Getting Personal.(ISSUES & INSIGHTS)(EDITORIALS)(Editorial)

Entitlements: President Bush at long last has put some flesh on the bones of his proposed Social Security reforms. It's a step in the right direction, which means it probably doesn't stand a chance in Congress.

What Bush laid out Thursday night would bring about major changes to the retirement program and, at the very least, put it back on solid fiscal footing.

The plan isn't perfect. We'd prefer something more radical, with up to half the current 12.4% payroll tax going into mandatory private accounts. But at least the president has made a serious effort to listen to critics and come up with a plan that might satisfy them.

To those who say reform would be a sop to the rich, for example, Bush has agreed to "progressive indexing" under which low-income recipients would see their benefits grow fastest, rich recipients slowest and middle income recipients somewhere in between. In essence, future benefits would be "means-tested."

As for the assertion that the personal accounts Bush wants would be too risky, Bush makes them totally voluntary. And he lets those who take part use a conservative mix of stocks and bonds or -- even more safely -- government bonds indexed for inflation. Even then, returns would top the paltry 1.8% that current workers can expect from Social Security.

As for system "solvency," another big issue for reform critics, about 70% of Social Security's future liabilities of $12 trillion would be erased. And most of the rest could be eliminated simply by replacing government-funded benefits in Social Security with private benefits from personal saving accounts.

We don't want to oversell this. As we said, Bush's plan isn't as strong as it could be. And, as far as we're concerned, Bush hasn't made it absolutely clear reform must include personal accounts from the start -- no compromise on this.