Bush Urges Tiered Benefits; Workers Reassured They Won't 'Retire into Poverty'

The Washington Times (Washington, DC), April 29, 2005 | Go to article overview

Bush Urges Tiered Benefits; Workers Reassured They Won't 'Retire into Poverty'


Byline: Joseph Curl, THE WASHINGTON TIMES

President Bush last night proposed increasing Social Security benefits for low-income retirees more quickly than payments to "people who are better off," but said current workers can "count on a benefit equal to or higher than today's seniors."

"If you work hard and pay into Social Security your entire life, you will not retire into poverty," the president said at the hourlong, prime-time press conference.

Mr. Bush also said he had "no magic wand" to reduce gas prices and instead offered "longer-term projects," such as spurring development of alternative energy sources at home.

And Mr. Bush warned that North Korean President Kim Jong-il - whom he called "a dangerous person" - had to be presumed to be working on the capability "to deliver a nuclear weapon."

"We don't know if he can or not, but I think it's best when you're dealing with a tyrant like Kim Jong-il to assume he can," the president said.

Offering his first details on his plan to shore up the federal retirement entitlement program, the president said he favored indexing future increases in Social Security benefits, thus giving larger increases to the poor and smaller ones to the wealthy.

He declared that his new proposals for reform "would solve most of the funding challenges facing Social Security. A variety of options are available to solve the rest of the problem, and I will work with Congress on any good-faith proposal that does not raise the payroll tax rate or harm our economy."

But he left open the possibility that by pledging to keep future benefits "equal" to today's benefits, maintaining Social Security's solvency could require the coming wave of middle-class baby boom retirees to receive fewer benefits in later years than they would otherwise.

"In terms of the definition of ... whose benefits would rise faster and whose wouldn't, that's going to be part of the negotiating process" with Congress, Mr. Bush said. "The lower-income people's benefits would rise faster."

White House spokesman Scott McClellan said after the president's press conference that all retirees would continue to see their benefits rise.

"Under his approach, benefits would increase based on wages for lower-income workers and inflation for the wealthiest, and those in between would see their benefits go up on a sliding scale. That is the progressive-indexing approach," the spokesman said.

Mr. Bush referenced a plan by Robert Pozen, an investment manager and Democratic member of Mr. Bush's Social Security panel, who has suggested that Social Security no longer tie retiree benefit payments solely to wages - instead pegging them to prices, which historically rise slower than wages - for some retirees.

Senate Minority Leader Harry Reid criticized the president's plan even before it was revealed.

"Though the word 'progressive' may lead you to believe that this plan provides some progressive benefit for seniors, the truth is that this plan will provide deep benefit cuts for middle-class seniors," the Nevada senator said in a "prebuttal" statement.

"It is just another wrinkle in the bad privatization plan this president refuses to give up," he said. …

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Bush Urges Tiered Benefits; Workers Reassured They Won't 'Retire into Poverty'
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