Jan. 30 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson, who left one of Wall Street's most powerful posts in part to broker a Social Security overhaul, may find his biggest hurdle is his boss, President George W. Bush.

For both substantive and political reasons, any fix to Social Security must both increase revenues and reduce benefits, budget experts say. Paulson, the former Goldman Sachs Group Inc. chief executive officer, is inviting Democrats and Republicans to talks including all options; at the same time, White House officials appear to rule out raising taxes.

``It's not me he has to convince,'' said Representative Mike Thompson of California, a member of the Blue Dog Coalition, a self-described group of ``moderate'' Democrats. ``The convincing needs to be done in the White House.'' Thompson, who serves on the House Ways and Means Committee, participated in a meeting with Paulson on the subject last week.

The retirement program is forecast to sink into deficit within a decade; Bush's commitment to a deal fixing it has waned over the years, as charted by the annual State of the Union speeches that he has used to lay out his agenda.

After a push with former Treasury Secretary John Snow failed in 2005, Bush in January 2006 called for a bipartisan ``commission.'' Last week, he pared his initiative to a request for ``enough good sense and good will'' to work together on altering the government's health and retirement programs.

Democrats including Senator Kent Conrad of North Dakota, who chairs the Budget Committee, say comments by Vice President Dick Cheney give them reason to doubt that Paulson's efforts are fully backed by the White House.

`Very, Very Clear'

Cheney said in an interview with Fox News on Jan. 14 that Paulson's commitment to all options doesn't mean the administration is open to raising taxes. ``The president has been very, very clear on his position on taxes, and nothing's changed,'' he said. ``Paulson is trying to get people to the table to sit down and talk.''

Grover Norquist, president of Americans for Tax Reform, said after a Capitol Hill gathering of anti-tax groups this month that Bush and his aides have made clear that ``they don't intend to raise taxes.''

``We don't doubt Paulson's sincerity,'' said Jason Furman, director of the Hamilton Project, a Brookings Institution initiative in Washington started by Democrats including former Treasury Secretary Robert Rubin. ``The question is: Can he deliver the president?''

No Preconditions

``The administration's position is that we want to talk about this with no preconditions,'' Paulson's spokeswoman, Michele Davis, said in Washington. She said Paulson was unavailable to comment.

Allan Hubbard, head of Bush's National Economic Council, said in an interview that while all options are open for discussion, ``the American people know that this president is not a tax raiser, he's a tax cutter.''

Paulson, 60, and Rob Portman, the White House budget director, met last week with a group of Democrats to discuss Social Security. The topics included forming a bipartisan group of lawmakers and White House officials to discuss entitlement overhauls. Portman said Paulson would probably be the administration's lead representative on the panel.

No Blueprint

``I do not think he carries the blueprint that can produce a bipartisan deal,'' Representative Earl Pomeroy, a North Dakota Democrat, said from Minot, North Dakota. Pomeroy said he reached his conclusion after participating in a Jan. 24 meeting with Paulson that touched on Social Security only briefly.

The panel is one of at least three proposals being floated for committees to address issues in the Social Security, Medicare and Medicaid programs. Spending on the plans will climb as the number of retirees rises; Social Security costs are forecast to jump as much as 80 percent to $789 billion by 2015.

Bush's 2005 proposal called for creating personal retirement accounts that could be used to buy stocks and bonds, and passed on to heirs. Democrats on Capitol Hill refused to even discuss it because they said the plan would have cut benefits without raising revenue.

``Both sides have to be willing to give up their fixed positions,'' Conrad, 58, said at a Washington press conference last week. ``There needs to be more revenue.''

While acknowledging in his Senate confirmation hearing in June it might be ``naïve,'' Paulson said he was optimistic on making progress on entitlement changes.

``One of the reasons I decided to come to Washington'' was to engage in overhauling the entitlement programs, Paulson said in his first speech after taking office, at Columbia University in New York.

Since then, the Democratic takeover of Congress and the Bush administration's preoccupation with the war in Iraq and rising dissent at home have changed legislative priorities. In addition, said Representative Frank Wolf, a Virginia Republican, Paulson may have underestimated the difference between brokering deals on Wall Street and in Washington.

``He is a Wall Street guy; he's used to making decisions and moving on,'' Wolf said in an interview from Cambridge, Maryland. ``This place can allow a decision to go on forever.''

To contact the reporters on this story: Alison Fitzgerald in Washington at Afitzgerald2@bloomberg.net; Kevin Carmichael in Washington at kcarmichael@bloomberg.net

Last Updated: January 30, 2007 07:32 EST