June 17 (Bloomberg) -- President George W. Bush is trying to salvage his faltering campaign for private Social Security accounts by accusing Democrats of obstructionism while searching for a compromise that can win approval in Congress.

The shift of tactics reflects the public disapproval and congressional reluctance that Bush faces even after a costly four- month, nationwide effort to sell the proposal, his top domestic priority.

``The Democrats have trumped him by keeping everybody in line and having everybody unwilling to sit down and talk,'' said Leanne Abdnor, a Republican who has advised the White House on Social Security policy and traveled with Bush to promote his plan. Until Democrats ``think they're going to pay a political price for the current strategy, they're going to keep it up,'' she said.

Plans for fixing the retirement system's finances may ``have to be split'' from the Bush proposal for personal investment accounts in the federal retirement program in order to get legislation through Congress, said Abdnor, who was a member of Bush's 2001 Social Security Commission.

Bush kept criticism of skeptical lawmakers to a minimum as he crisscrossed the U.S. promoting his proposal to let workers younger than 55 divert as much as a third of payroll taxes to government administered investment accounts. Now the president plans to step up his attacks on Democratic leaders while folding his Social Security pitch into speeches on the economy, the war in Iraq and other topics, according to a White House aide who spoke on condition of anonymity.

`Nothing Except Obstruction'

The new tactic was on display June 14 in a speech at a Republican fund-raiser in Washington, where Bush warned Democratic leaders they will pay a political price for refusing to negotiate.

``On issue after issue they stand for nothing except obstruction,'' he said. ``Political parties that choose the path of obstruction will not gain the trust of the American people.''

The comment marks a shift in approach, said Sylvester Schieber, a Republican consultant who has advised the White House and helped Bush promote his plan. ``It's clearly a different rhetorical track,'' said Schieber. ``It's the next part of the unfolding strategy.''

The administration is making no public concessions on the private-accounts issue. ``We want to move forward on legislation that will not only make Social Security permanently sound but also provide personal accounts,'' White House spokesman Scott McClellan said in a press briefing yesterday. ``You've now seen over the last few weeks a few Democrats starting to break with the Democratic leadership and say, `Yes, we ought to be putting forward ideas.'''

Solvency

Those ideas all focus on making Social Security solvent, not on Bush's plan to allow younger workers to divert a portion of their payroll taxes into accounts they could use to invest in stocks and bonds. Social Security will begin to pay out more in benefits than it receives in payroll taxes in 2017, according to its trustees. In 2041, Social Security will be able to pay 74 percent of its promised benefits as its surplus runs out.

Democrats argue that Bush's plan would push more seniors into poverty while benefiting financial-services companies that would manage the accounts. The Democrats' refusal to negotiate has thrown the Republican schedule for passing Social Security legislation off track.

House Majority Leader Tom DeLay, a Texas Republican, said last week he couldn't say whether a bill would reach the House floor before the end of the year. Senator Charles Grassley, an Iowa Republican who heads the Finance Committee, said yesterday that getting consensus on Social Security will take longer than he had predicted, and declined to specify when legislation would be introduced.

Proposals

The Finance Committee and the House Ways and Means panel are continuing to hold hearings to draft legislation.

In another sign of trouble for Bush, leaders of AARP, the biggest advocacy group for senior citizens and among the most powerful opponents of Bush's plan, said last week they were concentrating on solvency after concluding Bush's private accounts plan is dead.

Some Republicans say Bush's best strategy may be to work with Democrats on addressing Social Security's funding shortfall, which still would allow him to claim a victory.

That also may allow Bush to eventually circle back to his proposal, said Kevin Hassett, director of economic policy studies at the American Enterprise Institute in Washington.

``If you can put the system into actuarial balance, tactically you could accept it'' as the first step toward achieving Bush's goals, said Hassett. ``It makes private accounts more likely down the road.''

Accounts

Republican Senators Orrin Hatch of Utah and Mike DeWine of Ohio said Bush's only chance for success on the investment accounts would be to create them separate from Social Security, and not fund them through payroll taxes. ``Probably what we'll end up with is private accounts that are outside Social Security,'' DeWine said.

Other Republicans are trying to coax the Democrats with various approaches to solvency and private accounts. South Carolina Senators Jim DeMint and Lindsey Graham are co- sponsoring, with Pennsylvania's Rick Santorum, legislation that would use the current Social Security surplus to fund the personal accounts. ``It's the ultimate personal lockbox,'' DeMint said.

Even before this week Bush has been scaling back his focus on Social Security. He made nine Social Security speeches in February, 12 in March, six in April, five in May and three so far in June. On Wednesday in University Park, Pennsylvania, he spent the first half of a 35-minute speech talking about the war on terrorism, farm legislation, tax cuts and expanding trade and energy costs, before turning to his vision for fixing the retirement program.

Bush has visited 28 states on his Social Security campaign this year. Flying aboard Air Force One alone costs U.S. taxpayers $50,000 an hour. A March 10 visit to Montgomery, Alabama cost the city $26,429 in police overtime for security and road closures -- a cost that is replicated in every city he visits while varying from jurisdiction to jurisdiction.

To contact the reporters on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net

Last Updated: June 17, 2005 00:01 EDT