As an incentive to invest, his plan calls on the federal government to match the individual contributions for low-income workers and to pay young workers a lump sum if they agree to postpone receiving Social Security benefits for up to a decade.

Hatch, the No. 2 Republican on the Senate Finance Committee, also proposes, at a minimum, to raise the Social Security retirement age to take into account the longer life expectancy.

“In my view, a successful Social Security reform plan must do more than tinker at the edges. We've been through that before,” Hatch said in a speech to a group of Washington lawyers. “It needs to address fundamentally the two basic shortcomings in the way we think about retirement security: the age to retire and how to prepare for retirement.

Hatch's plan is a significant departure from the concepts floated by President Bush to allow workers to invest part of their Social Security contribution in private accounts. Hatch said he supports the president's proposal, but acknowledged that it is a hard political sell.

“Let's face it. If we cannot find a way to attract significant bipartisan support in the Senate, Social Security reform is dead. The president knows this, you know it and I know it,” Hatch said.

Hatch has not calculated what the initial costs of his plan would be. He said it would require additional federal borrowing or raising a cap that limits Social Security taxes to an individual's first $90,000 of income, a tax increase that Hatch said he could swallow if it is part of a careful, thorough reform package.

Utah Sen. Bob Bennett has put together his own Social Security reform proposal as well, which received an endorsement this week from The Wall Street Journal's editorial board.

Bennett's plan would shrink the guaranteed benefit for the wealthiest recipients while preserving the benefits for the poor and putting those for middle-income workers on a sort of sliding scale.

Hatch said he is intrigued by Bennett's proposal and, “I know the White House is looking very carefully at these ideas.”

He also chastised Democrats for sitting on the sideline rather than joining the debate.

Hatch would call his new retirement savings accounts “Personal Unlimited Retirement Security Accounts,” or PURSE Accounts.

They would be an add-on to existing Social Security.