By Dave Anderson:
Via Ezra Klein, an interesting demonstration of priorities in action:
"The revenue loss over the next 75 years just from extending the tax
cuts for people making over $250,000 -- the top 2 percent of Americans
-- would be about as large as the entire Social Security shortfall over
this period," write
Kathy Ruffing and Paul N. Van de Water at the Center on Budget and
Policy Priorities. "Members of Congress cannot simultaneously claim that
the tax cuts for people at the top are affordable while the Social
Security shortfall constitutes a dire fiscal threat."
Social Security is an 'easy' problem to solve; follow through on the 1983 social contract of slightly higher income taxes after thirty years of too high payroll taxes, futz around a bit with tax rates and taxable bases, and/or expand immigration. All of those options are simple, small, non-distorting and don't screw with basic social welfare and well-being of millions. And that is why I think any Democrat who wants to touch Social Security as a means of demonstrating credibility to Republicans and very serious people in the Pain Caucus is a fool as the Republicans don't want to negotiate with socialist Hitlers, and the Pain Caucus hates the fact that someone in the bottom 97% of the income distribution is getting a government benefit.
Anyways, 'solving' Social Security is neither necessary nor sufficient to resolve the long run fiscal deficit. The money is in health-care, and ACA was a good first whack at that problem, but there are multiple whacks that still need to be taken. Whacking Social Security is needless sadism.
Social Security scare-mongering has always been a red herring and even the dullest of congress-critters know it. (Well, maybe not Virginia Fox and a couple more, but I'm talking even the loudest of those crying "wolf.")
ReplyDeleteSpeaking of the deficit and Social Security together is also misleading since two separate revenue streams are involved. "Deficit" is about budget problems with income and taxes other than Social Security.
Our payroll taxes, however, are earmarked for Social Security and Medicare are categorically different. Social Security costs are a distribution problem, not a budget problem. And as you pointed out, simply tweaking the cap on the highest earners will more than repair any shortages. This is one of the best-kept secrets in America.
And while I'm on the subject, there is an important distinction between SOCIAL Security and INDIVIDUAL security. IRA's, 401-ks, Keogh plans and others are individual plans intended to build assets for retirement in addition to the Social Security safety net.
The overwhelming majority of working people make no provision for additional retirement income simply because it is not possible on most incomes. So all this talk about "privatizing Social Security" is also a nutty idea.