Sen. Jim DeMint (R.-S.C.), author of a plan creating personal retirement accounts for Social Security, said Thursday he fears that without President Bush’s support for a specific reform proposal, Congress could end up with a compromise that raises taxes, cuts benefits and offers accounts so small in size they wouldn’t be an alternative to the existing system.
“I hope for him [Bush] to see more consensus in the Congress, so that he would come out with a bolder plan,” DeMint said at a Capitol Hill discussion sponsored by the Young America’s Foundation. “What is likely to happen without some boldness is we will come out with little accounts, little benefit cuts and little tax increases. That will spread the pain and give you a little account, but not an account that’s large enough that will grow to the point it replaces the dependency system.”
As a member of the House, DeMint introduced his proposal first in 2001 with the support of then-Majority Leader Dick Armey (R.-Tex.). It won of the backing of then-Rep. Lindsey Graham (R.-S.C.) during his successful Senate race in 2002, and with some minor tweaks, DeMint reintroduced the Social Security Savings Act in 2003. He used it as a centerpiece of his successful Senate campaign last year.
Although he has yet to offer the legislation in the Senate this year–he hopes to first secure a Democrat co-sponsor–DeMint said he has shared his thoughts with Bush, who traveled with him and Graham to South Carolina this week to speak about reforming Social Security.
When asked Thursday if Bush needed to offer a specific proposal, DeMint told HUMAN EVENTS: “The President probably does need to do it because the more I talk around here, I don’t think a lot of folks are going to get out in front until they have to because most of the political pressure is coming from don’t do anything.”
Personal accounts are a hallmark of DeMint’s plan, and he uses a progressive model to encourage investment. He would allow the lowest-earning workers to save up to 8% of their wages and limit the highest earners to 3%. On average, the accounts would equal about 5%, which is slightly smaller than the 6.4% accounts of the similar Ryan-Sununu bill but larger than the 4% accounts that Bush has suggested.
DeMint used Thursday’s gathering to firmly come out in opposition to add-on accounts, which have been floated as a potential compromise with Democrats. Conservatives expressed deep concern when White House chief economic adviser Allan Hubbard told USA Today last week the President was “willing to consider” the idea of add-on accounts.
“Some people are talking about add-ons, where you leave the current system alone, but they’ll give you the opportunity if you pay an extra percent, the government will match it. So it’s a new tax-and-spend program,” DeMint said. “You pay a little more tax and we spend a little more. I don’t like that idea.”