President Obama in Alpha, Illinois on Wednesday
Jed Lewison
wrote earlier about President Obama's town meeting yesterday, in Alpha, Illinois. I want to highlight just one thing from that earlier post that the president
said:
When folks tell you that we've got a choice between jobs now or dealing with our debt crisis, they're wrong. They're wrong. We can't afford to just do one or the other. We've got to do both. And the way to do it is to make some—reform the tax code, close loopholes, make some modest modifications in programs like Medicare and Social Security so they're there for the next generation, stabilize those systems. And you could actually save so much money that you could actually pay for some of the things like additional infrastructure right now.
Now, we know that President Obama knows that Social Security doesn't have one damned thing to do with the debt. He has said so repeatedly. And yet, Social Security continues to pop up all of the time when he's talking about the debt and deficit, and has been dragged onto the table in the debt ceiling negotiations. It came up again in yesterday's town meeting when this question was asked:
Q My question is about Social Security. I know that one of your ideas to fix the solvency of it is to reevaluate the equation that determines the COLA, the cost-of-living adjustment. But as the law stands right now, we are only taxed on the first $107,000 that we make.
THE PRESIDENT: Right.
Q That means every dime that I make is taxed for Social Security.
THE PRESIDENT: Right.
Q I don't make $107,000. (Laughter.) But that means that—
THE PRESIDENT: Somebody said you will—
Q Someday, I hope.
THE PRESIDENT: Yes, you sound pretty smart. It sounds like you're going to do just great.
Q Thanks. But that means that people like Mitt Romney only pay into Social Security on the first one-tenth of 1 percent of what they make.
THE PRESIDENT: Right.
Q Can we look forward to you telling the Republicans that it's time that the wealthy pay their fair share? (Applause.)
THE PRESIDENT: Well, first—this is a very well-informed young man here. (Laughter.) You're exactly right that the way the Social Security system works, there's what's called—there's basically a cap on your Social Security, which there isn't, by the way, on Medicare. But Social Security, it only goes up to the first $107,000; and you're right, somebody who makes—who has net assets of $250 million and are making maybe $5 million a year just on interest or capital gains or something, just a fraction of it's going to Social Security. I think there's a way for us to make adjustments on the Social Security tax that would be fairer than the system that we use right now.
I do think, in terms of how we calculate inflation, that's important as well.
That means that the White House will continue to push for the chained CPI, the new inflation formula that will mean a very real benefits cut for seniors as they age. A lifting of the payroll tax cap is a no-brainer for the program, and makes absolute sense, but the chained CPI will do real harm, and mean a real cut in benefits.
