Opposition Developing To Bush Plan On Safety Net

By Ori Nir

Published January 14, 2005, issue of January 14, 2005.
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WASHINGTON — With President Bush set to unveil his plan to overhaul Social Security, several key Jewish organizations are expressing opposition to any significant changes in the system and are gearing up for what they describe as a major fight to protect the nation’s chief safety net.

But while most Jewish groups oppose the president’s plans in principle, some of the most powerful and visible groups are expected to stay out of the fight for fear of angering the administration or alienating key donors. As a result, some insiders suggest, the effect of widespread Jewish opposition might be diluted, creating the appearance of a community that is divided on the issue.

Most Jewish groups eyeing the issue say they oppose any cuts in benefits. The Reform synagogue movement, the National Council of Jewish Women, B’nai B’rith and Hadassah also are opposing what is expected to be a cornerstone of the Bush plan: the use of Social Security funds to create private personal savings accounts. The Rabbinical Assembly, the main union of Conservative rabbis, is all but certain to take a similar position when it meets in March for its annual conference, said the organization’s executive vice president, Rabbi Joel Meyers.

Other organizations opposed to cuts in benefits are waiting for Bush to unveil his plan before weighing in on the idea of private accounts. Among the groups withholding judgment on the issue of private accounts are United Jewish Communities, which represents the Jewish community’s chief network of social-service providers, and the Jewish Council on Public Affairs, a consultative group that brings together 123 local community relations councils and 13 national Jewish agencies to address public policy issues.

“Increasingly, we are seeing Jewish communities saying that confronting poverty is fundamental for their well-being. The most successful anti-poverty program in the history of the United States is Social Security,” said Hannah Rosenthal, the JCPA’s executive director. “We don’t want to see that success story in any way jeopardized,” she added. “Any attempt to improve [Social Security] would have to make it better at reducing poverty.”

The national debate over Social Security is expected to put several organizations in a difficult bind, particularly the UJC, the national roof body of local Jewish charitable federations. Sources familiar with the debate among UJC leaders on the issue said that the organization is facing a serious dilemma. On the one hand, with federations operating a vast network of retirement homes and programs aimed at helping the elderly, the UJC system has a strong interest in opposing any changes to Social Security that might result in reductions in benefits to retirees. On the other hand, it has an interest in avoiding a confrontation with the Bush administration, since many of its biggest donors are close to the president, and federations receive large grants from the federal government to fund social services.

UJC officials are refusing to discuss any issue relating to Social Security prior to their January 16 meeting, when the organization is expected to set its public-policy priorities for 2005. The Forward has learned that UJC leaders are expected to adopt a platform opposing “any legislation that would diminish the ability of the Social Security Trust Funds to pay old-age, survivors, and disability benefits” and supporting “measures to strengthen the Trust Funds.” But, sources said, the organization is unlikely to directly address private accounts or the administration’s reported intention to propose changing the calculation of benefits from a formula based on average wages in the marketplace to one based on inflation.

The Orthodox Union is likely to stay out of the debate, according to the head of its Washington office, Nathan Diament. Officials at the American Jewish Congress and American Jewish Committee said that they would decide whether to join the debate on Social Security once the White House officially releases its plan.

Bush is expected to unveil his plan in his State of the Union Address on February 2, and then launch a comprehensive campaign to generate public support for the overhaul proposal. Details of the plan are still under discussion, sources said, because of disagreements within Bush’s Republican Party.

The White House is poised to offer an ambitious plan, which will go beyond a proposal for modest privatization, according to a January 5 internal memo by the president’s director of strategic initiatives, Peter Wehner. In his memo, which was leaked to the media, Wehner offered “our latest thinking (not for attribution) on Social Security reform.” He called the reform plan “one of the most important conservative undertakings of modern times,” and added, “If we succeed in reforming Social Security, it will rank as one of the most significant conservative governing achievements ever.”

In addition to pursuing Personal Retirement Accounts, according to the memo, “we’re going to take a very close look at changing the way benefits are calculated. As you probably know, under current law, benefits are calculated by a ‘wage index’ — but because wages grow faster than inflation, so do Social Security benefits. If we don’t address this aspect of the current system, we’ll face serious economic risks.”

Such a change, however, also will entail political risks, as several senior Republican politicians have reportedly cautioned the White House.

Letting workers divert some of their payroll taxes from the Social Security system into personal investment accounts is seen by GOP strategists as a potentially popular way to give participants a much better rate of return on their investment than Social Security does. But a reduction in benefits is very unpopular and might strengthen Democrats, some Republicans caution.

The extent to which Jewish organizations weigh in will depend on the percentage of benefits that the administration will propose to privatize and on the extent to which it will push a change in how Social Security benefits are indexed, according to several officials with Jewish groups.

Opposition in the Jewish community will be strong, Meyers predicted, if Bush pushes a proposal that would “open up all kinds of possibilities for not having the money available when people retire.” At that point, said Marc Pelavin, associate director of the Religious Action Center of Reform Judaism, “we will have to decide not just what we are opposing, but what it is that we are in favor of, as well.”

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