Sunday, May 08, 2005

And Now, The Problem With Means-Testing

George Will knows why Democrats are wary of President Bush’s means-testing idea for Social Security:

Progressive indexation -- larger benefits for the less affluent -- would mean that for the more affluent 70 percent of Americans, Social Security would be of diminishing significance as their affluence grows, with dwindling relevance to retirement planning. This 70 percent would be the portion of the population most able to take advantage of personal accounts. And it would possess more than 70 percent of society's political skills -- the will and ability to get the attention of politicians by articulating grievances and participating in politics by financial contributions and other means.

Basically, Will is saying that if we means-test we turn Social Security from a program of universal benefit to a welfare program for impoverished seniors. Once it becomes a welfare program, Social Security would lose the support it needs to continue.

Will doesn’t really say if he, himself believes this to be true, but it’s an argument worth considering. As previously stated, The Yellow Line supports some form of means-testing because of its many benefits. The Democrats, because of their historic connection to this great program and earnest desire to preserve it, are in a much better position to propose means-testing ideas than is the White House.

We also believe Social Security will not become a welfare program because, to receive benefits, you'd still have to pay in. Thus it would never be “free” money, even if it is only being paid out to the less fortunate seniors. Also, while we as a society might feel it is appropriate to ask a 22 year-old to get a job and support himself rather than receive a government check, it is highly unlikely we could ever be so callous as to deny a 70-year old grandmother her earned benefits.

But Will does offer some excellent criticisms of means-testing. Question is, why are we hearing this reasonable rebuke from a conservative columnist and not from Democratic leaders? Being the opposition party doesn’t mean just saying no. It means explaining why you’re saying no and offering different approaches to the problem.


At 5:28 PM, Blogger mrgavel said...

Many Dems are pushing various ideas on Social Security. I have heard, for example, a Democratic congressman call for lifting the cap up to $200,000.00 instead of the present $90,000.00. Since we don't, however, have the presidency it is hard for our positions to get noticed.

What I am curious about is whether you are willing to support such a change,and if not, why not?

At 6:18 PM, Blogger Alan Stewart Carl said...

It's true that Democrats have a hard time getting publicity because the minority party can rarely drive debate. But the main problem is, as a party, the Democrats have not really proposed a coherent vision other than that they are opposed to privatization. I also wonder why the Democratic leadership chose to shout down Bush’s means-testing idea rather than offering a more-honest rebuke.

As for raising the cap on taxed earnings, that is a solution that polls well. Of course, once you start putting real numbers to it, you might see a falloff in support. Here’s my thoughts: why not give higher earners a choice between higher taxes or lower benefits? I, for one, would much rather trade in some of my guaranteed benefits in exchange for avoiding a tax increase.

Also, benefit cuts rather than raising the cap will keep American businesses from having to pay higher taxes. Obviously, American companies pay half the Social Security costs, so any increase in the cap is a tax hike on businesses. I don’t subscribe to the cult of low taxes which supports lower taxes in ALL instances, but I do think higher taxes should be avoided whenever possible. This is a case where we can very likely fix a problem without a tax increase.

Still, I will withhold my final opinion until a full plan is presented. Effective means-testing might not be enough. In which case, a slight raise of the cap would likely be an acceptable, secondary solution. $200,000, in my mind, is way too high. But I’m willing to debate the point if it comes to that.


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