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To: LindyBill who wrote (93925)	1/5/2005 7:14:02 PM
From: LindyBill	Read Replies (1) \| Respond to of 793731

Bracing for Battle, Bush to Move Slowly on Social Security By Jeffrey H. Birnbaum Washington Post Staff Writer Wednesday, January 5, 2005; Page A06 The Bush administration, acknowledging the struggle it faces to overhaul the politically sensitive Social Security program, plans to build support with the public and lawmakers gradually and will not rush out a proposal of its own, senior administration officials said yesterday. The officials emphasized their go-slow approach as President Bush came under intense criticism from Democrats for considering a change in the formula that sets initial Social Security benefit levels that would reduce currently slated payments by nearly a third in the coming decades. The Washington Post reported yesterday that White House aides had discussed the proposal on Capitol Hill. House Minority Leader Nancy Pelosi (Calif.) was among several Democrats who attacked the suggestion. "This is the equivalent of forcing seniors today to live at a 1940s standard of living," she said. Administration officials, however, insisted that no decisions have been made. Senior Bush officials said that they intend to work over the next couple of months to lay the groundwork for an overhaul of the system and not to force a specific solution. They first want to make the case to the public that Social Security faces a serious threat and that fixing it now makes more sense than waiting. The exact form of the legislation will be a matter of negotiation with lawmakers of both parties, a process that is underway with congressional leaders, officials said. Except for the president's determination that personal investment accounts be included and that tax increases be excluded, the details of the legislation are pretty much up for grabs, the officials added. The president is not even wedded to making a detailed proposal himself and is open to allowing Congress to proceed without one. Late yesterday, the Treasury Department and the White House dismissed a report by the Associated Press that said the Bush administration was focusing on a Social Security proposal that would allow younger workers to invest as much as 4 percent of their payroll taxes in private accounts. "The president has laid out principles; he has not selected a plan," Treasury spokesman Robert S. Nichols said. "He has not made any decisions about a specific proposal." Such flexibility acknowledges how touchy Social Security is as an electoral issue. Despite near-constant assertions by experts that an overhaul is needed, broad-scale changes have not been enacted since the 1980s and were made then only because a bipartisan commission recommended alterations to fend off an impending crisis. On the president's second fiscal priority this year -- tax reform -- Bush officials predicted a far bolder approach. Bush is expected soon to appoint a task force that will suggest revisions to the federal income tax. The group will be asked to report by late summer and will be co-chaired by former senators John Breaux (D-La.) and Connie Mack (R-Fla.), both of whom were members of the tax-writing Senate Finance Committee. Senior administration officials predicted that the task force and the Treasury Department, which will work closely with the group, will choose a radical approach to making the tax code simpler and more pro-investment. Although completely replacing the income tax with a levy on sales is unlikely, the officials said that the proposed new system would move toward a "consumption income tax." In its purest form, income that is saved would not be taxed. In addition, investment by corporations could be written off quickly. Treasury would put its own stamp on the task force's recommendations, and the president would make the final decision, the officials said. Congressional action could begin late this year but more likely would get underway in 2006. © 2005 The Washington Post Company