January 24,2007

Baucus questions SSA nominee on privatization

Finance Chairman says any proposal for carve-out accounts still a ‘non-starter’

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.)
obtained a formal commitment from the President’s nominee to head the Social Security
Administration to “stay out” of any new debates over private accounts in the retirement
security program. In response to Baucus’s questions at a confirmation hearing today,
Michael J. Astrue said that he would serve as an “honest broker and supplier of
information” for Congress on Social Security issues. Baucus has indicated his
willingness to work together with the White House on Social Security issues, but says
that the American people have taken the idea of privatizing Social Security off the
negotiating table.

“The President has suggested private accounts [in Social Security], and that did not
really get very far in Congress or with American people. What are your thoughts
on private accounts?” Baucus asked. “I’m obviously interested in your personal
views, but I will advise you that I think it’s a nonstarter in any serious discussion to
find long-term solutions.”

“For me, I see the value in what I think is the consensus between the executive
branch and the legislative branch in having a very neutral commissioner who is an
honest broker and supplier of information,” said Astrue. “My intention is … to stay
out of that debate and I will honor that.”

A White House proposal to privatize Social Security would have diverted, or “carved
out,” payroll taxes from the benefit pool into private savings accounts. That plan would
have shortened Social Security’s ability to pay full benefits by 11 years, forced $5 trillion
in borrowing over 20 years, and caused deep cuts in benefits for future retirees. Baucus
said today that discussions on the future of Social Security must now focus on solutions
that will work without cutting benefits or raising taxes. He also said that Social Security
needs full administrative funding now, to function properly for beneficiaries and reduce
current backlogs. Currently, it can take as long as four years for Social Security
disability applicants to have their claims approved.

Astrue has been nominated for a six-year term as Social Security Commissioner. His
testimony, and a webcast of today’s hearing, can be found on the Finance Committee
website at http://finance.senate.gov/sitepages/hearings.htm. The Finance Committee is
expected to formally consider Astrue’s nomination in a business meeting next week.

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