The leading House bill to overhaul Social Security would marginally extend the program's solvency, but it would add $851 billion to the national debt over 11 years, according to an analysis released Friday by the system's chief actuary.

The bill calls for establishing personal retirement accounts for workers under age 55 and stocking them with Treasury bonds equal to the surplus Social Security taxes the government will collect each year through 2016. Next year alone the program expects to receive $84.5 billion more in payroll taxes than it needs for monthly benefit checks.

Currently such money is spent on other government programs or budget priorities, including tax cuts or funding for the war in Iraq.

While the bill's Republican sponsors describe the legislation as "stopping the raid on Social Security" taxes, it would allow Congress to continue spending the surplus money through 2009, to ease the financial transition. At that time, a new central administrative authority would be empowered to expand the ways the money can be invested, as well as to propose an alternate means of financing the accounts.

That has prompted accusations by Democrats of duplicative accounting, as well as criticism that the accounts are merely a backdoor attempt to establish the private accounts favored by President Bush. Those accounts would be financed with a direct diversion of payroll taxes, not just surplus funds. So far the Bush plan has received a lukewarm reception both from the public and members of Congress.

Posted by: Jonathan Singer / 4:29 PM | Basie! Home