Republicans are pushing to rewrite budget rules in an attempt to remove financial obstacles that threaten the GOP’s effort to reform Social Security.
The potential move to craft budget language that would direct the Congressional Budget Office to score Social Security reform legislation over 30 or more years would likely increase the chances that the bill would pass in the 109th Congress.
Republicans could also write budget provisions that would remove the program entirely from the budget process.
Reshaping Social Security, deemed the third rail of politics, has long been viewed as an almost impossible task. But with the deficit projected to be $348 billion and the large transition costs of Social Security reform, the legislative obstacles appear even more daunting next year.
In a recent interview with The Hill, AARP President and CEO Bill Novelli said, “I don’t think Congress could ever pass [a private-account Social Security plan] because they don’t have the money to pay for it.”
The transition costs of Social Security reform, which is likely to entail personal savings accounts, could total up to $2 trillion in the short run.
Reform advocates — including Reps. Paul Ryan (R-Wis.) and Clay Shaw (R-Fla.), several Senate and House aides and Club for Growth President Stephen Moore — said traditional pricing, or scoring, of spending items was unsuited for Social Security reform.
Instead of assigning a five- or 10-year price tag, as Congress normally does, supporters of reform say Social Security should be viewed in the context of a 30-, 40- or 75-year budget window that takes into account the program’s impact over a lifetime.
“To look at this in short segments is shortsighted,” said Shaw, who is outgoing chairman of the Ways and Means subcommittee on Social Security. “You need to look at the overall liquidity of Social Security over a long period of time.”
A key GOP Senate aide said the looming Social Security debate — which President Bush has promised will be a centerpiece of his second term — had generated a closely related conversation about the budget process.
“That’s a big debate going on right now: How do you account for the short-term transition issues, costs, today, while somehow recognizing that there’s a long-term benefit?” the aide said. “The administration is working on its budget. I’m sure that the House and Senate Budget committees are certainly thinking about it. This is something that everybody is thinking about. How do we fairly and accurately view Social Security reform in a budget context?”
Proponents of revamping Social Security maintain that, unlike other measures, which generally become more expensive as the years drag on, Social Security reform grows less costly and, ultimately, generates a surplus.
Sen. John Sununu (R-N.H.) projected that his Social Security Savings Act, introduced in September, would lead to “permanent and growing surpluses” by 2030 while eliminating the program’s $10.5 trillion debt.
Shaw said traditional scoring made no sense when it comes to entitlement programs that affect many generations of taxpayers.
“Social Security should not be scored that way,” he said. “It should be separated out of the budget.”
Ryan said: “It’s almost impossible to score this within a 10-year budget window. … We’re talking about systemic change and actuarial soundness.”
The congressman added that “there are no set parameters within this debate” when it comes to scoring. Ryan’s bill would take Social Security out of the budget process, making it “off-budget.”
Democrats contend that Republicans are stirring up Armageddon-like fears of Social Security’s collapse to force privatization of a system that Democrats insist has helped alleviate poverty for three-quarters of a century.
Rep. Bob Matsui (D-Calif.), ranking member on the Ways and Means subcommittee on Social Security, said rewriting budget rules to expedite adoption of a reform bill would imperil the country’s finances for decades to come.
“I’ve never even contemplated that anyone would come up with an idea like this,” Matsui said. “The whole idea and purpose of a budget and expenditures and revenues is to have an accurate accounting of where the federal government is in terms of fiscal policy and in terms of the overall economy. To take off $2 trillion and to say it doesn’t really exist because it’s a future debt, it really distorts the whole budget process.”
Matsui also said that removing Social Security from the budget would make federal budgets “meaningless” for the next 25 to 30 years and would scare away many foreign investors and send jitters through Wall Street.
Republicans close to the budget process said they would try to provide members of Congress with as much information as possible about the short- and long-term costs of transforming Social Security.
Bringing Social Security reformers into line with the rules and regulations of the congressional budget process — and the senators and representatives who oversee the nation’s spending blueprint — may create some friction within the GOP, Republican sources said.
“It’s just a little too premature in the process to start determining how we’re going to score Social Security reform legislation,” said Cara Duckworth, Republican spokeswoman for the Senate Budget Committee.
Other Republicans involved in the reform effort said they were waiting for President Bush to take the lead in January. Once the president backs one of the four or five major bills floating around in Congress — or introduces his own proposal — congressional leaders will know how to proceed, GOP aides said.
Americans for Tax Reform President Grover Norquist, a well-known conservative activist with close ties to the White House, predicted the president would wind up supporting a plan close to that put forth by Sununu and Ryan. Norquist, like Moore, of the Club for Growth, has endorsed those proposals.
House Speaker J. Dennis Hastert (R-Ill.) last month expressed support for Ryan’s bill.