Kolbe, Stenholm Defend Soc Sec Proposal

July 31, 2001 (PLANSPONSOR.com) - Proponents of new Social Security legislation, which aims to create personal investment accounts financed by cutting benefits and raising income taxes, urged critics to look at the entire plan instead of just the politically unpopular provisions.

Representatives Jim Kolbe (R-Arizona) and Charles Stenholm (D-Texas) told the House Ways and Means Social Security subcommittee that, while the costs of reform could be shifted, they could not be eliminated.

The proposal has drawn fire from leaders from both parties, specifically President George Bush, House Speaker Dennis Hastert (R-Illinois), and Minority Leader Dick Gephardt, (D-Missouri).

While the president is in favor of private accounts and had convened a White House commission to draft recommendations, he is adamant that benefits to retirees or people nearing retirement should not be reduced and payroll taxes not be increased.

Kolbe and Stenholm propose that, to pay for the private accounts:

  • benefits should be cut, especially those for middle- and upper-income workers
  • the level of taxable earnings should be raised
  • cost-of-living adjustments should be reduced
  • the schedule for raising the retirement age should be accelerated.