CLINTON HINTS AT SOCIAL SECURITY LIMITS, TAXES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, January 30, 1993                   TAG: 9301300089
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: From Knight-Ridder/Tribune and The Baltimore Sun
DATELINE: WASHINGTON                                LENGTH: Medium
CLINTON HINTS AT SOCIAL SECURITY LIMITS, TAXES
President Clinton's hint that he may propose limiting Social Security benefits is threatening to ignite a new firestorm that could be more intense than the dispute over gays in the military.
Despite fierce opposition from Senate leaders and the powerful senior citizens lobby, Clinton aides refused Friday to disavow a proposal to delay or reduce the annual cost-of-living increases for the nation's 41 million Social Security recipients.
The proposal is a possible element in the plan being developed by Clinton to reduce the looming federal budget deficit.
Also, it appears increasingly likely that Clinton will call for higher taxes on Social Security benefits received by the 8 million Americans who have outside incomes.
Although raising taxes on Social Security would spark an immediate outcry from the influential advocates for elderly Americans, it holds the dual appeal of fitting Clinton's theme of balanced sacrifice while also offering a substantial source of new revenue.
Social Security recipients who draw more than $25,000 a year in outside income - or $32,000 for a couple - now pay income taxes on 50 percent of the Social Security payments they receive. If the amount of the benefits subject to taxation is raised to 85 percent, the government would collect an additional $6 billion in taxes a year, according to the Congressional Budget Office.
Because Social Security benefits are considered untouchable politically, congressional Democrats contend that Clinton either is being courageous or reckless by suggesting that benefits might be limited.
The average Social Security payment of $653 a month is scheduled to go up 3 percent, or nearly $20, next Jan. 3, according to Congressional Budget Office figures. Delaying the increase for one year would save the Treasury $5 billion in fiscal year 1994 and $8 billion in 1995.
Total Social Security payments now cost the government $302 billion, but Social Security taxes more than pay for the program.
This year Social Security is predicted to run a $53 billion surplus, which is used to partially offset the total budget deficit - estimated to be $310 billion in 1993.
Senate leaders from Clinton's own party dumped on the idea of delaying the cost-of-living increase immediately after the administration floated it in an article in the Wall Street Journal on Thursday.
Senate Finance Committee chairman Daniel Patrick Moynihan, D-N.Y.; Budget Committee Chairman James Sasser, D-Tenn.; and Banking Committee Chairman Donald Riegle, D-Mich., trumpeted their opposition.
Moynihan's position is key because any legislation changing the federal retirement system has to go through his committee.

by Bhavesh Jinadra by CNB