[Reuters] Bush Retirement Accounts Plan Dead -- Top Democrat

Contradicts another story I read fwiw ...

Bush Retirement Accounts Plan Dead -- Top Democrat
Tue Feb 1, 2005 05:40 PM ET

By Donna Smith

WASHINGTON (Reuters) - The top Democrat in the Senate on Tuesday predicted that President Bush's plan to revamp social security by diverting taxes into private investment accounts would fail to pass Congress.

Senate Democratic Leader Harry Reid was speaking as Bush prepared to use his State of the Union address on Wednesday to argue for his proposals and then follow up with a five-state tour to campaign for the new investment accounts.

"President Bush should forget about privatizing Social Security," the Nevada Democrat said. "It will not happen. The sooner he comes to that realization, the better off we are."

Bush has yet to spell out details of his plan but hopes to build public support and win over some Democrats while shoring up support from his own Republicans who control Congress.

Without Democratic support, the plan will fail to win the 60 votes needed to overcome procedural hurdles which can block any major piece of legislation in the 100-member Senate.

Reid said none of the 44 Democrats in the Senate would back a plan that diverts Social Security taxes into accounts that workers would invest in stocks and bonds. Opponents argue it would only add to Social Security's financial problems, force big cuts in benefits and add to ballooning budget deficits.

But Bush and his supporters argue it will help preserve the retirement system for generations to come.

White House spokesman Scott McClellan said Bush wants bipartisan support and will talk about the problems facing Social Security as he travels Thursday and Friday to North Dakota, Montana, Nebraska, Arkansas and Florida.

"We hope that people will focus on solutions and what they're for, rather than trying to stand up and simply oppose things that they are against," McClellan said.

Bush hopes to build pressure on Democrats from Republican-leaning states. He faces an uphill battle. Sen. Max Baucus, a Montana Democrat and ranking Senate Finance Committee member, said he will not support diverting Social Security taxes into private accounts even though he plans to appear with Bush in Great Falls.

Bush also faces doubts among his own Republicans. Sen. Olympia Snowe, a Maine Republican, has said she would not support diverting Social Security taxes into private accounts.

Sen. George Voinovich, an Ohio Republican, said bipartisan support was essential for any Social Security changes and suggested lawmakers may not give Bush what he wants.

"When we finally work it all out, we may not agree with what he wants to do, but in the process of doing that we may agree on some things that will make that Social Security more reliable for the future," Voinovich told reporters.

An aging population and the baby boom generation retirement is expected to place increasing financial strains on Social Security as well as the Medicare elderly health care program.

By 2018 Social Security will begin paying out more in benefits than it collects in taxes and will start to draw on the trust fund, which consist entirely of U.S. government bonds. By 2042, the trust fund will be exhausted according to the program's trustees.