows many of our biggest and most profitable corporations to pay little or no tax. It taxes investment income at less than half the rate workers pay.</p>
<p>And it tolerates rampant upper-income tax sheltering. But rather than deal with these problems, the panel wants to make them worse.</p>
<p>Tipping the hand</p>
<p>The panel tips its hand when it says it opposes any tax system that "penalizes work, discourages saving and investment, (or) hinders the competitiveness of American businesses" - a tendentious right-wing phrase meant to imply that wages, investment income and profits shouldn't be taxed.</p>
<p>But if they're all off-limits, then what's left? The panel's likely answer will be some variant on a consumption tax - i.e., a tax system that, the panel might say, punishes spending.</p>
<p>A full-blown national sales tax or value-added tax replacement for the income tax seems unlikely, given the public outcry that either of these would cause at the extraordinarily high tax rate they'd require.</p>
<p>Indeed, Republicans who pushed a national sales tax in the 2004 elections found that voters detested the idea of paying the additional US$3,000 or so a year in taxes that all but the richest taxpayers would face.</p>
<p>So despite the fact that ultra-rightists like House Majority Leader Tom Delay, Republican, Texas, still promote the sales tax idea, Bush's panel will probably tilt instead toward a "stealth" consumption tax - by adding still more loopholes for investment income and profits, partly paid for by scaling back some middle-income tax breaks.</p>
<p>One way or another, Bush's panel will definitely call for shifting even more of the tax burden away from wealthy investors and onto workers (penalizing work will turn out to be OK after all).</p>
<p>Although such changes may seem "appropriately fair and progressive" to Bush and his panel, the result will be a tax code much less progressive than current law - if not an outright regressive tax system.</p>
<p>What are the options for those of us who really want a fairer, simpler tax code that raises enough money to pay for public services?</p>
<p>Of course, we must do whatever it takes to defeat the panel's evil plans. But we should also see Bush's phony call for tax reform as an opportunity.</p>
<p>First and foremost, we need to stress that Bush's panel is flat-out lying when it pretends that its recommendations are "revenue-neutral."</p>
<p>Once we expose the fact that the panel is promoting a US$7 trillion tax cut plan designed to bankrupt our country in perpetuity, everyone who cares about the future of our nation and our children ought to be concerned.</p>
<p>Second, we need to condemn Bush's panel for proposing to further shift taxes away from the rich and onto everyone else.</p>
<p>We'll have plenty of allies, since the public is decidedly against paying higher taxes for fewer public services.</p>
<p>What's wrong</p>
<p>Finally, if you asked most Americans what's wrong with the tax system, they'd say that it's unfair and complicated because it has too many loopholes for wealthy people and corporations.</p>
<p>Most Americans are right. We need to make it clear that we agree, by calling for an end to the hundreds of billions of dollars a year in corporate and upper-income tax dodges.</p>
<p>That way we can balance the budget, maintain our country, and stop treating honest ordinary citizens as tax chumps.</p>
<p>I'm reasonably confident that Bush's phony tax "reforms" will go down in flames.</p>
<p>But if we can go beyond that and persuade Americans that we have a better way to fix the tax code, we can help set the stage to elect the political leaders we need to achieve that goal.</p>
<p>Robert S. McIntyre is director of Citizens for Tax Justice, 1311 L Street NW, Suite 400, Washington, D.C. 20005.
