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PANEL ON HEALTH, RETIREMENT TAKES AIM AT SS TO REMEDY IMBALANCES

SHARE PANEL ON HEALTH, RETIREMENT TAKES AIM AT SS TO REMEDY IMBALANCES

The staff of the committee appointed by President Clinton to remedy imbalances in the government's health and retirement programs proposed on Monday three possible solutions that all involve the politically unmentionable subject of Social Security.

One option would be to raise the retirement age to 70; another would accelerate previously scheduled increases to lift the retirement age to 67, and a third would raise the threshold for full benefits to age 68 in a way that the full effect would be felt only by people 40 years old or younger. The third option would also reduce benefits for the more affluent.But it is not certain that the bipartisan, 32-member commission itself will accept any of these possible solutions in preparing its report for the president by Dec. 15. Sen. Bob Kerrey, D-Neb., and Sen. John C. Danforth, R-Mo., the two heads of the panel, are expected to produce their own package of recommendations this Friday.

The commission's interim report in August concluded that current budgetary imbalances would mean that Medicare, Medicaid and Social Security would consume entirely the federal budget by 2029 if the system were not changed.

The staff put forward three "sample" packages for long-term solvency, reflecting what it called three differing philosophical approaches. The first was the no tax increase solution, the second was a "minimum benefit reduction" approach and the third a blend relying on both.

Plan three, which would be the least politically unpalatable, would raise health-care premiums and deductibles, bring state and local workers presently exempt into the Social Security system, and deny 25 percent of itemized deductions and tax entitlements like Social Security at a 50 percent rate for families with incomes above $32,000 and at an 85 percent rate for those with incomes above $44,000.

The commission is scheduled to meet in open session on Friday to formally receive these and other possible proposals, and on Dec. 14 it will conduct its final meeting before going out of business at the end of the year. Danforth and Kerrey are trying to muster the needed 20 votes to recommend one specific package to the president, a prospect that remains uncertain.