A Half-Baked Proposal

Monday, June 6, 2005

FOR MONTHS congressional Democrats have stuck to a just-say-no approach to Social Security, attacking President Bush's ideas while refusing to say how they would fix the program or, in many cases, refusing to acknowledge that the program needs fixing. In that sense, at least, a new proposal by Rep. Robert Wexler (D-Fla.) is a welcome development -- to us, if not to House Minority Leader Nancy Pelosi (D-Calif.), who is reported to be none too pleased with Mr. Wexler's heresy. But the substance of Mr. Wexler's plan represents scant progress. His district includes more Social Security recipients than that of any other Democratic member of Congress, and his one-sided fix reflects that demographic: It would not trim a single penny in promised benefits.

Instead, Mr. Wexler -- who's been joined in recent days by Rep. James P. Moran Jr. (D-Va.) -- would address Social Security solvency entirely by raising payroll taxes. Earnings of up to $90,000 are currently subject to a 12.4 percent tax; Mr. Wexler would impose a 6 percent tax (half paid directly by the employee, half by the employer) on earnings above that.

"I refuse to support any plan that cuts benefits," Mr. Wexler said in unveiling his proposal -- though he didn't explain why the benefits promised to seniors who would be well above the poverty line with or without Social Security must remain sacrosanct. Likewise, he complains that Mr. Bush's proposal for progressive indexing of benefits "effectively ensures the gradual loss of support among higher- and middle-income Americans who would see their promised benefits reduced." But why isn't Mr. Wexler's program, which would slap a big extra tax on people with higher incomes without giving them any more in the way of benefits, at least as much a risk in that regard? Indeed, one might suspect that having to pony up for a lot more taxes now would do more to erode support than the threat of benefit reductions down the road.

This plan is both unbalanced and inadequate. It's unbalanced because it seeks to address the Social Security problem solely on the tax side, while making benefits untouchable. But government will face other compelling uses for new revenue; why should the fruit of any tax increase go entirely to seniors? Why in an age of scarce governmental resources should seniors -- whatever their income -- be eternally shielded from having to give up anything in the way of benefits? The plan is inadequate because, by not making any adjustments in promised benefits, it doesn't put Social Security on a sustainable footing. By pouring more money into the program without taking any steps to reduce future costs, it would postpone the problem, not solve it.

It's good that an elected Democrat has come forward with a Social Security plan. Now, it would be even better if a Democrat would come up with one that's less lopsided.


© 2005 The Washington Post Company