Tonight we've heard a State of the Union speech that puts a little meat on the bones of President Bush's second term agenda--but not much. I expected more specific proposals than we heard. Much of the rhetoric was familiar from the campaign and the president's public statements since his reelection.

Curiously, he again avoided spelling out how he would create private, personal accounts to augment Social Security--how he would pay for them, what effect they would have on traditional Social Security benefits, and more.

Even more curiously, a "senior administration official" who briefed reporters on the Social Security proposal earlier today disclosed details of the White House plan that I don't think will play well in Peoria. Most significantly, this official revealed that most or all of the earnings from new "personal" or privatized accounts will be paid not to the holder of the account, but to the government. The senior official called this a "benefit offset." It's one way to finance the creation of these private accounts, but it's going to cause quite a political stir, I think.

Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system.

The mechanism, detailed by a senior administration official before President Bush's State of the Union address, would hold down the cost of Bush's plan to introduce personal accounts to the Social Security system. But it could come as a surprise to lawmakers and voters who have thought of these accounts as akin to an individual retirement account or a 401(k) that they could use fully upon retirement.

"You'll be able to pass along the money that accumulates in your personal account, if you wish, to your children . . . or grandchildren," Bush said last night. "And best of all, the money in the account is yours, and the government can never take it away."

The plan is more complicated. Under the proposal, workers could invest as much as 4 percent of their wages subject to Social Security taxation in a limited assortment of stock, bond and mixed-investment funds. But the government would keep and administer that money. Upon retirement, workers would then be given any money that exceeded inflation-adjusted gains over 3 percent.

That money would augment a guaranteed Social Security benefit that would be reduced by a still-undetermined amount from the currently promised benefit.

In effect, the accounts would work more like a loan from the government, to be paid back upon retirement at an inflation-adjusted 3 percent interest rate -- the interest the money would have earned if it had been invested in Treasury bonds, said Peter R. Orszag, a Social Security analyst at the Brookings Institution and a former Clinton White House economist.

Here are the basics of the proposal, as described in greater detail by a senior administration official than by Mr. Bush, who called it "a better deal" for younger workers, echoing President Franklin D Roosevelt:

¶Beginning in 2009, workers could invest up to 4 percent of their wages in individual investment accounts up to $1,000 a year initially. The maximum contribution would rise by at least $100 a year afterward.

¶The program would be phased in. In 2009, this option would be available to workers born between 1950 and 1965; in 2010, workers born as late as 1978 could participate; and beginning in 2011, all those born after 1949 would be eligible.

¶Account holders would have to choose from a small menu of diversified stock and bond funds with varying degrees of risk, similar to the Thrift Savings Plan available to federal government workers.

[Note from me: So much for the freedom to invest as you see fit, eh?]

¶The personal accounts would be administered by the government; private companies would manage the investment funds under contract with the government.

[Note from me: Administered by the government, eh? Hardly what our "It's My Money" friends on the right had in mind.]

¶No withdrawals would be permitted before retirement.

¶When workers retired, most would be required to use at least part of their accounts to buy from the government lifetime annuities, financial instruments that provide a guaranteed monthly payment for life but that expire at death. Despite Mr. Bush's declaration that money in the accounts could be passed on to children and grandchildren, the principal of an annuity cannot be inherited.

The administration official acknowledged Wednesday that the accounts, alone, would not resolve Social Security's solvency issues. But while the President delivered a rousing appeal to step up to the challenge of Social Security, he largely avoided the painful questions of cuts and costs. Instead, he presented his private accounts as a historic new benefit for Americans.

The proposal would amount to one of the biggest changes in government social policy in history. But just as remarkable is what was not addressed.

The president did not say what benefit reductions he favored. The official who briefed reporters spoke only of unspecified "benefit offsets" and did not say what the cuts would entail or how large they would be.

The president did not address the cost to the government of paying full benefits to retirees for decades while tax money was being diverted into private accounts. Nor did he say how much this would increase the annual budget deficit.

There was no mention of what would happen to workers who become disabled, currently 16 percent of Social Security beneficiaries, or the minor children of workers who die, now 7 percent of beneficiaries. People who stop working or die young would obviously have much less in their retirement accounts than those who worked until retirement age. Nor was there discussion of whether spouses would have access to the private accounts or what would happen in the case of divorce.

No one in the administration mentioned how workers who retired when the market was in a slump would be protected financially.

There was no discussion of exceptions to no-withdrawal rule - for someone with large medical expenses associated with a terminal illness, for example.

All these difficult questions, some of them possibly deal breakers, were left for negotiations with Congress.