Senate Newcomer Leads Social Security Deal

WASHINGTON (AP) - If there is a deal to made on Social Security, the broker may be a little-known South Carolina Republican who has been in the Senate for just two years.

While seniority usually carries the day in Congress, Sen. Lindsey Graham has assembled a small group of Democrats and Republicans with the intention of producing what no one else has: a bipartisan bill to add personal retirement accounts to Social Security.

Graham is an unlikely dealmaker. He is not chairman of any committee. He is not even on the committee that will write the bill. And he is no moderate.

First in the House and now in the Senate, Graham has compiled a solidly conservative voting record. He took on a partisan task as one of the House managers who presented the case for the impeachment of President Clinton.

"I can't say I ever would have thought of him taking the lead on this issue," said Derrick Max, who heads a business-backed coalition that advocates the private accounts.

Supporters of such accounts agree they will need the endorsement of lawmakers from both parties to get the bill passed, particularly in the Senate.

So far, only a few Senate Democrats - Ben Nelson of Nebraska and Thomas Carper of Delaware - have indicated even a willingness to consider President Bush's idea of letting people create private accounts with some of their Social Security taxes.

Graham hopes to change that. He has won particular attention by breaking with Republican orthodoxy to suggest that part of the solution will involve raising taxes.

"Why should I expect someone in this job to be braver than I want to be?" he asked in an interview. "I'm asking both parties to sacrifice their ideology for the common good."

He is willing to criticize Bush, at least gently, for failing to offer a comprehensive plan for the retirement program. "It's a fair criticism of the president to say he's talking about personal accounts in isolation from the problems they present," Graham said.

The affable Graham, who speaks in a steady Southern twang, traces his interest in Social Security to his own family. His parents were of modest means, and when he was in college, they died, a year apart. At 13, his sister moved in with their aunt and uncle and was supported by Social Security survivor benefits through college.

Today, their aunt and uncle, now in their 70s, are retired, and their income comes from Social Security, a newspaper route and money Graham sends home to help out.

"I know first hand that we cannot let the system fail people who need it the most," he said.

Graham, 49, served 6 1/2 years on active duty as an Air Force lawyer before going into private law practice. He was elected to the House in 1994, when Newt Gingrich's GOP captured the House under the "Contract with America" campaign. When Sen. Strom Thurmond, R-S.C., retired after nearly a half-century in the Senate, Graham won his seat.

Graham became energized on Social Security during that 2002 Senate race when he was attacked for advocating private accounts. He won anyway and began working on a broad plan after taking office.

When Bush made Social Security his domestic priority for a second term, Graham was ready with a plan to create the accounts and fix Social Security's long-term finances - and he had ideas for how to get Democrats to join him.

Graham acknowledges that creating personal accounts does little to solve the program's long-term financial troubles.

Unlike Bush, the senator talks about the need to cut benefits, though he wants to soften the blow for older people on low income. But what has drawn the attention of policy-makers is Graham's suggestion that higher taxes help cover the cost of the transition to private accounts.

Under the current system, Social Security taxes are paid on only the first $90,000 of income. Graham suggests raising that cap, perhaps to $200,000, to make up some of the money that personal accounts would drain from the system. At the current Social Security tax rate of 6.2 percent, a $200,000 cap would mean someone with that income would be paying an additional $6,820 a year in taxes.

"I'm not designing a bill that will make Republicans jump up and down about me," Graham said.

Overall, Graham's ideas are squarely Republican. He firmly agrees with Bush that workers should have the ability to divert some of their payroll taxes into private accounts for investment in stocks and bonds.

Graham believes he can win Democratic support by structuring private accounts responsibly, protecting the poor and avoiding putting the government a trillion dollars more in debt to pay for transition to the new system.

"Eventually, we're going to have to pay for something," he said. "If I can get bipartisan support we're off to the races."

No Democrat has signed onto his legislation, but several keep coming back to Graham's behind-the-scenes meetings.

"He's playing an important role," Sen. Joe Lieberman, D-Conn., said last week as he headed to one of the sessions. "He seems to have the guts to make a proposal."

Added Sen. Max Baucus, D-Mont., the top Democrat on the Senate Finance Committee, which will write the legislation: "Anybody trying to get something together is playing a helpful role."

Other Democrats who have participated in the sessions include Sens. Blanche Lincoln of Arkansas, Nebraska's Nelson, Bill Nelson of Florida and Kent Conrad of North Dakota.

Also attending are two powerful Republicans - Iowa Sen. Charles Grassley, the Finance Committee chairman, and New Hampshire Sen. Judd Gregg, the Budget Committee chairman.

Even Republicans who dislike Graham's idea of raising the ceiling on Social Security taxes say his efforts are crucial to passing the bill.

"He's doing the hard work that it doesn't seem a lot of other members want to do," said Max, who heads the business-backed Alliance for Worker Retirement Security. "We're placing a lot of hope in his efforts."

Little Mr. Graham can take his "lifting the cap to $200K" and shove it where the sun don't shine.

First, it would impose a crushing blow to the economy.

Second, many high income employees - lawyers, engineers, scientists, etc., would just make a deal with their employer. They would quit their jobs, start a sub-chapter S corporation, sign a contract with their former employer, take a $50K salary and the rest in dividends - on which they pay no FICA.

