MSNBC Hardball - Transcript

MSNBC Hardball - Transcript
Wednesday, June 22, 2005

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GREGORY: It's not just the Democrats. In a blow to the White House, Republicans are now pulling away from the president, reflecting the public's opposition to Mr. Bush's plan.

House Republicans outlined a plan today that would create private accounts using surplus revenue, not payroll taxes. Bottom line, the accounts would only be temporary, far less than Mr. Bush wants. Key Senate Republicans, too, going their own way. Bennett of Utah has put forward a plan without savings accounts at all, dealing only with the program's long-term solvency. He said, after meeting with the president yesterday, Mr. Bush encouraged him to move forward.

SEN. ROBERT BENNETT (R), UTAH: We have a lot of hope that we can use this bill to break the logjam and move forward on Social Security.

GREGORY: Former Democratic Senator John Breaux says the president should acknowledge defeat.

JOHN BREAUX (D), FORMER U.S. SENATOR: My exit strategy would consist of saying, look, I tried very hard to do what I think is necessary and essential. But if Congress is not ready to accept my recommendation, I'm willing to look at something that is not quite as good.

(END VIDEOTAPE)

GREGORY: Senator Robert Bennett of Utah joins us now here in the studio.

Senator, welcome.

BENNETT: My pleasure.

GREGORY: You just heard Former Senator Breaux, your former colleague, who said, look, the president has given this a good shot here, but it is time for an exit strategy. He needs to tell the American people: I tried. I can't get private accounts through, but we should do something.

Is it time for an exit strategy for the Bush administration?

BENNETT: I don't know what the president feels about that. And I won't try to speak for the president. I will speak for myself. I think it is time to get this issue moving again. It seemed to be dead in the water. The Democrats were saying, it will not move as long as there are personal accounts. I said fine. I will take personal accounts out of my bill. Put it forward and see if I get any Democratic sponsors.

GREGORY: Your bill, no personal accounts.

BENNETT: That's correct.

GREGORY: No personal private accounts. You just deal with the solvency issue.

BENNETT: Right.

GREGORY: Slowing down benefits for the future.

BENNETT: Right.

GREGORY: How does it work?

BENNETT: Well, there are two ways that we deal with it. Number one is what I call blended indexing. And this gets a little technical.

But, right now, your official benefit is calculated entirely on the basis of wage inflation. There are some people who say it should be calculated entirely on the basis of price inflation. I say, let's blend the two, keeping the most generous benefits for the people at the bottom 30 percent and then gradually phase out to full price indexing for inflation for the people at the top.

GREGORY: All right, the bottom line, to put that into English, is that you will slow down benefits for some.

BENNETT: For some.

GREGORY: For higher-income Americans.

BENNETT: Right.

GREGORY: Higher-income retirees.

BENNETT: Right.

GREGORY: And that's a way to ultimately help the solvency of the program.

BENNETT: Right.

GREGORY: Let me ask you a more basic question. Why is the president losing Republicans on Social Security?

BENNETT: Well, as the president has taken his case to the country, he's had two mountains to climb. He has successfully climbed the first one. He's having trouble with the second one.

The first mountain was convincing everybody there was a problem. Think back. January, February, the Democrats were all saying, there's no problem. Social Security is in great shape. Now, what is it, 80 percent of Americans recognize there is a problem. So, the debate is taking place on the top of the first mountain. And the second mountain the president has to climb is: My idea about personal accounts is the way to fix it.

He hasn't been able to climb the second mountain. I'm coming and saying, as long as we're on top of the first, let's find another way to get to the top of the second.

GREGORY: But, Senator, that doesn't quite answer the question, which is, we know Democrats are opposed to private accounts.

BENNETT: Right.

GREGORY: For a host of reasons.

BENNETT: Right.

GREGORY: Philosophical, political.

BENNETT: Right.

GREGORY: Oppositional.

BENNETT: Right.

GREGORY: Etcetera.

BENNETT: Right.

GREGORY: His own party is bucking him on this in the House and in the Senate. Why is he losing Republicans on Social Security reform?

BENNETT: I think if we were to have a straight partisan vote in the Senate, he would probably get 51 votes for private accounts. I'm in favor of personal accounts.

But we legislate at the highest level at which we can attain a majority. And on this issue, a majority is 60. So, I am abandoning it simply because I think we ought to get something going.

GREGORY: Do you think you can get Democrats on board with this plan? In some ways, you would like to get them on the record and say, let's get into the game here; let's start negotiating.

BENNETT: Yes. Well, we'll see. I've had conversations with a number of Democrats. I will keep the confidentiality-confidentiality of those conversations. A number have said to me, we like your approach. It was actually originally put forward by a Democrat. We think this is the thing to do.

I've said OK. Now you'll have the opportunity. We'll see in the next week whether any of them come forward.

GREGORY: I spoke to White House officials who said the president is not backing down at all from private accounts.

BENNETT: I think that's probably correct.

GREGORY: Not yet. You talked to him yesterday.

BENNETT: Yes.

GREGORY: He said, go ahead. Senator, go ahead with your bill that doesn't include private accounts.

BENNETT: Yes.

(CROSSTALK)

GREGORY: Isn't that a shift?

BENNETT: No. No.

GREGORY: Were you surprised that he said go ahead, that he blessed the idea?

BENNETT: No, because the president has always said to Republicans, bring forward your ideas. Let's have a variety of ideas on the table.

And my attitude towards blended indexing is, frankly, exactly the same as the president. He has endorsed it.

(CROSSTALK)

GREGORY: But that-and that's-and that's fine.

BENNETT: Yes.

GREGORY: And that may be a good idea, although there are some in the White House who wonder if there is even enough support for progressive indexing, for this idea of benefits cuts over time, which is what we're talking about.

BENNETT: Yes.

GREGORY: Is there even support for that?

BENNETT: Well, as I say, I've talked to a number of Democrats. I find there is support for that. They look at it and say this is the logical way out of the problem.

Back again to my main point. The first thing is president had to do, which he has successfully done, is convince the majority of Americans that there is a problem. So, now the question is, how do we deal with it? and I find there are some Democrats, at least privately, willing to say to me, your way of dealing with it makes more sense than some of the others we've seen.

GREGORY: You're convinced, are you, that Social Security reform in 2005, 2006, or even in the balance of the Bush second term, will not include private accounts?

BENNETT: Oh, I don't want to predict the future that hard. Right now, there are not the votes there for personal accounts.

GREGORY: Not this year.

BENNETT: Not this year. There may be next year. The political landscape may change. I am going to introduce the second bill that has personal accounts in it.

But I'm separating the two to give the opportunity to my Democratic friends who say, I like your proposal, but I could never go for personal accounts. I say, OK. I hear you. I will separate the two bills. And I will come forward with a bill. And right now, I think that's the thing that has the best chance of passage.

GREGORY: The debate continues.

Senator Robert Bennett, thank you very much for joining us.

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