</p>

<p>WASHINGTON - (KRT) - President Bush is hoping that younger workers will breathe new life into his stalled plan for redesigning Social Security.</p>
<p>Lawmakers returning to Congress from their spring break say Bush's efforts to build support for personal retirement accounts have fallen flat. At the halfway point in the administration's "60 cities in 60 days" tour to promote change, Bush appears to be, at best, only marginally closer to his goal than when he launched the public-relations effort at the beginning of March.</p>
<p>Congressional leaders now talk openly about postponing action on Social Security until next year or dropping private investment accounts. Sen. Charles Grassley, R-Iowa, the chairman of the Senate Finance Committee, which would oversee the legislation, told reporters in his home state this week that Bush has less than a 50-50 chance of success.</p>
<p>"I think it's a very heavy lift," Grassley said.</p>
<p>Bush has made transforming Social Security his top domestic priority. He proposes to give workers the option of diverting up to 4 percentage points of their 12.4 percent payroll tax to fund private investment accounts. Any gains from successful investments in stocks and bonds in those accounts would offset cuts for those workers' Social Security benefits. Many details remain hazy.</p>
<p>White House strategists are preparing a new appeal targeting younger workers, who tend to be more open to changes in the retirement program. Ideas under consideration include sending the president to more events on college campuses or other venues with young people.</p>
<p>Youth-friendly events would give Bush a made-for-TV opportunity to make his case that younger workers would be better off relying on financial markets to build nest eggs for retirement than putting their faith in the current Social Security system.</p>
<p>The shift in emphasis, which is likely to become apparent within the next two weeks, is a follow-up to the current strategy of trying to reassure older Americans that they have nothing to fear from the president's proposal. Bush has stressed for the past several weeks that Social Security retirement benefits wouldn't change for Americans 55 and older.</p>
<p>Although tweaking the president's message doesn't seem to have made much difference, Bush and his advisers say their campaign to reshape Social Security is on track. Both sides agree that the president has succeeded at least in making Social Security a hot topic. Polls also show that most Americans agree with Bush that the system needs change, even if they don't like his approach.</p>
<p>Bush acknowledges that personal accounts alone wouldn't fix Social Security's long-term solvency problems. He's promised to work with Congress on other changes, including possible benefit cuts, to deal with the impending retirement of the aging baby boom generation.</p>
<p>"The American people have moved further along in understanding that there's a problem. Does that mean that people (in Congress) are going to come back and say, `All my constituents are sold?' No," said White House spokeswoman Cathie Martin. "It's incremental."</p>
<p>Republican lawmakers who've withheld support from the president's plan say they don't feel any significant pressure from voters to back the White House.</p>
<p>Rep. Shelley Moore Capito, R-W.Va., said Bush's plans for Social Security are "going to be a tough sell" in her state largely because of concerns about benefit cuts. Bush carried West Virginia in both of his presidential campaigns and supported Capito in her race for Congress.</p>
<p>"There's concern, mostly by older people, that there's too great a risk involved," the congresswoman said in a telephone interview. Capito said she's not about to endorse a proposal that may never come to a vote in Congress.</p>
<p>"I'm glad I'm undecided," she said. "I don't want to react to something that's never going to come down the pike."</p>
<p>For interest groups with stakes in the fight, Congress' two-week spring break was a chance to pressure members in their home districts.</p>
<p>FreedomWorks, a group allied with Bush, sent its members "Easter recess action kits" that included talking points and sample questions for town-hall meetings.</p>
<p>AARP, the nation's largest organization for seniors, has spent more than $5 million during the congressional break on ads attacking Bush's private-accounts proposal.</p>
<p>Bush's opponents think it's only a matter of time before the president looks for a face-saving compromise.</p>
<p>"Clearly the public is not buying, and I don't think Congress will buy, the private accounts," said John Rother, AARP's director of policy and strategy. Bush "has a long history of taking what he can get and declaring victory."</p>
<p>But Rother said any attempt at a bipartisan plan to shore up Social Security would have to wait until Bush completes his 60-day tour at the end of April. By the end of this weekend, the president and other top administration officials will have visited 32 states for 108 Social Security-related events.</p>
<p>Bush will be on the road again Tuesday for a visit to Parkersburg, W.Va. He says he intends to "keep pounding on the issue" until he prevails.</p>
<p>---</p>
<p>© 2005, Knight Ridder/Tribune Information Services.
