Monday, October 1, 2007
"THERE ARE basically only three options: We can raise taxes again, which no one wants to do because the payroll tax is regressive. . . We can cut benefits. . . Or we can work together to try to find some way to increase the rate of return."
Once there was a Clinton who understood three key things about Social Security: The system is not sustainable without changes; these changes entail either risk or pain; making them sooner is easier than making them later.
That Clinton, of course, was Bill Clinton, quoted above from December 1998. But listening to Sen. Hillary Rodham Clinton (D-N.Y.), you'd think nothing ails Social Security that a little bit of fiscal responsibility wouldn't cure. If something more is needed, Ms. Clinton isn't saying what. Private accounts are off the table and, Ms. Clinton adds, cutting benefits or raising the retirement age is "not an answer."
At an AARP forum for presidential candidates in Iowa two weeks ago, Ms. Clinton dismissed the "people on the other side of the aisle who never wanted us to have Social Security and Medicare" and who "run around all the time sounding the alarm." Since President Bush took office, she noted, the insolvency date has moved from 2055 to 2041. "So the first thing is, let's get back to doing what worked in the '90s to shore up Social Security."
But Ms. Clinton's husband sounded the alarm she now derides. "Every single year we avoid resolving this, it will get harder and harder and harder," Bill Clinton said in 1998. So what would Hillary Clinton do if she becomes president a decade later? "Putting everything on the table is not the right answer, raising the retirement age is not an answer. Cutting benefits is not an answer," she said. Ms. Clinton's comments were a swipe at her chief Democratic rival, Illinois Sen. Barack Obama, who had said that "everything is on the table" for Social Security except private accounts. But don't get too excited: Mr. Obama has taken care to backtrack from that outburst of boldness, writing in the Quad-City Times that "I do not want to cut benefits or raise the retirement age."
At least Mr. Obama was willing to broach one possibility -- raising the cap on payroll taxes, currently $97,500, though it's hard to see how such a significant tax hike squares with his proposal for new middle-class tax breaks. Former North Carolina senator John Edwards has raised a different, promising idea -- leaving the existing cap in place but putting a surcharge on income over $200,000.
Ms. Clinton's response? "I'm not putting anything on the proverbial table until we move toward fiscal responsibility," she said during Wednesday's debate in New Hampshire. But Ms. Clinton would reverse the Bush tax cuts, whose irresponsibility she correctly derides, in order to fund her health-care program. Because Social Security increases are pegged to wages, rather than inflation, economic growth alone won't solve the problem. Fiscal responsibility first is fine; fiscal responsibility only is an irresponsible dodge, as Ms. Clinton well knows.
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