Moderate Social Security .:. grubbykid.com

Moderate Social Security

Fresh off of a nuclear compromise, the Senate Wishy-Washy faction (the super-duper-moderate-compromise rs) have set their sights on Social Security. I don't have anything of substance to add to Chris Bower's response to Senator Graham's call to "fix" Social Security by cutting promised benefits, except to preach caution.

Chris rightfully blasts the Senator for primarily looking at cutting benefits only:

Two-thirds of the American public supports a very simple plan for Social Security: end the wage cap. This a pretty good plan, since it would make Social Security run a surplus for centuries. In Washington, two-thirds support would mean it could over-ride a veto.

We have united opposition to carve-out private accounts. That, however, is only half of the battle.

My caution is that raising the wage cap, the cap on how much personal income is taxed for Social Security currently set at $90,000, actually politically weakens the program without adding too much progressively (in terms of tax rates) to the program. Yes the cap should be raised, but as you raise the cap, less and less Americans will psychologically "buy into" the program because they will rightfully get less and less out of it.

Well, what can we do about the wealthy in order to maintain their end of the bargain called "America?" First off, Social Security isn't going anywhere, there are tiny tweaks so that in 2041, we aren't dipping into the trust fund.

But, as a reader to TPM illustrates, the problem is not with Social Security, rather it is with the huge deficit caused by the repeal of the Estate Tax, the upper class tax cuts (which have oh so fixed our economy), and the cost of invading two and running two Middle East countries.

First, raise the cap slightly so that wealthy earners pay their way. This seems fair to me. Second, reinstate the Estate Tax, in order to bring more income into the General Fund to cover the cost of the War Against Terror and the War in Iraq. Call it the Liberation Tax. Third, repeal the upper class tax cuts - you want to spread freedom buddy? Well that costs money.

All three of these ideas have a chance in hell of occurring under the "Taxes = Slavery" madness which the Republican Party operates. What could happen to increase personal saving is some mixture of government matched 401K savings and greater tax relief linked to those 401K plans to earners less than $90,000 a year.

But this wouldn't work either, because this Congress would twist (and are currently twisting) bills aimed at Middle Class 401k plans into giant tax shelters for the rich. The bills I've been reading (sorry no link - will be added) would increase the tax break gained from investing into 401k plans, but are all targeted to earners above $90,000 a year. This of course, does nothing to "help" Social Security or the true Middle Class, but appears to yet another break for the wealthy.

If the President's aim of destroying Social Security is to increase a valorous goal of personal savings, then why are the plans his administration and surrogates supporting aimed squarely at those already reaping the benefits of tax breaks and shelters?

The obvious answer is that the President is not serious about increasing personal savings, but rather this is just another stop on the Good Ship "Let's Destroy Everything Good."

That's what I'm concerned about.

Moderate Social Security

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