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From the March 2005 issue of Investment Advisor • Subscribe!
There is no shortage of legislation to reform Social Security, but for anything to pass it must have bipartisan support, Arizona Republican Congressman Jim Kolbe told attendees of the Cato Institute conference on retirement. Opposition is so fierce, said Rep. Paul Ryan (R-WI), that Democratic party leaders are threatening "retribution against members if they cooperate" with Republicans. President Bush has said he would not raise payroll taxes. But Treasury Secretary John Snow has said that raising the payroll tax ceiling, currently at $90,000, is on the table, according to Kent Smetters, an associate professor at the Wharton School of Business. "Getting a bipartisan package with a carve-out, and no increase in payroll taxes, would be very unlikely," says Dallas Salisbury, president of the Employee Benefit Research Institute. "Bush is saying, 'I insist that payroll taxes be reduced,'" notes Salisbury, "but if you reduce payroll taxes, you have to reduce benefits." --Melanie Waddell