Bush Puts SS Cap On Table

President Won't Rule Out Tax Increase For Those Making Over $90K

(CBS/AP)  President Bush says he has not ruled out raising taxes on those who earn more than $90,000 a year to help bolster Social Security's finances.

Under the current system, payroll taxes are paid only on the first $90,000 in wages. Mr. Bush has repeatedly said that he opposes raising taxes, but his advisers have been intentionally vague about whether he would also rule out subjecting a greater share of pay to the existing tax.

Asked directly, Mr. Bush said that he would not rule out raising that cap, though he does not want to see the payroll tax rate go up. The rate is now 12.4 percent of pay, split between workers and employers.

"The one thing I'm not open-minded about is raising the payroll tax rate. And all the other issues go on the table," Mr. Bush told a roundtable of regional newspapers, according to an account Wednesday in the New Haven (Conn.) Register.

The story was published as Mr. Bush, returning to the road Wednesday to push his campaign for Social Security overhaul, used a populist-style appeal here to sell his idea of personal accounts to independent-minded New Hampshire.

Some have suggested that taxing a greater share of earnings would be a good way to either help bring the system into long-term solvency, or to help pay for the transition to private investment accounts that Mr. Bush is pushing.

White House spokesman Trent Duffy said the president will consider this option along with many others proposed. "Just because he said it was an option doesn't mean he embraced it," he added. Mr. Bush made the comments in the interview on Tuesday.

This was the ninth state President Bush has visited since his State of the Union address two weeks ago to make the case that Social Security is headed for financial trouble, reports CBS News White House Correspondent Mark Knoller.

The president said he's determined to get Congress to fix the problem with a solution that includes personal retirement accounts.

"I'm going to continue pressing this issue and pressing this issue and pressing this issue untill we get something done," Mr. Bush said.

His latest campaign-style event took him to the home turf of GOP Rep. Jeb Bradley, who said during his fist run for Congress in 2002 that "privatization is not the answer" to Social Security's problems.

Though Mr. Bush heaped praise on scores of local politicians, from the state's two Republican senators on down, he did not mention Bradley.

"You don't have to worry about your senators. They're people who understand we have got to address the problem," he said, conspicuously omitting Bradley.

On the eve of the president's trip, the Democratic National Committee called on Mr. Bush to release the details of his Social Security proposal.

But the White House has said the aim now is to sell Americans on the idea that there is an immediate problem, even though the system doesn't run out of money for decades, in hopes that they will put pressure on their representatives in Washington — like Bradley — to get behind the plan.

Bush aides say the time for the legislative nitty-gritty of writing bills and negotiating with lawmakers will come after this intense public relations phase.

The president wants to make certain that workers age 55 and over understand that their Social Security benefits will not change under his proposal for private accounts. Political advisers see that as crucial, especially to protect Republicans who fear that Democrats will use their tangling with the popular retirement benefit against them in the 2006 midterm elections.

The president portrayed his plan as both good for the Social Security system and as a crucial step in building ownership for more Americans. But he did not mention that investing in stocks and bonds means workers with private accounts risk seeing their assets shrink, nor did he talk about lower benefits or the enormous transition costs of the accounts, estimated in the trillions of dollars.

He did acknowledge that the private accounts "don't fix the system."

Under estimates prepared by the Social Security Administration, the program's trust funds will begin to pay out more in benefits than they receive in payroll tax revenue beginning in 2018. By 2042, the trust funds will be empty and, under law, benefits will have to start being cut for all beneficiaries as a result.