While not endorsing the plan of Rep. Paul Ryan (R.-Wis.) to rescue Social Security by allowing workers to invest 6.4 points of their 12.4% Social Security payroll tax in personal retirement accounts (PRAs), the White House praised the plan this week and acknowledged that the chief actuary for the Social Security Administration had determined that the large personal accounts in Ryan’s plan would in fact make Social Security solvent. This was in sharp contrast to testimony White House Budget Director Josh Bolten gave last month before the House Budget Committee. When pestered by liberal Rep. John Spratt (D.-S.C.) about whether PRAs can fix Social Security’s solvency problem, Bolten said: “I agree with you that the private accounts, the personal accounts, do not, in themselves, solve the full Social Security problem.” Meanwhile, President Bush has been barnstorming the country promoting PRAs just as an “add-on” to Social Security, rather than boldly referring to them as the way to fix the program. According to a July 19, 2004, report by Steve Goss, the chief actuary of Social Security, under the Ryan plan “the Social Security program would be expected to be solvent and to meet its benefit obligations throughout the long-range period 2003 through 2077 and beyond.” The plan would do this because workers in the future would be able to fund their own retirements out of PRAs instead out of government tax revenues. When asked about the Social Security chief actuary’s report by HUMAN EVENTS, White House spokesman Trent Duffy did not take issue with its conclusion. He said: “We’re not actuaries ourselves, so we would defer to the chief actuary’s office as to how [they] score the different plans.” “Congressman Ryan has an interesting plan and has proposed a real plan,” Duffy added. “This is a positive contrast to those who say there is no problem with Social Security and offer no plan of their own.” But Duffy would not put the administration’s official imprimatur on Ryan’s plan, saying: “It is not the White House’s place or the President’s position to be critiquing different plans.” Referring to another plan to save Social Security offered by Sen. Chuck Hagel (R.-Neb.), Duffy said Bush “wants members of Congress to propose different ideas for discussion. The more suggestions there are, the more they reflect the growing sentiment that there is a problem with Social Security.” (Interestingly, unlike Bush, Hagel rules out raising the cap on the level of income subject to the payroll tax, saying that would be a tax increase.) Asked when Bush will unveil specifics of his own PRA plan, Duffy said the timing “has yet to be determined.” He added that Bush is in “minute-by-minute discussions with members of Congress” and “will do what is necessary to get a bill that saves the system under his principles.” Conservatives have criticized many of the reform ideas floated so far by the White House, which have included not only lifting the income cap on payroll taxes, but also indexing benefits to prices rather than wages, raising the retirement age, and means-testing. But Duffy’s latest remarks about Ryan’s plan may give fresh hope to supporters of a reform firmly rooted in the President’s vision of an ownership society.
White House acknowledges Actuary's fiscal analysis