WASHINGTON (AP) A co-chairman of President Bushs Social Security commission backed off calling the system broken, and members spent most of Tuesdays meeting defending their report to critics, dozens of whom were outside waving signs and chanting.
Co-chairman Richard Parsons, AOL Time Warner chief operating officer, said he went too far when he stated in the commissions preliminary report that the system was broken.
The real issue is the system wont work in perpetuity and is financially unsustainable in the future, he said.
As baby boomers start retiring, they will strain Social Security because fewer workers will be paying into the system. The report, approved Tuesday, says Social Security cannot meet its promise to future retirees without reducing benefits, increasing taxes or massive government borrowing, and that an overhaul of the system is needed. It also suggests that women and minorities would benefit more from private accounts than the current system.
The commission has been bombarded with criticism from many Democrats and their allies, including labor unions, even before it has completed its mission to recommend a plan to let younger workers invest a portion of their payroll taxes in private investment accounts. It plans to make that recommendation in the fall. Public hearings also will be held, starting next month.
Opponents have charged that the interim report manufactures a crisis to help sell the idea of private investment accounts.
The attempt is to frighten the American public into believing that the system is in such bad shape that we need a radical solution, said Rep. Robert Matsui, D-Calif., ranking Democrat on the House Ways and Means Social Security Subcommittee.
Opponents have mounted a campaign to discredit the panel, and demonstrated outside the Washington hotel where it was meeting. Rallies and other events also were held across the country.
The presidents commission has published a misleading, misguided report that is one of the most skewed documents I have seen in many, many years, said House Minority Leader Dick Gephardt, D-Mo.
Commissioners, frustrated with the criticism, said opponents should stop the bashing and help find solutions.
I would urge my fellow Democrats to lower the rhetoric, stop the kill the messenger strategy and focus on trying to address a very serious problem simply by calling out names, said Robert Johnson, chief executive officer of Black Entertainment Television.
Establishing when Social Security will be in trouble is one of the biggest debates.
The commission says 2016 is when the system will pay out more in benefits than it takes in from payroll taxes, draining the Social Security surplus. Commission members also argue that because the trust fund contains treasury bonds and not real money, the government will have to find the money to redeem the bonds to pay the benefits, which could mean tax increases or spending cuts.
But opponents say the trust fund was established for that reason to fund the future strain, and theres no reason for panic until 2038. Thats when Social Security is projected to go broke. Also, creating private investment accounts could mean that the trust fund would start being dissolved sooner than 2016, opponents argued.
The commissions opponents favor the do-nothing plan, said Robert Pozen, a Democratic commission member and vice chairman of Fidelity Investments. If you are against all change, this is the do-nothing plan.
Both sides also sparred over benefits to women and minorities.
This is about helping the people that need to be helped, said commissioner Mario Rodriguez, a Republican and Hispanic Business Roundtable president. This is not about helping the rich.
Commission members argued that the current system hurts women and minorities because their wages are often lower and they may not work for as many years. Private accounts would be owned and that money could be passed on to survivors.
But opponents said the commission is ignoring that Social Security is a progressive system that provides more benefits to lower earners, and that it also pays disability and survivors benefits, which tend to benefit women and minorities.
Presidents Commission to Strengthen Social Security: http://www.commtostrengthensocsec.gov/
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