Third, it is Marxist.

fine......but I look at "mavericks" as those that go against the grain all the time.......I don't see him doing this at all.......and you are only speculating about his motives.......you dont' know for sure that he is an opportunist and no, being for conservative principles per se in not necessarily the party line but on the other hand, I'm willing to listen to others views regardless of party. Sometimes the best break throughs in history have come from those that brought ideas outside the lines.....I"m always willing to listen......I may not agree, but I'll listen

"Recall that Clinton actually proposed personal accounts as a means of "saving Social Security". However, in his model, it was the Washington bureaucrats and politicians who would decide how (and where) the money was to be invested."

Hmmmmmm ... I didn't really understand the x42's plan.
But ...
Couldn't/wouldn't the gov't 'fund' become (sooner rather than later?) enough to eliminate SS taxes entirely?

Or am I being naively idealistic?

Synopsizing;
Govt takes money and invests it's entirety
said 'fund' grows to point where SS taxes are no longer neccesary,
wage earner has already been 'allowed' to 'privatize'
True retirement incomes are realized.

but I look at "mavericks" as those that go against the grain all the time

Well then tell that to the press. They've dubbed McCain a maverick and he plays both sides of the aisle.

and you are only speculating about his motives.......you dont' know for sure that he is an opportunist

And you are giving him the benefit of the doubt that he is sincere, you don't know that for sure either. I'll stand by my assessment. You can stand by yours.

being for conservative principles per se in not necessarily the party line

No, nor did I ever say it was. Hence disagreement over immigration.

I'm willing to listen to others views regardless of party.

Right...

His idea is pretty simple. Make the citizens pay for the politicians in Washington stealing money that didn't belong to them in the first place. No. I fully acknowledge fixing S.S. will require some pain but I'm not going to tolerate further taxes that they will just abuse the way they did the money originally earmarked for Social security. It's a bad idea that will backfire on the American people, the administration, and conservatives in general. The only ones that will benefit are the Dems and the Reps LIKE Graham that are trying to make this reality.

I am not changing my opinion on Graham or this scheme.

As long as higher payroll taxes go to Personal Retirement Accounts, I think its a reasonable trade-off. The money saved is ours to keep, which the government can never take away. We'd be at least see our taxes put away for tomorrow, instead of being spent for today. So I'll willing to consider breaking with the no tax increase orthodoxy in exchange for a larger goal - weening us from complete dependency on the Ponzi Scheme called Social Security. Whether the Democrats are willing to make a deal is an open question. At least they can't claim we aren't willing to pay for it or that we want to add to the deficit.

Denny Crane: "There are two places to find the truth. First God and then Fox News."

Couldn't/wouldn't the gov't 'fund' become (sooner rather than later?) enough to eliminate SS taxes entirely?

I suppose it's theoretically possible. The gummint could build enough equity in the sum to a.) fund the forthcoming shortfall with the profits and b.) return the principal to the taxpayers, then c.) let Social Security "wither on the vine", to coin a phrase.

The problem I would have with that is that, if it is the gummint's stated intention to undertake this approach, then it is also they who should have the responsibility for the investment decisions. They can't assign that responsibility to anybody else because, then, there would be no accountability.

And letting the government make those investment decisions would be a gold-plated invitation to corruption and abuse.

As it now is with Social Security and personal accounts, the ideal would be to eventually incrementalize our way to 100% of the tax being in "personal accounts". At that point, the government can begin stepping away from the whole issue and we can become responsible for our own affairs.

Go ahead...raise the cap.

As a business owner and physician, I'm here to tell you that I will do whatever necessary to NOT pay the increase out of my pocket...even if that means I have to fire employees to recoup the difference, or look at every other legal means of ensuring my investment in the business is protected.

I've had it with the socialist BS...I already take care of seniors for $0.20 on the dollar, and pay enough in SS taxes now.

According to AP, Graham said:

Graham suggests raising that cap, perhaps to $200,000, to make up some of the money that personal accounts would drain from the system. At the current Social Security tax rate of 6.2 percent, a $200,000 cap would mean someone with that income would be paying an additional $6,820 a year in taxes.

1. I question anything from AP.
2. Most of the $6,820 goes to keep the SS slush fund of the politicians up to the level at which they have grown accustomed.
3. This sounds a lot like class warfare (it's for the common good - it takes a village - they've got more, they should pay more, etc.).

I am over 55. I do not even come close to approaching the $90,000 plateau currently used. I do think citizens under 55 should have the right to choose a plan like the one Congress and government employees have been under for many years.

I have no problem with someone who goes against the party line but I do have a problem with someone who goes against the principals that they say they're for. People respect others honesty, even if they don't agree with them. Sen Graham is my senator and he will lose my vote on his election for this. No I'm not going to vote for the democrats, couldn't live with myself.

Here's an idea for you and your cohorts in Washington, Senator Graham. Quit dipping so deeply into the "locked box" to fund pork barrel projects and failed programs. The IOUs for wasting our money need to stop.

The problem is that the IOUs are no good. There is no bank account, savings fund, from which the IOU will be paid. The money was taken from the "locked box" and spent. The only place the IOU can be paid from is from our taxes in some future year. The game our senators and representatives have been playing is that "some future year" should be delayed as long as possible, so someone else gets the blame when the box is opened and found to be empty.

Or should I say the box is full of chits?

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