June 20 (Bloomberg) -- U.S. Senate Republicans, faced with solid Democratic opposition to private Social Security accounts, plan to test their adversaries' unity by offering legislation that omits or delays President George W. Bush's plan to fund the accounts from payroll taxes.

The Republican proposals -- by Senators Robert Bennett of Utah and Jim DeMint of South Carolina -- would offer the accounts by financing them initially through other means. Bennett also plans to introduce a separate measure, without accounts, that would shore up Social Security finances.

The proposals, which will be introduced as early as this week, are designed to entice Democrats to begin negotiating a Social Security overhaul or force them to explain why they won't back measures aimed at strengthening the popular retirement program.

``If they want to be against saving the surplus, I'd like to see that,'' said DeMint, who is co-sponsoring a bill that would use Social Security's reserve fund to create the private accounts while prohibiting spending the program's money on other projects.

Arizona Senator Jon Kyl, chairman of the Republican Policy Committee, said that ``part of the object'' of introducing the bills was to engage the Democrats.

The DeMint bill is ``almost the lowest common denominator,'' he said in an interview. ``If nobody bites on that, I'm not sure there's a lot of hope'' of getting bipartisan support for a Social Security bill, Kyl said.

Bennett will introduce two bills -- one with accounts and another without -- as early as this week, said his spokeswoman, Mary Jane Collipriest.

Refused to Negotiate

Democrats have refused to negotiate on Social Security overhaul legislation the Finance Committee is trying to develop until Bush drops his plan to divert a third of payroll taxes from the Social Security system to create the accounts. Democrats say Bush's private accounts plan would cut benefits and increase the federal deficit.

Brad Woodhouse, a spokesman for Americans United to Protect Social Security, a coalition of labor and civil rights groups, said the Republican tactic will backfire and shows their desperation.

``The pro-privatizers are flailing about like dying fish on a dock,'' he said. ``They don't have a clue how to flip themselves back into the water.''

`Different Package'

Rebecca Kirszner, a spokeswoman for Minority Leader Harry Reid, a Nevada Democrat, called the Republican proposals the ``same policy, different packages.''

Bennett said he will offer one bill that would reduce the growth in Social Security benefits by tying increases to prices instead of wages for upper-income Americans and leaving unchanged benefits for the bottom 30 percent of wage earners. Middle-class beneficiaries would have their benefits tied to both wages and prices.

Consumer prices normally increase more slowly than wages, so tying benefits to prices would lower future benefits.

The method is based on one proposed by Robert Pozen, chairman of Boston-based MFS Investment Management, that has been praised by Bush.

Benefits also would be indexed to the increased life expectancy of Americans, further slowing the rate of growth in benefits, Bennett said. The bill won't include personal accounts, he said.

``We're going to see if the Democrats really mean what they say about solvency,'' Bennett said.

Bennett's second proposal would use voluntary deductions from taxpayers' salaries to fund accounts, later phasing in the use of 2 percentage points of the 12.4 percent payroll tax that funds Social Security. The bill would also automatically enroll Americans into 401(k) plans offered by their employers.

`Seed the Accounts'

DeMint's bill is co-sponsored by Senator Lindsey Graham, a South Carolina Republican, and Senator Rick Santorum, chairman of the Social Security subcommittee.

DeMint is delaying the unveiling of his bill from its scheduled introduction tomorrow until later this week in response to other lawmakers expressing interest in co-sponsoring the bill, said Wesley Denton, a spokesman for the lawmaker.

With the bill, ``we get the surplus off the table, seed the accounts and give a guarantee of a benefit,'' DeMint said.

Leanne Abdnor, a Republican who has advised the White House on Social Security policy and traveled with Bush to promote his Plan, said Democrats would feel the heat from constituents in the 2006 mid-term elections if they oppose the DeMint legislation.

``Going into the election, how do you vote against that?'' she said.

`Part One'

Under DeMint's bill, the private accounts would be voluntary for Americans born after 1950. The government would deduct the amount put into the account from a participant's traditional Social Security benefit. Account assets would be invested in Treasury bonds, he said.

The bill is ``part one'' of a strategy, DeMint said. It doesn't bring solvency to the system, which will begin paying out more benefits than money it takes in by 2017.

After the bill garners support, ``then we can move to long- term solvency,'' he said.

DeMint's bill's prohibition on spending the Social Security surplus on other government programs would deepen the overall federal deficit, which many Democrats said they would oppose.

David Certner, director of federal affairs at Washington- based AARP, the largest seniors' lobby, said the Republican accounts bills don't address the biggest concern among Democrats.

``Any money that's diverted from Social Security is anti- solvency,'' said Certner, whose group opposes the president's proposal.

`Jekyll or Hyde'

Woodhouse, the anti-accounts coalition spokesman, said Bennett wouldn't build trust among Democrats by offering two bills.

``Which one are we supposed to pay attention to, Dr. Jekyll or Mr. Hyde?''

Polls show Bush's cross-country campaign to promote his private accounts proposal hasn't garnered much support. Only a quarter of those surveyed approved of Bush's handling of Social Security, according to a New York Times online poll of 1,111 adults conducted June 10-16.

Senator Charles Grassley, an Iowa Republican who heads the Finance Committee, said June 16 that the legislation was taking longer to draft than he had expected.

``It's a tough lift, very slow,'' Grassley said in an interview with Iowa reporters. Drafting a bill with Democrats ``doesn't look so hopeful at this point.''

To contact the reporters on this story: Jeff Bliss in Washington at jbliss@bloomberg.net

Last Updated: June 20, 2005 14:23 EDT