A Finale in Three-Part Harmony

The most important and least surprising conclusion to the work of President Bush's Social Security commission was nowhere and everywhere in the final report the panel approved today: overhauling the retirement system is so complicated, painful and politically sensitive that it is almost impossible to get a consensus.

That was true in this case even though the commission's 16 members were handpicked by the White House for their support of the president's call to add personal investment accounts to Social Security.

Rather than rallying behind a single comprehensive plan, the panel, with Mr. Bush's blessing and encouragement, put forward three proposals that would allow workers to invest varying portions of their payroll taxes in stocks and bonds. It is up to Congress and the president, members of the commission said, to make the tough decisions about choosing among the approaches, apportioning the associated benefit cuts and coming up with the trillions of dollars necessary to put Social Security on a sound footing for the long run.

The difficulty of reaching a consensus on Social Security is even more pronounced in Congress, where Republicans remain terrified of the issue and Democrats are eager to exploit it for political purposes. And it will be a very tall order when it comes to the general public, which is intrigued by investment accounts but leery of any changes to a system that has worked well for 66 years.

"The criticism is fair," said Representative Jim Kolbe, Republican of Arizona, one of the leading advocates of taking painful steps now to deal with Social Security's problems.

"Initially we did think the commission would come up with something more comprehensive and a single recommendation," he said. "But it's unfair to say they punted. They said there's a very significant structural problem with Social Security that can only be fixed with significant structural reforms, and all their proposals do have some variation of a personal account in them."

If the commission achieved anything, it was to make sure that personal accounts, which a few years ago were supported by a few investment firms and free-market research groups but almost no one else, gain a prominent place in what seems certain to be years of additional debate about how to prepare Social Security for the aging of the population.

"This is the first time a national panel appointed by a president has proposed that Americans acquire wealth as part of social insurance," said Daniel Patrick Moynihan, the former Democratic senator from New York, the commission's co- chairman.

The commission's report made clear that it is possible to create personal investment accounts within the retirement system, and at the same time improve Social Security's long term financial condition. The question is, at what cost? The best answer the commission could come up with was a combination of reductions in currently scheduled guaranteed benefits and large infusions of general government revenue.

The commission disclosed today that it would probably take $2 trillion to $3 trillion of new revenue to shore up the system for 75 years, money that could only come from increased borrowing, higher taxes or spending cuts in other programs.

"This is the mother of all magic asterisks," said Peter R. Orszag, an economist at the Brookings Institution, the liberal-leaning research group, referring to how the government would have to come up with the money.

He said the need for the additional revenue confirmed what critics of the administration have been saying all year, that Mr. Bush's tax cut took off the table money needed for other uses, including Social Security. The administration has already said it expects budget deficits for at least the next several years, and some analysts say the deficits could continue through the decade.

"Given the tax cut, the slowing economy and the associated security costs of the war on terrorism, there's no money left in the non-Social Security budget," Mr. Orszag said.

Knowing that Democrats will hammer them in campaign commercials next year for trading cuts in the guaranteed Social Security benefit for the uncertainty of investing in the stock market, many Republicans are hoping to tuck the commission's report away for the next 12 months.

It is unclear whether the White House will heed their request that the issue disappear for a while. Mr. Bush seems genuinely convinced that the issue is a winner, especially among younger voters who are comfortable with investing and willing to take a long view of Wall Street's ups and downs. The commission's other co-chairman, Richard D. Parsons, who was named last week to be the next chief executive of AOL Time Warner, said Mr. Bush had assured him he would highlight the issue in his state of the union address.

Mr. Kolbe said Republicans will do better to engage on the issue rather than to run away.

"The Democrats are going to hammer us on it anyhow," he said. "Putting your head down in a bunker won't save you. We've got to be able to explain what we're doing and why we're doing it. The president is going to have to lead the debate in the next year during the Congressional elections."

President Bill Clinton tried much the same thing a few years ago. And even though he was careful not to tie himself to any one position, the issue was so divisive that he put it on the back burner.

It is not clear that Mr. Bush, whose commission has painted a big target on his back, will have any greater success.