</p>

<p>Recently, Brian Reidl of the Heritage Foundation wrote a compelling defense of the Reagan deficits. In it, he challenged President Reagan's critics to "answer one simple question: Would you trade the collapse of communism, your smaller tax burden, some of your income -- and possibly your job -- in exchange for eliminating that $2.1 trillion in added debt?"</p>
<p>Reidl correctly observes that "not all debt is bad" when a prudent current or long-term benefit results. Investments in a home or a child's education usually make financial sense.</p>
<p>A home, besides letting you buy into an appreciating asset, brings a better life for you and your family now. Investment in education opens up productivity -- and financial rewards -- in the future.</p>
<p>Reagan always distrusted "the experts" and had a gift for putting the benefits of his programs into humorous perspective. With tax rate reductions, for instance, he joked about all the "expert" opposition in his farewell address:</p>
<p>"I even remember one highly respected economist saying, back in 1982, that 'the engines of economic growth have shut down here, and they're likely to stay that way for years to come.' Well, he and the other opinion leaders were wrong. The fact is, what they called 'radical' was really 'right.' What they called 'dangerous' was just 'desperately needed.'"</p>
<p>Today, the beware-the-deficit chicken hawks in both political parties are making the same mistakes they made during the 1980s, but now in the context of Social Security reform.</p>
<p>Like tax cuts, Social Security reform is an intense and polarizing issue -- which is why it's not yet being addressed in the presidential campaign. However, there are serious thinkers within the Beltway debating not whether Social Security will be reformed but how it should be done. The problem is that some Republicans and most Democrats see only the increased deficits resulting from any substantial change -- not the potential benefits.</p>
<p>Simple it's not, but there are sensible options and ways of putting some Reaganesque perspective on this problem.</p>
<p>For instance, the Alliance for Retirement Prosperity (www.arpnow.org) -- of which I am co-chairman along with former Social Security Commissioner Dorcas Hardy and former House Majority Leader Dick Armey -- has helped develop legislation that would enable every worker to invest half of his or her payroll tax in a personal retirement account.</p>
<p>Our proposal wouldn't raise taxes. It would not cut Social Security benefits. And it lays out a serious plan for funding the transition using modest spending restraint and prudent federal borrowing.</p>
<p>Our calculations show that the debt incurred to reform the Social Security system would total about $1.8 trillion, reaching that peak amount only in 2028. After 2028, program surpluses would begin paying down the debt, which would be eliminated completely after 15 years. As a result, there would be zero increase in federal debt over the long term.</p>
<p>Amazingly, as Empower America chief economist Larry Hunter illustrates in a new IPI report, the projected debt required by the current Social Security system -- which will move into deficit beginning in 2018 -- will reach $1.6 trillion by 2028.</p>
<p>But whereas the current system will career onward to higher and higher deficits -- impossible deficits projected at more that 300 percent of the gross domestic product -- our plan would reverse the process and leave us in a position to eliminate that debt entirely.</p>
<p>However, the deficit issue is only a part of the story. Other financial benefits of large personal retirement accounts are just as startling.</p>
<p>The accounts we propose would essentially end Social Security's massive unfunded liability, estimated today at $10.5 trillion. Eliminating this liability would be the largest debt reduction in U.S. history.</p>
<p>As for taxes, personal retirement accounts would provide the largest tax cut in U.S. history as well. Our plan would immediately reduce the payroll tax by 6.2 percent for every worker, and over time that tax would move down to just 3 percent, providing a huge benefit for American workers and their families.</p>
<p>Unlike the case with Social Security, Americans would have the choice to own and control their retirement investments. Families can build a retirement nest egg for themselves and their loved ones, resulting in a monthly retirement payout of as much as $3,500, compared to the maximum $1,500 available today.</p>
<p>Our plan will bring broader and more equitable ownership of assets, especially for low-income workers, and still provide a social safety net by guaranteeing workers at least what they would get under the current system.</p>
<p>To paraphrase Reidl, those who criticize President Bush's vision of creating an ownership society with personal retirement accounts on the grounds that the transition costs are too high should answer one simple question: Would you trade the opportunity for every worker to achieve the American Dream (owning a home, having a retirement nest egg), a smaller tax burden, elimination of Social Security's unfunded liability and a faster-growing economy in exchange for eliminating the $1.8 trillion in added debt?</p>
