Taxes on wealthy may fund pensions

WASHINGTON – Two of President Bush’s top advisers refused Sunday to rule out the possibility that wealthy people might have to pay more to help cover the cost of his move to partially privatize Social Security.

Neither Treasury Secretary John Snow nor Andy Card, the White House chief of staff, would say whether Bush’s ideas about overhauling the federal retirement program would include raising the limit on incomes subject to Social Security taxes.

People currently pay those taxes on income up to $87,900. That level will climb to $90,000 next year. One proposal to help compensate for the private accounts would raise or eliminate the tax cutoff, which would mean that wealthier people would pay more.

Asked on ABC’s “This Week” whether that was possible, Card said: “The rate that you and I pay, contribute, to our Social Security, the president does not want to see that rate increased.” He would not respond further in subsequent questioning.

Both Card and Snow, who appeared on “Fox News Sunday,” said Social Security is beyond repair as it now stands. They said details of a plan to overhaul it remain to be worked out.

Asked whether Bush’s ideas would remove guarantees of Social Security benefits to younger workers, Card said: “Under no one’s plan will younger workers receive benefits they’ve been promised because the Social Security system doesn’t have the financial underpinning, the foundation to support the expectations of social security 75 years from now, 50 years from now.”

Bush expects to present a plan to Congress in his budget proposals in February.

What has been laid out so far is that people retiring or near retirement would suffer no cuts in benefits, Social Security taxes would not go up and younger workers could opt into a 401(k) style private investment plan with part of their contributions.

Estimates of the costs run close to $2 trillion over 75 years; under current rules, Social Security would be spending more than it takes in by 2018.