WASHINGTON -- Social Security is expected to feature prominently in President Clinton's State of the Union address Jan. 19.
Mr. Clinton also is expected to emphasize the need to encourage more employers to offer retirement plans to their workers.
Both initiatives are viewed as key as millions of Americans approach retirement age in the next decade.
In last year's speech, Mr. Clinton challenged Republican lawmakers to set aside the federal budget surplus for Social Security before offering tax cuts.
(In fact, Republicans offered a tax cut proposal last year, but it did not make much headway in Congress. In recent days, Republican leaders have claimed Mr. Clinton spent a portion of last year's federal budget surplus on new spending initiatives, rather than saving it all for securing Social Security.)
This year, Mr. Clinton, undergoing an impeachment trial in the Senate, is likely to ask lawmakers not to squander the opportunity to fix the financially ailing Social Security system.
Washington observers agree this is the last opportunity for lawmakers to craft a rescue package for Social Security.
They expect little will get done next year, with presidential elections in November traditionally cutting short the legislative calendar.
At the same time, Mr. Clinton is not expected to put his own blueprint for a rescue on the table, although he might broadly define the principles for Social Security reform.
Some experts suggest it would be too risky for Mr. Clinton to present his plan because doing so could alienate some Senate lawmakers, whose votes could be key in the impeachment trial.
"One can interpret principles as outlying parameters of what is acceptable -- it's got to do this and this, and so implicitly can't do this and this," said Brian H. Graff, executive director of the Arlington, Va.-based American Society of Pension Actuaries.
Mr. Clinton also might ask Republican lawmakers to set aside partisan differences and move ahead on overhauling Social Security, an issue expected to have an enormous impact on the retirement of the huge baby boom generation.
The president might even mention that administration officials already begun working with the Republican majority to map a bailout plan, sources say.
Mr. Clinton also might affirm the need for bolstering returns on the Social Security trust fund, without endorsing the concept of investing part of it in the stock market, sources say.
Mr. Clinton also is likely to mention a need to create incentives for small employers to offer retirement plans in warm, fuzzy, broad-brush strokes, sources say.
"I understand the plan is for him to say something" without getting into specifics about how the administration might help promote traditional pension plans among small businesses.
One way to do so is to lift caps on salaries employers can take into account when calculating pensions, and contributions they might make to pension plans, noted Ann L. Combs, principal in the Washington office of William M. Mercer Inc.
Although David Strauss, executive director of the Pension Benefit Guaranty Corp., was not available to discuss whether Mr. Clinton would back his efforts to reinvent traditional pension plans, some observers say Mr. Strauss privately has been pushing hard for the inclusion of his ideas in the state of the union address.
Mr. Strauss has said there is an urgent need to clarify the rules for hybrid pension plans, to let defined benefit plans incorporate features of 401(k) type plans and to allow for partial retirement.
The Clinton administration launched a major effort last year to promote streamlined defined benefit pension plans among small businesses, but those efforts went nowhere, with Congress distracted by Mr. Clinton's personal affairs.
There's also a good chance Mr. Clinton might refer to efforts to allow workers to count prolonged leave taken for family emergencies toward pension eligibility, a proposal announced at a White House conference on women's retirement last fall, and also to ensure women receive equitable retirement benefits, said Frank B. McArdle, manager of the Washington office of Hewitt Associates LLC.
"The legislative agenda for 1999 is relatively full in the area of employee benefits and Social Security, and the president's state of the union address will reflect that, notwithstanding the debate over impeachment," Mr. McArdle predicted.
