As the debate on Social Security reform advances, the threat to state and local workers may be doing the same.

[Mandatory coverage] is something that should be studied and be part of an overall discussion.

About 5 million government employees are not covered by Social Security and a White House spokesman has told The Boston Globe that President Bush may consider forcing them to participate in the program in order to boost revenues.

"To the extent that is an idea that may be part of a final solution, the president would be open to it," Trent Duffy said. "It is something that should be studied and be part of an overall discussion."

Mandatory coverage would solve about one-tenth of Social Security's projected deficit over the next 75 years but would do so by transferring tens of billions of dollars from state and local governments to the federal government. This could threaten the financial stability of public employee retirement systems, as well as lead to tax increases and cuts in government services. While governor of Texas, Bush went on record against forced coverage at least twice, signing a letter opposing the measure that was sent to President Clinton and putting his signature on an anti-mandatory coverage resolution that had been passed by the state legislature.

While Bush apparently is holding open the possibility of backing mandatory coverage to help finance the personal investment accounts that he wants to make a part of the program, some liberal opponents of personal accounts have already embraced the measure as part of their alternative reform plans. The Washington Post noted recently that Brookings Institution economist Peter Orszag, a former Clinton administration official, and Massachusetts Institute of Technology economist Peter Diamond have crafted a plan that relies in part on mandatory coverage, as has former Social Security Commissioner Robert Ball.

Duffy's comments were made about the same time the Employee Benefit Research Institute (EBRI) released a study extolling the value of bringing state and local workers into Social Security. The study found that universal coverage combined with lifting the wage cap for Social Security taxes would have the greatest benefit for the greatest number of workers of the major Social Security reform options. The Coalition to Preserve Retirement Security (CPRS) is drafting a response to the study.

All of this follows what had been some promising developments on the mandatory coverage issue. AARP officials agreed in February to ease up on - but not abandon - their support for the measure and 11 senators last week sent a joint letter opposing mandatory coverage to the Senate Finance Committee while Sen. Barbara Boxer, D-Calif., sent a letter of her own to the panel. The sending of the letters, however, were not entirely promising events; in 2001, 20 senators signed a similar letter that was sent to the Commission to Strengthen Social Security and several senators who signed then did not do so this year.

"The White House comments and the EBRI study show that we are not out of the woods yet on the mandatory coverage issue," CPRS Chair Terri Bierdeman said. "In fact, with the Social Security debate about to begin in Congress and both Democrats and Republicans looking for ways to increase the program's revenues, we may be just entering the forest."