Skip to main content

The mushy, corporatist middle at the Third Way has a new plan for "saving" Social Security, which reads pretty much as you would expect: deficit reduction on the back of Social Security forcing people to put their retirement savings in Wall Street's hands. Ah, but it's "saving" Social Security, so it has to be progressive, right? Seriously, does this sound progressive to you?

There are many on the progressive side who believe the Social Security shortfall should be solved through the elimination of the earnings cap on FICA collections. Currently, 6.2% of wages up to a cap of $106,800 are siphoned off from both the employer and employee to provide the bulk of the funding of the Social Security Trust Fund. This wage cap is indexed to overall wage gains.

We have deep concerns about complete repeal. While we support higher taxation on upper income individuals and accept that some of it must be used to bail out entitlements like Social Security, we believe the bulk of increased taxation would be best spent on growth-oriented investments in infrastructure, education, innovation, and the like.

No, much better that taxpayers' hard earned wages go to bailing out banks. Embracing means testing, raising the retirement age, and creating "Plus accounts for young workers to supplement retirement savings," (i.e., partial privatization) aren't progressive goals no matter how Third Way's principles argue otherwise.

You see, Third Way would have us shore up Social Security’s finances with a package that is two-thirds cuts and one-third revenue increases. They must have known this is just a wee bit unbalanced, especially for a capital “D” Democratic think tank like theirs, because they feel the need to justify it throughout the paper. They explain that we need to free up the revenue from Social Security for other purposes:

In a vacuum, we could in theory continue raising payroll taxes to keep up with the baby boom retirement. But those tax and spending decisions affect the entire U.S. economy and budget. Left unchecked, these trends will leave a small portion of our federal budget devoted to education, innovation, infrastructure and national defense, squeezing our badly needed public investments and jeopardizing our security. To avert this coming crisis, Social Security reform must be achieved principally through savings in benefits, not tax increases, as we seek to rebalance the long-term U.S. budget toward investments and economic growth.

Well, there you have it: the massive debt just ties our hands. Even though Social Security does not contribute a penny to the debt, and is forbidden by law from borrowing from the general budget, we need the money that currently goes toward it to pay down the deficit--supposedly so we can increase or maintain spending on other programs. There is apparently some magic line above which taxes cannot rise, and honoring our commitment to American workers no longer fits within that line.

How very Republican of them. Not every idea they put forward is conservative, they moderately suggest a raise in the payroll tax cap and an increase in the levels of "economic" immigration (not, apparently, comprehensive immigration reform), but that doesn't make them or this plan the progressive one they pretend at, particularly when at the same time they lie about real progressives' approach to strengthening the program.

This is just GOP-lite, turning Social Security into a welfare program for the very old and very poor and privatization for the rest, because we know how well stock and real estate investments worked out.

Originally posted to Daily Kos on Sat Jan 22, 2011 at 06:46 PM PST.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site