Administration officials contend that any short-term harm from a big increase in deficit spending would be more than offset by long-term savings in the Social Security system. Independent financial experts do not necessarily disagree, but many warn that adding $1 trillion or more to government debt could be dangerous to the economy, so the details of any overhaul are of immense importance.
Under the current system, payroll taxes on today's workers pay for benefits to current retirees. Bush's plan would disrupt the cross-generation income transfer by letting workers put aside money for their own retirement. That would leave a big funding gap for retirees who depend on the current income-transfer system.
"There will be some upfront transition financing that will be needed to move toward a better system," McClellan said. "It's a savings over the long term."
Unanswered questions include how much money workers could divert from Social Security financing into their private investments, the precise transition costs and whether workers would be protected if their investments dramatically declined.
Congressional leaders, who remain wary of tampering with a bedrock government program that guarantees retirement income to some 45 million Americans, declined to step to the microphones after their late-afternoon meeting with Bush. They said Bush urged bipartisan cooperation on the issue but did not outline a legislative timetable or present details.
Despite their reluctance to talk yesterday, Democratic lawmakers are likely to give Bush strong opposition, while his fellow Republicans are expected to have mixed reactions.
"If the President has some ideas about trying to improve it, I'll talk to him," Sen. Harry Reid of Nevada, the incoming Senate Democratic leader said Sunday on NBC's Meet the Press. "But we are not going to let Wall Street hijack Social Security. It won't happen. They're trying to destroy Social Security."
The idea of increasing government debt to finance the transition to a modified Social Security system rather than finding revenues to pay for it outright also draws mixed reviews. The federal government ran a record $413 billion deficit in the fiscal year that ended Sept. 30, adding to a total government debt of about $7.5 trillion.
Administration officials have declined to estimate, at least in public, how much deficit spending would be required to pay for the transition to a partially privatized Social Security system.
"The issue is how much, for how long," said Robert Bixby, the executive director of the Concord Coalition, an organization devoted to the goal of a balanced federal budget. "You may swamp the economy with debt before there is a payoff."
Others welcomed Bush's willingness to ignore short-term deficits in pursuit of a long-term goal. Most analysts agree that the system will have to be changed in some way to deal with the tidal wave of retiring baby boomers - those born between 1946 and 1964, who number 79 million. They will begin reaching the retirement age of 62 in 2008.
Paying for change by piling up debt might avoid the need to increase payroll taxes, to cut benefits or other politically painful choices - at least in the short term.
"It's worth the transition costs," said Grover Norquist, the president of Americans for Tax Reform, an antitax group. "What you want to do is shift from the pay-as-you-go plan to one that is fully sustainable so everyone can save for the future. . . . Why would you put in a tax increase when you need to borrow over a fixed period of time?"
Contact reporter Ron Hutcheson at 202-383-6101 or firstname.lastname@example.org.