Bush rules out tax hike to finance Social Security
WASHINGTON – President Bush on Thursday ruled out raising taxes to finance the centerpiece of his second-term domestic agenda: a Social Security overhaul to help the system survive an impending wave of retiring baby boomers.
Three years after his Social Security commission issued recommendations on how to repair the system, Bush remained noncommittal Thursday on how he would pay for the estimated $2 trillion cost of revamping Social Security. But vast new borrowing seemed increasingly likely.
“I will not prejudge any solution,” Bush said in the Oval Office after meeting with the Social Security trustees who submit an annual report on the state of the program’s funding. But he went on to say, “We will not raise payroll taxes to solve this problem.”
Bush reiterated a 2000 campaign pledge to let younger workers invest some of their payroll taxes in the stock market. Bush’s commission urged that younger Americans be allowed to place 1 to 4 percent of their income into a private account to be invested for retirement. Those who choose to have that percentage diverted would probably see a reduction in their regular Social Security check, administration officials said.
White House aides said Bush also remained committed to making no changes in benefits for those at or near retirement.
He sidestepped a reporter’s query about whether the nation can afford new, large-scale debt at a time when deficits have reached record levels. Before engaging in such questions, the public and Congress must grasp the problem, Bush said.
Polls show there is already high public awareness of the problem. Bush campaigned on the issue, and various governmental blue-ribbon panels, summits and commissions warned of the urgency of the problem in 1981, 1983, 1992, 1996, 1998 and 2001.
Nevertheless, Bush said, “I think it’s very important for the first step to be a common understanding of the size of the problem, and then for members of both parties, in both bodies, to come together, to come and listen to the options available.”
White House budget director Joshua Bolten said the cost of implementing Bush’s plans would not undercut Bush’s goal of cutting the deficit in half over the next five years.