WASHINGTON, June 18 — Opponents of President Bush's plan to create personal investment accounts within Social Security released a report today concluding that the administration's approach would lead to deep cuts in retirement benefits and still require trillions of dollars in additional financing to keep the system solvent.

The report, by Peter A. Diamond, an economics professor at the Massachusetts Institute of Technology, and Peter R. Orszag, a senior fellow at the Brookings Institution, is sure to provide material to Democrats for this fall's Congressional elections.

White House officials criticized the report as misleading or wrong. They said the report exaggerated the cuts in benefits by comparing them with what is available under current law, rather than with what the system could afford to pay if no changes were made to the system as the population ages in coming decades.

Without any changes, Social Security will start paying out more in benefits than it takes in from payroll tax revenues and interest starting in 2027, leaving it increasingly dependent on redeeming government bonds the system holds, according to the system's trustees. By 2041, Social Security would exhaust its "trust fund" of bonds, leaving it unable to pay full benefits.

The report concluded that under two of the commission's three proposals, monthly benefits for each member of a two-earner couple retiring at 65 in 2075 would be well below benefits promised under current law even after taking account of the returns from a personal investment account. The report did not analyze the commission's third proposal, which would not seek to restore the system's long-term solvency.

Under one of the commission's proposals, the report said, total benefits would be 10 percent below current-law benefits for low-income people, 21 percent below current-law benefits for middle-income people and 25 percent below current-law benefits for upper income people.

Under the other proposal, the reductions in total benefits would range from 21 percent to 27 percent, and would be even larger if adjusted for the risk of investing in the stock market, the report said. The benefit reductions would be smaller for people who reach retirement age in the next three or four decades.

Charles P. Blahous, executive director of the president's commission, said the study "appears to have been deliberately constructed to bias the discussion against proposals that include personal accounts."

Mr. Blahous cited calculations showing that in most cases retirees would receive larger benefits under the commission's proposals than the current system can actually afford to pay, and that in some cases beneficiaries would do as well as or better than the current system promises.

Copyright 2002 The New York Times Company

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