Jockeying Under Way on Social Security

WASHINGTON – Lawmakers from around the nation are positioning themselves behind the scenes to become the face of Social Security reform, an issue that President Bush has labeled the priority of his second term.

Several potential 2008 presidential contenders are among the members of the House and Senate who could be catapulted by the issue to the status of household names. And as the president prepares to outline his proposal in next month’s State of the Union address, each is pushing his own view on how best to change the system.

A legislator’s name on a bill of such significance could help define a political career and fuel a presidential run, if it succeeds.

“One of the things that hurt Senator Kerry is that he didn’t have anything with his name on it,” a lobbyist who heads the Alliance for Worker Retirement Security, Derrick Max, said.

Of all lawmakers, perhaps Senator Graham of South Carolina has been most high-profile in positioning himself as the White House point man on the issue. During the campaign, he blanketed the talk-show circuit as a surrogate on the issue for the Bush-Cheney ticket. A longtime advocate of personal accounts, Mr. Graham has introduced a bill that Mr. Bush has commended.

His plan is among the most modest of the field – moving four percentage points of Social Security payroll taxes, up to a limit of $1,300 annually, into personal retirement accounts that employees would own and control. The first $10,000 would be invested in government-approved funds.

His plan is also among the most palatable to Democrats, as well as fiscally conservative Republicans, but it is still considered too costly and risky by critics.

Mr. Graham has not ruled out a run in 2008 and has made several appearances at Iowa political events this past year, feeding speculation that he will make a run.

“Lindsey Graham is front and center. He’s got a reform plan and he is articulate,” a Social Security specialist at the Heritage Foundation, David John, said.

He is also willing to say things “that make other Republicans wince – but builds credibility with Democrats,” Mr. John said of the South Carolinian.

Last month, Mr. Graham was quoted telling reporters in his home state, “I am willing to raise your taxes. I’m tired of kicking the can down the road.”

Among Mr. Graham’s rivals for the spotlight is his incoming junior colleague, Rep. Jim DeMint, who was elected to the seat from which Senator Hollings is retiring. Mr. DeMint introduced a bill in the House, a more far-reaching proposal that would allow workers to move 6.2 percentage points of their payroll taxes into individual accounts. It appealed to advocates who believe the biggest benefits will come with the biggest possible accounts.

Another potential 2008 presidential hopeful, Senator Hagel of Nebraska, has indicated that he plans to introduce his own Social Security bill.

And yet another colleague with perceived presidential ambitions, Senator Santorum of Pennsylvania, is viewed as potentially the most effective White House point man on the issue, in part because he has been a staunch supporter of accounts but does not have his own bill or a personal stake in a particular proposal.

“He has spoken out since his days in the House and has run two senatorial campaigns that talked about reform in a swing state – and lived to tell about it,” Mr. John said.

Another emissary the White House is likely to dispatch to sell the policy is Senator Dole of North Carolina, who has highlighted the issue in her Senate campaign and will be traveling nationwide in her new role as chairwoman of the Republicans’ Senate campaign operations for 2006.

“She knows the issue, is very bright, and polls well,” Mr. Max said. “She could tell a room of 80-year-old retirees, ‘We’re going to cut Social Security,’ and they’d still love her because she’s Elizabeth Dole.”

Many other Republican lawmakers are leery of, if not outright opposed to, private accounts, however, and at least some Democrats must back the reform for it to succeed. Republicans and lobbyists are hunting for cooperative faces across the aisle.

They are trying to appeal to Democrats by saying that the accounts would benefit low-income workers and racial minority groups who have lower life expectancies and may pay more into the system than they ever draw out, because they could bequeath them to their children.

“There is a strong left-of-center case for the accounts, but who is going to be the person who steps out of the box that Kerry and others have painted the party into?” a spokesman for the pro-account lobby group Citizens for a Sound Economy, Chris Kinnan, said.

“This is an opening for a Democrat who aspires to national prominence,” he said.

The presidential commission that studied Social Security and recommended offering other options, including personal accounts, had as co-chairman Senator Moynihan of New York, who was a Democrat.

Some supporters of the private accounts hold little hope for cooperation from Mr. Moynihan’s successor, Senator Clinton. She has been staking out centrist positions, and her husband favored a form of private accounts while he was in the White House, but Mrs. Clinton criticized private accounts in her Senate campaign.

Senator Schumer, who will take a seat on the powerful Finance Committee, has signaled that he is dubious of – but would not immediately oppose – personal accounts for Social Security. He has said he would oppose a plan that reduced benefits for current or future retirees – a reservation held by many legislators on both sides of the aisle.

Among the Democrats who have been supportive of accounts are out-going Senator Breaux of Louisiana, Rep. Charles Stenholm of Texas, and the former Nebraska Senator Kerrey, now the president of the New School University. All are expected to lobby from the sidelines.

Among Democrats currently serving in the House, attention is focusing on a young African-American congressman from Memphis, Harold Ford.

“He is very ambitious and a rising star. He favors individual accounts, and his involvement is going to be crucial,” the director of health and welfare studies at the Cato Institute, Michael Tanner, said.

Senator-elect Barack Obama of Illinois is also perceived as open to the cause, Mr. Tanner said.

Any proposal will also have to make its way through several powerful committees, including the House Ways and Means Committee, headed by William Thomas of California.

“Anything that takes place will have to involve Bill Thomas. He runs the committee with an iron hand. Anything that takes place will have his imprint,” Mr. Tanner said.

Another committee member, Jim Kolbe of Arizona, has his own bill and is viewed as being trusted by swing Democrats whose support may be necessary to get the bill through.

A member of the Social Security subcommittee, Rep. Sam Johnson of Texas, also has his own bill, which enjoys the support of 19 co-sponsors – the most so far. His bill would allow individuals to invest all of their individually paid payroll taxes into the accounts, and he would finance part of the transition costs by slowing the growth in benefits.

The senior Democrat on that committee, New York’s Rep. Charles Rangel, is against diverting Social Security money to private accounts and is expected to assume a leadership role among Democrats.

Another bill that proposes large accounts, financed by an across-the-board reduction of 1% in government spending, has been introduced by Rep. Paul Ryan of Wisconsin and Senator Sununu of New Hampshire.

“It is unlikely that either of those bills will become the final product,” Mr. Tanner said, but he predicted that the authors will take a public role on the issue.

The chairman of the Senate Finance Committee, Charles Grassley of Iowa, has not signaled what kind of reform he would like to see, but he will be a key figure in getting any proposal through the Senate.

Among the staunchest opponents of the accounts are Senator Corzine of New Jersey and Rep. Robert Matsui of California.

“Bob Matsui has been brilliant on this and other issues and is probably as strong an opponent as you will find,” the Heritage Foundation’s Mr. John said.

Democrats recently sent a letter to the president calling on him to outline the details of his proposal in his next budget. The letter did not use the word “privatization” and made supporters of the proposal cautiously optimistic that, whoever leads it, the debate will unfold in a tempered fashion.

“There has not been a groundswell of members flying off the handle, saying this is a nonstarter that will put seniors on cat food,” Mr. Max said. He added, “At least not so far.”