<p>The truth about what to do to reform Social Security is as evident today as the need to cut marginal tax rates was to Reagan in 1980. With Social Security reform -- as with the Reagan tax cuts -- what they call "radical" is really "right." What they call "dangerous" is just "desperately needed."</p>
<p>Let's invest in a sound and prosperous future for all Americans.<br />
Jack Kemp, a former congressman and GOP vice presidential candidate, is the co-director of Empower America and co-chairman of the Alliance for Retirement Prosperity, 1775 Pennsylvania Ave. N.W., 11th Floor, Washington, D.C. 20006. This essay was distributed by Knight Ridder/Tribune Information Services.</p>

<p>Recently, Brian Reidl of the Heritage Foundation wrote a compelling defense of the Reagan deficits. In it, he challenged Reagan's critics to "answer one simple question: Would you trade the collapse of communism, your smaller tax burden, some of your income — and possibly your job — in exchange for eliminating that $2.1 trillion in added debt?"</p>
<p>Reidl correctly observes that "not all debt is bad" when a prudent current or long-term benefit results. Investments in a home or a child's education usually make financial sense. A home, besides letting you buy into an appreciating asset, brings a better life for you and your family now. Investment in education opens up productivity — and financial rewards — in the future.</p>
<p>President Reagan always distrusted "the experts" and had a gift for putting the benefits of his programs into humorous perspective. With tax rate reductions, for instance, he joked about all the "expert" opposition in his farewell address:</p>
<p>"I even remember one highly respected economist saying, back in 1982, that 'the engines of economic growth have shut down here, and they're likely to stay that way for years to come.' Well, he and the other opinion leaders were wrong. The fact is, what they called 'radical' was really 'right.' What they called 'dangerous' was just 'desperately needed.' "</p>
<p>Today, the beware-the-deficit chicken hawks in both political parties are making the same mistakes they made during the 1980s, but now in the context of Social Security reform.</p>
<p>Like tax cuts, Social Security reform is an intense and polarizing issue … which is why it's not being addressed by either presidential candidate — at least not yet. However, there are serious thinkers within the Beltway debating — not whether Social Security will be reformed — but how it should be done. The problem is that some Republicans and most Democrats see only the increased deficits resulting from any substantial change — not the potential benefits.</p>
<p>Simple it's not, but there are sensible options and ways of putting some Reaganesque perspective on this problem. For instance, the Alliance for Retirement Prosperity, which I co-chair with former Social Security Commissioner Dorcas Hardy and former Senate majority leader Dick Armey, has helped develop legislation that would enable every worker to invest half of his or her payroll tax in a personal retirement account.</p>
<p>Our proposal wouldn't raise taxes. It would not cut Social Security benefits. And it lays out a serious plan for funding the transition using modest spending restraint and prudent federal borrowing.</p>
<p>Our calculations show that the debt incurred to reform the Social Security system would total about $1.8 trillion, reaching that peak amount only in 2028. After 2028, program surpluses would begin paying down the debt, which would be eliminated completely after 15 years. As a result, there would be zero increase in federal debt over the long term.</p>
<p>However, the deficit issue is only a part of the story. Other financial benefits of large personal retirement accounts are just as startling. The accounts we propose would essentially end Social Security's massive unfunded liability, estimated today at $10.5 trillion. Eliminating this liability would be the largest debt reduction in U.S. history.</p>
<p>As for taxes, personal retirement accounts would provide the largest tax cut in U.S. history as well. Our plan would immediately reduce the payroll tax by 6.2 percent for every worker, and over time that tax would move down to just 3 percent, providing a huge benefit for American workers and their families.</p>
<p>Unlike Social Security, Americans would have the choice to own and control their retirement investments. Every family can build a retirement nest egg for themselves and their loved ones, resulting in a monthly retirement payout of as much as $3,500, compared to the maximum $1,500 available today.</p>
<p>The truth about what to do to reform Social Security is as evident today as the need to cut marginal tax rates was to President Reagan in 1980. With Social Security reform — as with the Reagan tax cuts — what they call "radical" is really "right." What they call "dangerous" is just "desperately needed." Let's invest in a sound and prosperous future for all Americans.</p>
