WASHINGTON -- Republican Sen. Lindsey Graham of South Carolina startled the capital's conservative network last month with a speech on Social Security reform at the Heritage Foundation. His call for private accounts was sound conservative doctrine, but he proposed financing it with a huge payroll tax increase for upper bracket Americans. This was heresy, conservatives said, by Strom Thurmond's successor.
Graham responds this is the only way President Bush's priority reforms will be passed. He states two axioms his fellow conservatives will not address. First, Social Security -- the government's most popular program -- cannot be saved without "some sacrifice." Second, the personal accounts Republicans want cannot be passed without bipartisan cooperation -- meaning a high-profile Democratic co-sponsor.
Thus, Graham is proposing a bargain of historic proportions. To reform Social Security, each party must do something unthinkable. Democrats would have to swallow personal accounts declared anathema by the AARP, organized labor and every sector of the party. Republicans would have to go along with a tax increase falling heavily on the party's base.
Graham is a 49-year-old country trial lawyer just finishing his second year as a senator, but lack of seniority has not bothered him previously. Elected to Congress in the Republican sweep of 1994, he helped lead the coup that almost ousted Newt Gingrich as speaker of the House in 1997 and in fact fatally wounded him. Ever since his 2002 election to the Senate, he has been pressing Social Security reform, and he now has the ear of important White House aides.
On Nov. 18, Graham introduced a bill that looks, superficially, like other Republican proposals. Current Social Security beneficiaries and workers aged 55 and older would not be affected. Workers aged 54 and younger could set aside 4 percentage points of their 12.4 percent Social Security payroll tax for private accounts that they and their heirs would keep forever. The distinctive Graham twist is that workers "who don't want to take part in a modernized system" would be taxed at higher rates -- rising over the years.
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