Buck Passing on Social Security

A bipartisan unit finds the issue laced with political arsenic

A deal has been just about worked out. It could produce the $150 billion to $200 billion that the Social Security system needs to make sure that it can continue mailing checks on time to 36 million Americans through the 1980s. But, unfortunately, whether or not the deal will ever actually be struck has turned into a cliff-hanging suspense story.

Reason: the plan that is acceptable to most of the 15 members of the National Commission on Social Security Reform contains political arsenic in the form of hefty tax increases on young and middle-aged workers, combined with limits on the future benefits to be paid to aged pensioners. The commission does not want to recommend such politically unpalatable steps unless it can get some signal from President Reagan and Tip O'Neill, Speaker of the Democratic-controlled House, that they will support the findings. Commission Member William Armstrong, a Republican Senator from Colorado, explains: "If we come up with a solution that is not precleared with at least those two figures ... it will just get shot down about five minutes after we announce it."

But Reagan and O'Neill are playing coy. The President, who bridles at talk of tax increases, last week rejected a taunting suggestion from Kansas Republican Senator Robert Dole, another commission member, that Reagan is "frightened to death about Social Security." Still, Reagan declared, "We are waiting for the commission to come back and tell us, could they agree on a plan." O'Neill, who is loath to consider a limit on benefits, nonetheless has said that he will go along with one if the commission's Democrats* endorse it. But he too takes the position that the commission must issue recommendations on its own.

As a result, the commission is uncertain as to whether it will even meet again. Chairman Alan Greenspan, a Republican economist, had scheduled what was supposed to be the commission's final meeting for last Friday, but postponed it while he continued to negotiate with White House Chief of Staff James Baker. If Greenspan can get the Administration's imprimatur, and if O'Neill gives some kind of tacit nod, the panel can quickly reassemble and fashion a consensus plan.

If not, the commission, which must report by Dec. 31, will probably issue conflicting recommendations. Its Republicans will demand that Social Security's problems be solved primarily by limiting benefits; its Democrats will insist that tax increases be the principal solution. That in turn could set the stage for a chaotic battle in Congress next year, since the main Social Security trust fund will be unable to send out pension checks on time by next July. The day of reckoning can be put off by extending the fund's authority to borrow from the separate Medicare and disability trust funds, but then all three are likely to go broke together in 1984.

The real pity of a continuing deadlock would be that a sound proposal is so near.

Greenspan has won a remarkable measure of agreement from a commission whose members range from highly conservative to very liberal. The central features of the plan that most would buy are: 1) putting into effect by 1984 large increases in Social Security taxes that are now scheduled to be spread out through 1990; 2) delaying future benefit increases, which now are paid in July of every year, by three to six months; 3) tying those increases to the average rise in wages throughout the economy. At the present time, benefits are raised to equal any increase of 3% or more in the consumer price index. Since inflation has pushed benefits up much faster than wages, tax collections, which are keyed to wages, have been unable to cover the bill.

That package meets one test of a reasonable compromise: it is distasteful to everybody. Says Greenspan: "There is nobody on the commission who, in my judgment, would by themselves like to do that sort of solution." The latest poll for TIME by Yankelovich, Skelly & White (see following story) discloses the extent of public opposition to such painful steps. Respondents were 56% to 39% against slowing increases in Social Security benefits, and 65% to 28% against raising Social Security taxes. If a bipartisan agreement cannot be achieved by the commission, the prospects of reaching one later, as the presidential campaign gets under way in earnest, are anything but bright.

* Officially, the commission consists of eight Republicans and seven Democrats. But five of the Democrats regard the other two as closet Republicans. Those two: National Association of Manufacturers President Alexander B. Trowbridge and former Louisiana Congressman Joe D. Waggonner Jr.

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