<p>Kemp, a former congressman and GOP vice-presidential candidate, is the co-director of Empower America and co-chairman of the Alliance for Retirement Prosperity, 1775 Pennsylvania Avenue NW, 11th Floor, Washington, D.C. 20006.</p>

<p>WASHINGTON - (KRT) - Ralph Nader, the independent candidate for president, and Howard Dean, a former Democratic hopeful, sparred in a 90-minute debate Friday as Dean relentlessly repeated that a vote for Nader is a vote for President Bush.</p>
<p>Dean's appearance in the debate, sponsored by National Public Radio, was part of an unofficial stop-Nader movement that's now gearing up in state after state as Democrats try to keep Nader off the ballot.</p>
<p>Nader, who wanted exposure for his progressive causes, accused Democrats of a "smear" effort in Arizona, where an orchestrated Democratic challenge forced the Nader campaign to abandon getting on the ballot.</p>
<p>But with Nader's strength ranging from 3 percent to 6 percent nationally in what pollsters predict will be a close election, Democrats aren't taking any chances.</p>
<p>Nader isn't on the ballot in any state. The viability of his candidacy will rise or fall in the next 60 days as deadlines approach in more than 40 states that require voter signatures to qualify for a place on the November ballot.</p>
<p>In the debate, Dean reinforced Democrats' growing belief that Nader could cost Democratic nominee John Kerry the election the way many contend Nader cost Vice President Al Gore a victory in 2000. In that contest, Nader was the Green Party nominee; he's not this year.</p>
<p>"I am desperate to send George Bush back to Crawford, Texas," Dean told the audience at the National Press Club. He said he considered the political situation a "national emergency" and stressed that he rejected the idea of a third-party bid for himself after losing the Democratic nomination because he thought it would help elect Bush.</p>
<p>"We're going to get on enough ballots," Nader told an audience member worried about throwing away her vote. Richard Winger, the editor of the Ballot Access News newsletter, predicted that Nader could still be on as many as 45 state ballots.</p>
<p>Although the Green Party declined to endorse Nader in June, he has the support of the Reform Party with ballot lines in seven states. Nader, ever the contrarian, has said he will qualify on his own.</p>
<p>Winger, a veteran third-party watcher, said that the growing effort by Democrats to stop Nader, and by Republicans to help him, was unprecedented. "It's definitely more intense than ever before in history," Winger said.</p>
<p>Just two weeks ago in Oregon, Republican and Democratic groups converged at a Nader convention designed to gather 1,000 registered Oregonian voters to sign a petition so Nader could be on the November presidential ballot.</p>
<p>Democrats filled seats and decided as a bloc not to sign Nader's petition. In contrast, the conservative Oregon Family Council and the Citizens For a Sound Economy, co-chaired by former House Majority Leader Dick Armey, R-Texas, encouraged their members to attend the convention and to sign the petitions.</p>
<p>StopNader.com, a group organizing the Democrats' tactics and legal challenges to Nader petitions, is behind much of the state activity.</p>
<p>"We've been helping local organizations to make sure Mr. Nader follows all the rules before he gets on the ballot," said Michael Frisby, StopNader.com's communications director. "A lot of lessons were learned from four years ago."</p>
<p>The Oregon's secretary of state hasn't ruled on the petitions yet.</p>
<p>In Michigan, state Democratic Party officials called a news conference Thursday to accuse Republicans of helping Nader collect enough of the 31,776 signatures he needs by July 15 to qualify for Michigan `s ballot.</p>
<p>Democrats have been particularly upset over Republican contributions to the Nader campaign. StopNader.com calculated from Federal Election Commission records for May that GOP contributors make up 10 percent of Nader's major donors.</p>
<p>In the debate, Dean told Nader that he was being "disingenuous" about the impact of his campaign when Nader said his independent bid would draw more from Republicans than Democrats.</p>
<p>"I ask you not to turn your back on your own legacy," said Dean, who disavowed any effort to deny Nader ballot lines.</p>
<p>Nader defended his right to run and mocked Dean's pro-Kerry positions as "Howard Dean, the Second" and a big change from Dean's once-antagonistic relationship with Kerry.</p>
<p>At times, the debate's terse exchanges were surprising because Nader, the consumer activist turned anti-corporate crusader, and Dean, the former Vermont governor turned antiwar activist, share so many views.</p>
<p>"We need more choices," said Nader. "We need more voices."</p>
<p>---</p>
<p>© 2004, Knight Ridder/Tribune Information Services.
