White House Opposes Latest Soc Sec Proposal

July 30, 2001 (PLANSPONSOR.com) - President Bush is opposing a new Social Security proposal that would create investment accounts by cutting benefits and taxing more income.

The proposal by Representatives Jim Kolbe, (R-Arizona) and Charles Stenholm, (D-Texas), would create investment accounts for all workers, financed in part by benefit cuts.

In addition, the bill would:

· raise the level taxable earnings
· reduce cost-of-living adjustments
· speed up the scheduled increase in retirement age

The Kolbe-Stenholm proposal would also:

· allow workers to invest 3% of their first $10,000 of earnings and 2% of remaining taxable earnings into a personal account
· supplement accounts for low-income workers, with the government matching 50% of those workers’ contributions
· allow workers to choose a private investment company once an account balance reached $7,500.

The White House supports the idea of private accounts and has appointed a commission to investigate the matter and make recommendations, however the president opposes increasing payroll taxes and cutting benefits to retirees for this purpose.