House Panel Considers Individual Investment Accounts
STEVE INSKEEP, host:
This is MORNING EDITION from NPR News. I'm Steve Inskeep.
Today a powerful group of lawmakers begins moving toward its own proposals for changing Social Security. A House committee will listen to ideas from several witnesses, and that proceeding is being closely watched because it is the committee led by Republican Bill Thomas of California. NPR's Julie Rovner has reported on that congressman for years.
JULIE ROVNER reporting:
Bill Thomas is chairman of the House Ways and Means Committee, which is the most powerful committee in the House, which makes him the most powerful committee chairman. He's also a guy who, when he says he's going to move a bill, actually moves a bill. He tends to get his bills through the House. In the last couple of years he has gotten a Medicare bill enacted into law, he's shepherded the president's tax cut through. He's basically taken on very difficult bills and accomplished his tasks.
INSKEEP: Now that does not guarantee that Thomas will be able to overcome stiff opposition on Social Security. Democrats are united against President Bush's proposals to alter the program for retired Americans, and even a plan that passes the House could be stopped in the Senate. But Congressman Thomas says he hopes to find broader support by broadening the debate. Instead of just considering a shortfall in Social Security, he says he wants to consider the many sources of income for people who retire.
Representative BILL THOMAS (Republican, California): You used to work for one company. Twenty-five years later you got your pension and you got a gold watch. Today people work for a number of different companies. Sometimes they don't even vest in the old so-called defined benefits system. Frankly, aging Americans need a broader-based discussion across a wide range of retirement programs, and not this trench warfare over Social Security designed one way or the other. There are a number of ways that you can address the solvency of Social Security. There are a number of ways that you can address changes in the tax code and in the statutes dealing with pensions and personal savings that, hopefully, Democrats would want to engage in, because it's affecting a number of constituencies, not just those wholly dependent upon Social Security.
INSKEEP: Do you think that you can make enough changes in the technicalities of federal law so that people would rely less on Social Security?
Rep. THOMAS: No, not at all. What we need to do is examine those people who, through no fault of their own, don't have a company pension or don't have significant savings because they had to spend most of their money, as most of us do, on living during their lifetime. I applaud the president when he said no one who has only Social Security as retirement should retire in poverty. But for those who do have pensions and other revenues, does it make sense to require a payout to everybody equally in Social Security when they have other areas that, if you change the law, they would be much more appreciative because the other areas are where they're relying on most of their resources for retirement?
INSKEEP: In recent days President Bush has weighed in on this debate with a proposal suggesting that there could be progressive indexing of Social Security benefits--the more you make, the less you would get, future retirees. What do you think of that proposal?
Rep. THOMAS: Well, first of all, somebody needs to read the current Social Security statute. It's already progressive. The discussion is do you want to make it more progressive?
INSKEEP: And what do you think of that proposal?
Rep. THOMAS: I think it's worthy of consideration. We're holding a hearing today and we're having a broad spectrum of people who've suggested various ways to address Social Security solvency.
INSKEEP: Democrats have said in response to the president's plan that the way that he wants to index benefits, everybody making more than $20,000 a year would end up with less as future retirees than people end up with now. Is that accurate?
Rep. THOMAS: I don't know whether it's accurate or not. What I think we need to do is examine the fundamental question of fairness, and examine the question of someone who has spent their entire time working and their only retirement is Social Security. Then you examine others who have their own pension and they have their own personal savings and then you can ask: What would be reasonable or fair for them to receive out of Social Security? Because, frankly, someone who's relying on pensions or their private savings would be more interested in changes in other areas of the law than they would in the Social Security area.
INSKEEP: Will it be inevitable, given the shortage of money here you're talking about, that some Americans will have a harder retirement than they might have hoped?
Rep. THOMAS: No, because the changes you want to make in the pension area and in the personal savings area will enhance their ability, where the government is working as a positive supportive partner rather than punishing them, in planning in that area in their retirement, and therefore, changes you make in Social Security won't be that significant to them. They'll be overcome by the enhanced savings in other areas.
INSKEEP: Do you want, 50 years from now, Social Security to be as important a part of people's retirement as it is today?
Rep. THOMAS: It needs to be there, in my opinion, for the same reason it was there in the 1930s. There are some people who work all their lives who have only their own ability and the government's Social Security structure to assist them in retirement. That doesn't mean that smart Americans don't want their government to work with them in the future in terms of saving their money, being rewarded for putting off current consumption for future consumption and gratification, that they want to be able to take out of their working years a retirement program that fits their working pattern, which we should help build in a reasonable and responsible way.
INSKEEP: Congressman Bill Thomas is chairman of the House Ways and Means Committee, which makes him a key player in the debate over Social Security.
Congressman, thanks for your time.
Rep. THOMAS: Thank you, Steve.
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