</p>

<p>WASHINGTON _ New spending on the war against terrorism is adding to worries about the long-term financial health of Social Security.</p>
<p> The concern threatens to distract a White House commission on Social Security created by President Bush to weigh options for reforming the Social Security program. The panel strongly favors allowing individuals to invest a portion of their Social Security payroll tax in stocks and bonds.</p>
<p> A projected $52 billion budget surplus that would have provided a cushion for the Social Security program was pared last week to a $10 billion deficit, due largely to tax cuts and lower projected tax revenue. The full costs of President Bush's economic stimulus and terrorism recovery packages have yet to be added in.</p>
<p> At a Social Security panel meeting on Thursday, co-chair Richard Parsons, chief operating officer of AOL-Time Warner, said neither terrorism nor other "day-to-day" crises should affect the commission's final recommendations, which are due this fall.</p>
<p> Peter Orszag, senior fellow for economic studies at the Brookings Institution, a Washington, D.C. think tank, and others, said the revenue shortfall will inevitably make it harder to win public support for privatizing Social Security.</p>
<p> "The easiest way to finance contributions to private accounts is to leave the current structure alone and use the general revenue (surplus) money," said Orszag. "But now there's no money left."</p>
<p> Social Security is the nation's largest benefits program and will pay out about $400 billion this year to about 45.4 million people.</p>
<p> The pending retirement of 79 million baby boomers born between 1946 and 1964 and declining tax revenues from a shrinking workforce have already combined to place the program in jeopardy.</p>
<p> Government officials estimate that beginning in 2016, the program will be paying out more in benefits than it takes in from payroll taxes. It is projected to be insolvent by 2038.</p>
<p> Because of the new budget deficit, the commission will have to lean more heavily on benefit reductions to finance any privatization plan, said Hans Riemer, chairman of the 2030 Center, a Washington, D.C. public policy organization focused on young adults. That "will send opposition to the plan through the roof," Riemer said.</p>
<p> Paul Beckner, president of Citizens for a Sound Economy, a fiscally conservative advocacy group, said new federal spending "could lead to serious problems for Social Security." But Beckner, a proponent of privatizing, concluded that "if people were allowed to own their own retirement through personal retirement accounts, the insolvency of the Social Security system would not even be an issue."</p>
<p> Without reforms, benefits would have to be cut or payroll taxes increased in order to keep the program afloat. But neither proposal has broad political or public support.</p>
<p> President Bush and the 16 commission members he picked strongly favor private accounts invested in stocks and bonds _ over Social Security payments, which are invested more conservatively in Treasury bonds.</p>
<p> Privatization critics say the system would drain high-income workers from the current program leaving moderate and low-income workers to fund it.</p>
<p> Orszag of Brookings said that given the unappealing choices and harsh economic climate, it may be wise to defer the commission's report and commendations beyond their fall due date.</p>
<p> With the country focused on fighting terrorism, "no one's really going to pay much attention to it," Orszag said.</p>
<p> ___</p>
<p> (c) 2001, Knight Ridder/Tribune Information Services.</p>
<p>JOURNAL-CODE: WA
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