Barack Obama starts talking sense on Social Security

Sen. Barack Obama yesterday admitted Social Security is in trouble and said he would support taxing more income to help preserve the program’s promised benefits.

The Associated Press:

“I think the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and people who are in need are protected,” the Illinois senator said.

“That is the option that I will be pushing forward.”

Currently, only the first $97,500 of a person’s annual income is taxed [for Social Security]. The amount is scheduled to rise to $102,000 next year. …

Social Security is projected to start spending more than it collects beginning in 2017, with its trust fund depleted in 2041.

Already depleted. The Associated Press never gets this right. The “trust fund” already is depleted. It has accumulated no cash over decades. As fast as we taxpayers send in the money, it is spent. Not all of the cash is spent on Social Security retirees; the rest is spent on unrelated federal programs.

Obama’s comments on “Meet the Press” were a step toward realism, which has been rare in the Democratic Party. His remarks were in stark contrast to Sen. Hillary Clinton’s declaration a month ago that Social Security is not in a crisis.

Not one penny of my Social Security taxes have been saved in the “trust fund,” and Clinton claims there’s no crisis. Geez. And she knows better.

Frank Warner

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Update: Paul Krugman scolds Obama for straying from the Democratic Party faith that a Social Security without money will work. Totally irresponsible and unforgivably dishonest.

A question for Krugman: What’s the difference between the so-called right-wingers’ plan to privatize up to a third of Social Security, and Hillary Clinton’s plan to reduce Social Security benefits by 30 percent (as a result of ignoring the cash shortage) and create a new 401(k) privatized account? Don’t the two plans look pretty much the same?

Comments

[Christopher Taylor]

One more time: no need for tax increases. Just cut spending. How many times do you have to read this for it to sink in?

[jj mollo]

Repetition is not proof.

[Frank Warner]

The trouble is, Christopher, we've already paid for our Social Security benefits. Within a few decades, we'll all want to cash in.

And then there's that other $90 trillion in federal obligations.

Do the math. Even if that $90 trillion is spread over 50 years, it's about $2 trillion a year we have to come up with. That's not an avoidable expense.

How would you pay it?

[Christopher Taylor]

Repetition is not proof.

Repetition isn't but then it's not an attempt to. I've already gone over the proof several times in here and it's obvious common sense fact. Everyone, everywhere thinks the government spends too much. Everyone. We argue on what, but we all know its true.

How would you pay it?

... by cutting government spending, and the money saved by that would go into the Social Security trust fund where it belongs. Is that not sort of obvious?

We don't have to raise taxes if we cut spending. Ever. That should only be an option if the government is not overspending, and we're not likely to see that in our lifetimes.

Come on guys, get away from the tax increase as your first, and only kneejerk reaction. Start looking at it like you would your own finances.

[jj mollo]

where would you cut?

[Frank Warner]

Christopher, when my debts come due, I pay them, or I'm in big trouble. The U.S. has $99 trillion in debts coming due, even if it drops everything but Social Security, Medicare and the Defense Department.

It will take money to pay off those obligations, or we're in big trouble.

[Preevyet]

I never knew there was a cap on social security income. So even if you make $10 million a year you pay the same as a guy making $100K a year. That isn't fair. I'm a conservative against raising taxes but this is a no brainer, make the tax even across all incomes, ie if the rate is 5%, the $10M maker should pay $500K, not $20K (assuming 5% on $100K). Think of what adding that $480K to the coffers would do (and that's just one person), it might save Social Security. Problem is congress keeps raiding SS to pay for other things, that should be illegal. Anyway, for once I agree with my Senator.

[George]

The theory behind this is that there is a cap on Social Security payouts. That guy who made $10 million per year will get the same sized Social Security check you will.

Social Security isn't income tax even though Congress has abused it as such. Attempting to make it a regular tax would be a case of trying to use two wrongs to make a right.