WASHINGTON – President Bush, setting the stage for political battles likely to dominate his second term, called for limits to tort litigation yesterday in the first day of a two-day economic conference organized by the White House. Today the gathering will focus on Mr. Bush’s case for private Social Security accounts.

Democratic critics launched a preemptive offensive against the accounts, sketching out the broad outlines of their critique of the proposal that will be elaborated in coming months, but they stopped short of offering an alternative plan to ensure the solvency of Social Security when baby boomers begin to retire.

Mr. Bush appeared at the gathering of economists, lobbyists, and business owners a few blocks from the White House and pledged to bring forward a legislative package that would limit the legal liability of medical professionals and set limits on class-action lawsuits and asbestos-related litigation.

“Those who have been hurt ought to have their day in court. But a judicial system run amok is one that makes it really hard for small businesses to stay in business,” the president said during a panel discussion entitled “The High Costs of Lawsuit Abuse.”

He referred to the tort system as a “meat grinder” and a “lottery,” as panelists blamed lawsuits for increasing the country’s health care costs and hurting international competitiveness.

Participants injected an emotional tone to the debate over tort litigation that is more characteristic of lawyers who say they are advocating for victims of corporate wrongdoing.

Mr. Bush told a businessman from Monroe, La., Mike Carter, who said he is facing more than 100 asbestos-related lawsuits, that his story is a “painful one.” Mr. Carter said he is being sued for reselling what he said he thought was a safe product to customers who asked for it.

The secretary of commerce, Don Evans, described as “heartbreaking” the story of Mississippi pharmacist, Hilda Bankston, who said her husband was felled by a massive heart attack two weeks after being named a defendant in a national class-action lawsuit involving Fen-Phen, a weight-loss drug.

The tort lawyers’ lobby group, the Association of Trial Lawyers of America, responded with a statement accusing the president of taking away Americans’ legal rights in what they called “yet another giveaway to the insurance, drug, HMO, and nursing home industries.”

The White House conference kicked off with a panel of economists who painted a rosy picture of the economy and credited the Bush tax cuts for America’s economic growth, while downplaying concerns about the growing deficit.

A professor of economics at Harvard University, Martin Feldstein, who is often mentioned as a leading candidate to be the next chairman of the Federal Reserve, said the economy is “now in very good shape.” He cited an annual growth rate of nearly 4% – twice that of Europe and Japan – and a 5.4% unemployment rate.

The biggest challenge to the economy, he said, is “to increase the very low national saving rate,” which he said could be done by lowering taxes on investment, decreasing the budget deficit, and reforming Social Security.

Mr. Bush has said he is committed to creating private investment accounts using a portion of Social Security taxes, and he has said he would not raise payroll taxes to create them. But the president has yet to say how big a portion of Social Security payroll taxes should be redirected into accounts or how he would finance the roughly $2 trillion needed to create the accounts.

Democrats laid out some of their objections to private accounts yesterday, including the suspicion that the accounts may be intended as a first step to full privatization of the program, which they say could render future benefits – currently defined by law – subject to the whims of financial markets.

They also expressed concern about the economic impact of the government borrowing trillions of dollars to create the accounts, a concern that several private sector economists at the conference said they did not share.

The chief investment strategist at UBS Wealth Management in New York, Mary Farrell, said the markets would “welcome” privatizing Social Security, despite adding $1 trillion to $2 trillion over the next 20 years to the deficit.

She argued the policy would result in “a much healthier system and reduced long-term deficits,” because such a deficit differs from a “spending deficit” because it would increase household savings despite decreasing government savings, thus “leaving total savings unchanged,” she said.

The chief economist at JP Morgan Chase, John Lipsky, told The New York Sun in an interview that the impact of such borrowing would not have a major impact on the markets because it would represent moving a future liability to the present, and the money would not be borrowed to finance additional spending.

“It’s really hard to imagine how this issue is going to have a major impact on financial markets,” he said.

In a conference call following the conference, the senior Democrat on the House Ways and Means Committee’s Social Security committee, Rep. Robert Matsui of California, said the scheme could “do major damage to the economy.”

Mr. Matsui called the looming shortfall in the Social Security trust fund “distant” and “manageable,” and said it was a problem that could be solved “in a short period of time” if the president sat down to negotiate with Democrats and did not insist on private accounts.

Accusing the president of “trying to create a crisis,” he said the retirees would receive about 73% of promised benefits after 2042.

Despite the president’s assurances that private accounts would be voluntary, Democrats warned that the system should remain one in which the size of benefits is defined by law, rather than determined by the markets. Mr. Matsui also predicted the accounts would cost an additional $6.6 trillion dollars after the initial transition costs.

The senior Democrat on the House budget committee, Rep. John Spratt of South Carolina, derided the conference as a “pep rally for privatization.”

The Democrats also criticized proposals that would slow the rate of growth in benefits by changing the way they are indexed to inflation. “This is not something that is a technical correction or adjustments to the program – this is a deep cut to the program,” Mr. Matsui said.

They were unapologetic for their lack of an alternative plan.

“We need to get the president to come up with a proposal or make a recommendation to [congressional leaders] so we can begin a real debate on this issue,” Mr. Matsui said.

“If we come out with a proposal, nothing is going to happen. …We can’t make this happen. We would not even be able to get a hearing on our bill.”