President Obama has given Perry an opening to do just that. In his address to Congress last week, Obama proposed a 50 percent cut in the payroll taxes that fund Social Security. Obama’s plan would extend and deepen the one-year cut he signed into law last year, reducing both employee and employer contributions from 6.2 to 3.1 percent through 2012. This would rob the Social Security trust fund of about $175 billion in financing next year (money Obama would replace with new debt). Obama’s proposal is generating opposition from conservatives on Capitol Hill. Rep. Pete Sessions (R-Tex.) says “it is a horrible idea” to cut the amount of money Americans pay into Social Security at a time when the program is at risk of insolvency.
This creates an opportunity for Perry to go after Obama for gutting the Social Security trust fund — pointing out that last year, for the first time in three decades, Social Security spent more on benefits than it collected in payroll taxes, and that Obama’s actions are making the program even more financially unsound.
But Obama is not the only politician who announced last week that he wants to dip into Social Security’s coffers. In his newly released economic blueprint, Mitt Romney endorsed . . . a payroll tax cut. It would be fair for Perry to ask how Romney can claim that that he wants to “save” Social Security when his own economic plan would raid the Social Security trust fund?
Heated exchanges notwithstanding, the fact is that Romney and Perry both agree that Social Security is being run as a criminal enterprise. In his book, “No Apology,” Romney writes: “Suppose two grandparents created a trust fund, appointed a bank as trustee, and instructed the bank to invest the proceeds of the trust fund so as to provide for their grandchildren’s education.” (Yes, he really chose a “trust fund” as an example.) “Suppose further that the bank used the proceeds for its own purposes, so that when the grandchildren turned eighteen, there was no money for them to go to college. What would happen to the bankers responsible for misusing the money? They would go to jail.” Yet this is precisely what his proposed payroll tax cut does. It takes money from the Social Security trust fund and uses it for other purposes (an economic stimulus).
Romney’s support for a payroll tax cut is a major vulnerability. So are his “senior scare” tactics on Social Security, which put him at risk of a conservative backlash. On Monday, the Wall Street Journal accused Romney of “sounding like President Obama” and “taking Social Security assaults a notch or two even beyond the Democratic playbook” — actions, it said, that endanger the chances of eventual reform. Republicans are still livid over the way Democrats attacked Paul Ryan for his plan to fix Medicare. Indeed, just a few weeks ago Romney accused people who use these tactics of “demagoguing [the] issue” and said such rhetoric “harms America.” Now he is engaging in the same demagoguery himself.
The one upside of the dispute is that it might force both candidates to explain what they would actually do on Social Security. In his 160-page economic plan, Romney mentions Social Security only twice, in passing. If he plans to run as the candidate who will save Social Security, he will need to do better than that. In a USA Today op-ed on Monday, Perry writes that he will “fix Social Security and make it financially viable for generations to come.” Because Romney has succeeded in creating doubt about Perry’s intentions, Perry will need to allay those fears by explaining precisely how he would do so if elected.
The universe of politically viable conservative options is quite small. The “Chilean model” of replacing the current pay-as-you-go defined-benefit system with personal accounts is a nonstarter. So is offering younger workers private accounts as an alternative to traditional Social Security. President George W. Bush barnstormed the country in 2005 selling this idea and got nowhere. The only other option (short of tax increases) is to reform the current system through some mix of higher eligibility age, means-testing and progressive indexing — possibly with “add-on” personal accounts that are financed with additional payroll tax contributions.
In other words, if and when both candidates put out actual plans, they probably will not be very far apart. Then Romney and Perry can finally stop softening each other up for Obama and get back to talking about the issue that will decide this election: jobs.
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