No 'Immediate Crisis' in Social Security, GAO Chief Testifies

From Associated Press

March 10, 2005

WASHINGTON — Social Security "does not face an immediate crisis," the head of the nonpartisan Government Accountability Office said Wednesday, but it does face a long-term financing problem.

David M. Walker, the comptroller general, criticized President Bush for undertaking an aggressive two-month tour to try to sell his plan for allowing younger workers to divert a portion of their Social Security payroll taxes into private investment accounts.

Walker suggested that Bush and members of Congress focus instead on improving financing for the program, which would not be significantly affected by establishment of personal accounts.

His testimony before the House Ways and Means Committee launched formal debate on Capitol Hill over Bush's push to overhaul the retirement plan.

The panel's chairman, Rep. Bill Thomas (R-Bakersfield), said in his remarks, "Clearly, the current program, because the American population has changed, is not sustainable based on the old method of financing."

Noting that Congress has not changed the program since 1983, the chairman also chided Democrats for opposing any potential cut in retiree benefits.

The trustees for the Social Security and Medicare trust funds are expected to release their 2005 report on the long-term financial outlook of government programs this month. Two trustees who appeared at the hearing, Thomas R. Saving of Texas and John L. Palmer of New York, said there had been no major changes in the program's demographics or financial outlook during the last year, but they joined Walker in urging action on long-term financing.

"Time is working against us," Walker said. "The sooner you act, the less dramatic the changes that have to be made."

New Republican polling data show "there is a rejection of the term 'crisis' as an accurate description of the state of the Social Security system, and this rejection increases in intensity as the respondents get older," according to a copy of a memo obtained by Associated Press.