Bush Opens Door to Changes in His Plan

Even as he travels the country selling his Social Security overhaul, President Bush is beginning to acknowledge some of the constraints of his plan for individual accounts. He warns audiences they will not be able to just cash in their accounts when they retire. He says that the accounts may enhance retirement income for younger workers, but he admits they will not fix the ailing Social Security system over all.

March 23, 2005
Bush Opens Door to Changes in His Plan
By ANNE E. KORNBLUT

ALBUQUERQUE, March 22 - Even as he travels the country selling his Social Security overhaul, President Bush is beginning to acknowledge some of the constraints of his plan for individual accounts.

He warns audiences they will not be able to just cash in their accounts when they retire. He says that the accounts may enhance retirement income for younger workers, but he admits they will not fix the ailing Social Security system over all.

And at an event here on Tuesday, as he often does, Mr. Bush modestly described individual accounts as just one idea "people ought to seriously consider," rather than a nonnegotiable proposal. His comments, taken together, offer further evidence that the argument for individual accounts remains difficult, and that Mr. Bush may wind up accepting a plan different from the one he first outlined.

"I believe all ideas ought to be on the table," Mr. Bush said.

Even the slogan at the president's public events has changed. At the New Mexico event, gone were the banners that once declared the president's interest in "Strengthening Social Security."

Instead they had a more targeted message: "Keeping Our Promise to Seniors." His last several outings have been dedicated to reassuring older voters that their Social Security payments are not in jeopardy, rather than demanding the bold restructuring that was once the focus of his sales pitch.

He has visited centers for older Americans, interrupting residents' card games to repeat the promise. He has brought along his mother, Barbara Bush, to show he understands older people's concerns. And he has enlisted prominent Republicans including Vice President Dick Cheney and Senator John McCain of Arizona to help mollify what polls show to be substantial opposition among the elderly to his approach.

In the face of unusually solid opposition from many Democrats and even a significant number of Republicans, Mr. Bush is also taking care to explain the finer points of individual retirement accounts, some of which White House officials have glossed over in the past. His descriptions have grown increasingly technical, although Mr. Bush has not put forward the details of any plan.

In Tucson on Monday, Mr. Bush told the audience: "You can't liquidate your personal account when you retire. It's the interest off your personal account that will complement your Social Security check, no matter how big or little it is, that you're getting from the federal government. That's important to remember."

In Denver later that day, he cautioned that "when you retire, you can't pull all your money out." And in Albuquerque on Tuesday morning, Mr. Bush told the audience members that they "can't liquidate the plan upon retirement because it's a part of the retirement system."

"But your estate - you can leave it to whomever you want," he said. "You want to leave it to your daughter? Fine."

At that same stop, Mr. Bush made another admission that has cropped up more frequently in his speeches: that individual accounts will not help the cash flow problem set to occur within the Social Security system. His proposal, he said, is "not the way to fix the system."

"It's going to require other matters to fix the system," Mr. Bush said, describing individual accounts as simply "a way to make the system better for the individual worker." He made the same point - which skeptics about his proposals have been making for months - in his March 16 news conference, telling reporters that "personal accounts do not solve the issue."

"But personal accounts will make sure that individual workers get a better deal with whatever emerges as a Social Security solution," he said.

Critics argue that the accounts would make the Social Security system even less solvent than economists already project it will be in the decades ahead, diverting at least one-third of the current payroll tax away from the program.

The way Mr. Bush's approach has been described by White House officials, it would restrict what workers could do with the account upon retirement. Most workers would be required to use part of the money to buy an annuity, a lump-sum payment in exchange for a lower stream of annual income to make sure that retirees did not outlast their savings. Only the money left after buying the annuity would be available to pass on to inheritors.

On Tuesday, Mr. McCain traveled with Mr. Bush for a second straight day, and joined him in delivering a second message: that the United States is promoting freedom around the world. "The winds of change are blowing through the Middle East," Mr. McCain said. "Some of our European friends may be on the wrong side of history."

Mr. McCain's comments about the war in Iraq produced the only standing ovation at the event.

Unlike most other presidential appearances, the event inside the darkly lit Kiva Auditorium was sparsely attended, with hundreds of empty seats. Several participants joined the politicians onstage, including a 78-year-old retired teacher, Margaret Valdez, and her 24-year-old granddaughter, Jessica, who both support individual accounts. The older woman said she had appeared with Senator Pete V. Domenici, Republican of New Mexico, at a Social Security event before, suggesting that the performance was even more practiced than most.

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