The Shopsmith, without the speed increaser, would not give you the rpm for a decent router cut. Using a spiral bit would essentially be the same as using a drill bit because the side to side cut would really be rough unless you made several shallow cuts.
As Wayne said, you're better off with a Forstner and a chisel.
'The true soldier fights not because he hates what is in front of him, but because he loves what is behind him.' G. K. Chesterton
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