Presidency by Hugh Sidey: Assaulted from All Sides

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Spurred by rising Social Security costs and doubts about the system's future, growing numbers of church, school, hospital and municipal groups have been pulling out of the Social Security system and patronizing less expensive private pension plans; if they all withdrew, Social Security would lose a potential $18 billion in revenue. As of last fall, 456 hospitals and 399 nonprofits of other kinds had notified the Social Security Administration, which requires two years' advance warning, of their intention to forgo coverage; between 1950 and 1981, only 159 such organizations had dropped out. From 1975 to 1981, however, 606 state and local governments, employing 145,000 workers, left the Social Security system; at the end of 1982, about 100 more units withdrew and 387 had given notice that they would terminate in 1983 and 1984. Total employees affected: 242,000, including 55,000 from Los Angeles County alone, accounting for $140 million in lost revenue to the Social Security system. According to some legal scholars the proposed ban on withdrawals in effect imposes a federal tax on states, a possible violation of the Tenth Amendment to the Constitution, protecting states' rights. Proponents of reform expect stiff court tests on this point.

Among the politicians, battles may flare over two partisan provisions that seek to alleviate the $1.6 trillion Social Security deficit projected over the next 75 years: a Republican-endorsed proposal to raise the retirement age from 65 to 66 after the year 2000, and a Democrat-endorsed plan to increase the payroll tax by .46% in 2010, bringing it to 8.11% at that time. The most formidable opposition to the proposed reforms may come from Republican Senators Jesse Helms of North Carolina, Steve Symms of Idaho and Nancy Kassebaum of Kansas. They have joined forces with fellow Republicans, Senator William Armstrong of Colorado, chairman of the Social Security Subcommittee, and Representative Bill Archer of Texas, two of the three commission members who voted against the final plan. The coalition opposes the agreement's tax hikes and levies on benefits. Armstrong, who has filibustered on lesser issues, denies that he will attempt to talk the reform bill to death. "I don't want to kill it. I want to improve it."

Despite all the nibbling and posturing, however, the commission package appears to have a good chance of surviving Congress. Admits Armstrong: "The odds don't favor victory for the opposition." Democratic Representative Claude Pepper of Florida, 82, chairman of the House Rules Committee and a key commission member, summed up his support this way: "While the compromise is not to my liking, it is better than throwing Social Security into the whirlpool." —By Susan Tifft. Reported by Jeanne Saddler and Evan Thomas/Washington