Democrats’ Position on SS

Anybody know what the Democrats’ position is on ensuring the long-term viability of social security? We know what Bush wants, though we need more details. And Congressman Bill Thomas has a few ideas, like making it gender-specific. But what do the Democrats want? That we can’t articulate it sums up the problem with da Dems. They have no position except to be opposed to Bush’s.

After I wrote the above paragraph, I thought maybe I had missed something. So I plugged in a few terms in Google and see if the da Dems really had a plan. Well, not unless they came up with one in the past two weeks, as E. J. Dionne made note of the absence of an SS policy in a column Jan. 7. They’re planning one apparently. Meanwhile, Bush’s view of the “crisis” continues to sink in, or perhaps better, just sinks.

Comments

[Bob]

Fair enough, Alan. George Will has a column today in The Post saying, as you do, that 2040 is unknowable at this time. But when you say a “national consensus” are you talking about passing a law that describes changes not to take place until 2030? If not, then what you have is akin to a “resolution” that means nothing. If so, at least you have something concrete that “would allow workers to plan.” I agree that benefits for current users or those retiring in the next 20 years needn’t be changed.

[alan]

I am responding to Bob's question about what I meant by my comment that I think it might be appropriate to start planning for the post 2042 era. First, I used the word "plan" and "start" because I think the chances that 2042 will look anything like what the predictions show is remote. That's FOUR decades from now. I probably would favor announcing now a national consensus that starting, say, in 2030, a series of changes will be phased in to slow the rate of growth of benefits and increase revenues. Using a combination of inflation indexing rather than wage indexing at some point in the future, means testing benefits at some point in the future, and raising the cap at some point in the future, would result in set of relatively moderate changes. Announcing the consensus would allow workers to plan. Phasing in changes seems more fair than a sharp change in a given year. But I see absolutely no reason to start raising taxes or cutting benefits right now.

If you want ideas, how about looking at encouraging private saving? Access to 401k type plans ought to be universal. Why should a worker be limited to the low annual IRA contribution limits just because the employer does not offer a 401K plan?

[Bob]

While I acknowledge that Bush is unnecessarily yelling “fire” – and that getting our fiscal house in order is always a good idea -- I think now would be a good time for Democrats to present a plan for the long-term viability of social security. For one, it presents Democrats as thinkers. Right now, Dems are all considered knee-jerk protectors of the status quo. They should be perceived as the party of ideas or they’ll never recapture power.

Now would be the time to talk about long-range changes to the SS system, including means testing. SS was meant as insurance against old-age poverty. That seniors with incomes over $100,000 not only receive SS payments but do so long after they’ve recouped what they put into the system. Maybe 100k isn’t the threshold, but I think if combined with the idea of increasing payments to those below the threshold, the Dems could present themselves as the party of the middle class. Such a move would be an increase in the progressiveness of the tax system.

Alan, I’m not sure what “planning for the post-2042 era” you would recommend.

Jeremy, I’m also not sure why the Dems would want to portray themselves as saying there is not now nor will ever be a problem with SS. You can argue that Bush is overstating the case, but clearly those under 30 have enough cause for concern to be ready to listen to alternative plans.

[alan]

The most common "plan" I have read about is lifting the cap on the amount of income subject to social security payroll tax. I think that this idea, if to be implemented any time prior to 2042, is a terrible idea politically and as a matter of policy. The social security tax already generates more revenue than expenses, and will continue to do so until 2018. After 2018, the federal government has already promised to honor redemption of the "trust fund" using general revenues -- i.e., from the income tax system. Supposedly, the trust fund will run out in 2042 (although there is honest debate about seriousness with which we should take that prediction). Any social security tax increase before 2042 would further increase regressivity of our tax system, and would be a betrayal of the promises made. Politically, why should the Democrats support an increase in the short-term surpluses generated, which only takes the pressure off the income tax as a revenue source? If benefits are cut in the short term, that would also increase the social security surplus. Such actions would increase regressivity of our tax system, while further embedding the idea that the Democrats are the party of taxation with the bottom 75 percent of wage earners (the Democrat's nature base). I personally don't think the Democrats should have a plan, beyond legislation which would start the planning for the post-2042 era. If you want to "save" social security in its current basic form, probably the most effective thing that could do would be an effort to put the overall federal fiscal house in order to ensure that the federal government is in a decent position to honor its promise to redeem the trust fund.

[Jeremy]

The joy of last minute edits, /Your/You're :)

[Jeremy]

Your correct, the Dems can't seem to decide if they should have a plan or not. The more "centrist" ones seem to be accepting of the adminstrations "crisis" rhetoric, but argue private accounts is not the solution. The more "left-leaning" look to be arguing to reject the crisis mentality totally, and argue against even acknowledging the need for a plan. The former approach can be much more self-serving (and requires less risk), which is why it seems to be more common. The latter is more risky, and requires a unity that is currently lacking, but would likely be more successful if it could be pulled off.