WASHINGTON -- Social Security reform next year could be derailed by the volatile stock market, squabbles among Dem-ocrats and Republicans on how to fix the system's problems, and a vow by Rep. Robert Livingston to introduce legislation removing Social Security from the federal budget.
The promise by Mr. Livingston, R-La., the presumptive speaker of the House, could greatly complicate matters by instantly morphing the hefty federal budget surplus of $63 billion into a $30 billion or so deficit.
The conventional thinking has been that the Republicans' poor showing in this month's elections -- a loss of five House seats and no Senate gains -- could have cleared the way for President Clinton to make Social Security reform a part of his legacy.
The election results make impeachment of Mr. Clinton less likely, and make it more critical for Republicans to work with Democrats on crafting a bipartisan solution for Social Security before they can count on Democrats' cooperation in passing big tax cuts.
"If the economy is reasonable and the stock market is up, and President Clinton makes an explicit (Social Security) proposal, there's a 50% chance you will get Social Security reform," predicted Dallas L. Salisbury, president of the Employee Benefit Research Institute, Washington.
On the other hand, Mr. Livingston's attempt to clarify the government's accounting of Social Security income and expenditures is not likely to be popular with his colleagues because it would remove their chance to spread part of the federal budget surplus among their constituents.
Moreover, the election results reminded Republicans that Social Security is at the top of the list for voters, and it might be in their best interests to clear the issue off of the table before the presidential election in 2000.
"It has got to be done in 1999 or not at all," said Rep. Earl Pomeroy, D-N.D., the House Democrats' point man on the issue.
Already, Rep. Bill Archer, R-Texas, chairman of the House Ways and Means Committee, has scheduled a hearing on Social Security for Nov. 19, and President Clinton has announced a White House conference on the issue Dec. 8 and 9.
The spotlight on Social Security also could increase the chances of pension legislation, simply by making Americans more aware that the government-sponsored program alone is not going to be enough to ensure retirement security.
Dozens of pension bills, including comprehensive bipartisan legislation in the House and Senate, already have been debated in Congress, and could be piggybacked on either the Social Security legislation, or tax legislation, sources say.
Moreover, after a year of relative inactivity on retirement issues, the pressure is on lawmakers to deal with them, said Frank B. McArdle, manager of the Washington office of Hewitt Associates LLC.
"It's going to be a big Congress for retirement issues," said Janice Gregory, vice president of the ERISA Industry Committee, a Washington-based trade group representing large employers.
For starters, Congress could easily pass what Mr. Pomeroy calls "bite-sized," stand-alone pension legislation that would improve portability and encourage small businesses to set up pension plans. The legislation would cost the federal government virtually nothing in lost revenue, according to a Senate estimate.
Mr. Pomeroy, co-chair of the Joint Steering Committee on Retirement Security, who has a similar position on the Democratic Caucus Retirement Security Task Force, dreamed up both the Retirement Account Portability and Secure Assets for Employees acts.
POST-GINGRICH
What's more, the departure of Rep. Newt Gingrich, R-Ga., as speaker of the House gives committee chairmen greater power in drafting legislation. Mr. Livingston reportedly has told committee chairmen he intends to restore their traditional powers.
That also might elevate the powers of Rep. Nancy L. Johnson, R-Conn., chairwoman of the House Oversight Subcommittee that held several hearings on pension legislation last year. This year, Ms. Johnson, who works closely with Mr. Archer, outlined her ideas on pension legislation in an Oct. 20 memo to Mr. Archer.
"Action on reforming the private pension system should go in parallel with action to improve the Social Security system. Addressing one without the other would leave half the problem unsolved," Ms. Johnson wrote in the memo.
She recommended the 106th Congress pass many of the ideas contained in legislation introduced this year, including Mr. Pomeroy's bills, which were folded into a bigger pension bill, The Retirement Security for the 21st Century Act, this summer. Her memo also suggested the subcommittee examine new ideas for expanding pension coverage of low-paid workers in small businesses.
BILL REVIVAL
Other lawmakers likely to play a key role in pushing for pension legislation next year are Reps. Rob Portman, R-Ohio, and Ben Cardin, D-Md., the architects of the Retirement Security Act, who drafted pension simplification legislation in 1996 that was included in the Small Business Job Protection Act, and again in the Tax Relief Act of 1997.
Rep. Sam Gejdenson, D-Conn. -- who introduced legislation this year that would require small plan sponsors to ensure their assets are held by banks or other qualified financial institutions, and to tell participants how their retirement money is invested -- is expected to reintroduce that bill.
Also likely to maintain interest in retirement issues are Reps. Jim Kolbe, R-Ariz., who cosponsored Mr. Pomeroy's legislation this year; and Richard E. Neal, D-Mass., who cosponsored the Retirement Security Act of 1998, a comprehensive bill introduced by Democrats in the House and Senate in June.
In the Senate, Robert Graham, D-Fla., and Charles Grassley, R-Iowa, who in July introduced the Pension Coverage and Portability Act, are expected to reintroduce that bill.
Sen. Jeff Bingaman, D-N.M., who was appointed months ago to head the Democrats' Social Security task force, might reintroduce pension legislation that would make it easier for working Americans to transfer their pensions when switching jobs, his spokeswoman said.
