Another Snow Job:
Snow sees US Social Security legislation by summer
Thu Mar 31, 2005 02:33 PM ET
By Laura MacInnis
BISMARCK, N.D., March 31 (Reuters) - Treasury Secretary John Snow said on Thursday he expects the U.S. Congress to consider legislation on overhauling Social Security by the summer, after which the window of opportunity may start to close.
"This issue is now teed up, it's ready to be resolved," Snow told a group of business leaders at a breakfast meeting in Bismarck, North Dakota.
"By this summer we'll see legislation really starting to take shape that will lead to a permanent fix to this serious national problem," Snow told the group.
The Treasury chief is traveling to promote the Bush administration's plans to overhaul the Social Security system and allow younger workers to divert part of their payroll taxes to private retirement account.
Snow told the North Dakota group that if Congress delays acting on Social Security reforms until 2006, political wrangling around midterm elections would likely upend efforts.
"It's got to be done this year. This is the time to do it," he said.
Democrats and other critics have questioned the Bush administration's proposed private accounts, saying they will be costly to implement and will ultimately dismantle the Social Security system, which was created 70 years ago as a social safety net for senior citizens.
On Thursday, Snow said any new government borrowing needed to set up the private accounts would be relatively small "given the size of the capital markets of the United States and the world" and would be easily absorbed by the market.
Snow said last month that about $750 billion would need to be borrowed in just the first 10 years.
"The borrowing will not have an adverse affect on the financial markets of the United States," Snow said, adding Wall Street would welcome the personal accounts as a first step to fix Social Security's expected future shortfall.
"The financial markets realize that we are heading to a fiscally untenable situation for our country with the deficits that are going to be created by Social Security in the future," he said. "The borrowing here facilitates the resolution of a much bigger and more costly problem."
Republicans say the Social Security system lacks the funds needed to deal with the coming retirement of about 77 million baby boomers. Low birth rates among younger generations are also seen stretching the program, in which existing workers' payroll taxes pay for retirees' benefits.
Snow said that in addition to Social Security's deficits, the United States must also soon confront financing gaps in the government's Medicare and Medicaid health assistance programs.
"We can't stop at Social Security. We have an even bigger issue right behind us, and that's Medicare and Medicaid," he said. Snow said the Bush administration was working to bring down health costs, which have driven up spending in the programs, but was not yet ready to push a legislative remedy.
"We really understand Social Security. We don't really understand all the things we need to know on Medicare and Medicaid," he said. "We don't have the answer to all this yet, by any means." |
