Not that I'm expecting intelligence and insightful commentary from the likes of a Washington Post columnist but even this is something. The fact that Social Security is bankrupt is not the issue...in these guy's typical inside the Beltway thinking this is a opportunity for B Hussein Obama to be saved.
Michael Gerson - Social Security reform is the answer to Obama's problems - and the nation's
The main achievements of the lame-duck session of Congress were reminders of what might have been. President Obama gave something to get something. To secure a second stimulus, he accepted Republican economic methods. To pass the New START treaty, Obama offered assurances to Republican senators on nuclear modernization and missile defense. Contrast this with health-care reform, imposed in party-line maneuvers that left an aftertaste of ideological radicalism.
One, he didn't accept Republican economic methods. In true Republican, or more to the point Conservative economic methods we would have cut spending, cut marginal tax rates permanently and repealed Obamacare. Unfortunately the RINOs in the Senate caved...what a shock.
Obama offered assurances to Republican senators...his word is worthless...they caved...thanks Lisa from Alaska...and the RINO twins from Maine...with friends like this who needs Lindsey Graham.
...Overhauling the tax system seems the easier approach. It isn't. Most serious plans, including the options raised by the president's debt commission, would broaden the tax base, consolidate and lower rates, and eliminate most tax deductions and exemptions. But even a revenue-neutral tax overhaul would create a complicated system of winners and losers. Especially if the mortgage interest deduction, the charitable deduction and the child tax credit were modified or eliminated, the losers would know immediately who they are. The winners must be persuaded of abstract, future benefits.
There is only one true reform and that's either a flat tax or a consumption tax preceded by the repeal of the 16th Amendment. That will never happen...too much power would be stripped from Washington.
Republicans would have an easy time criticizing a thinly disguised tax increase for millions of Americans. It would seem like another Obama overreach that fundamentally changes the economy in frightening ways - confirming an image that the president desperately needs to change.
It's not the image that needs changing...he needs to change. And that will never happen.
...While Social Security is a relatively small contributor to future deficits, reforming it would be a large symbol and a logical place to begin...
...A member of the House Republican leadership recently told me that bipartisan Social Security reform could be written "on the back of a napkin" - which is essentially what Obama's debt commission did. It set out a plan that would cut benefits for high-income earners, make the payroll tax more progressive and gradually raise the retirement age (with a hardship exception for those engaged in manual labor).
Which is why that commission was worthless. Social Security needs to be reformed, i.e. changed at its core. What is it at its core...a Ponzi Scheme. It's not a matter of if it will collapse like the house of cards it is but when. And the basic failure of anything listed above is the assumption that money from increased payroll taxes will be used to support Social Security. It will be squandered like any loose change in Washington. Real reform will take the shape moving from the pay into a pot to pay current benefits to a pay into a "mandated retirement account" controlled by the taxpayer. Again, that is why it will never happen with Obama...that's real change and he doesn't want anything to strengthen the nation.
Obama's liberal base contends that the Social Security trust fund is not in immediate trouble. But this argument depends on an elaborate accounting trick. The trust ...is filled with debt issued by the government to itself. The surpluses of the trust fund are in fact liabilities for the government as a whole. And these illusory surpluses are regularly used to subsidize the rest of the budget. The scheme begins to collapse in 2037, when promised benefits for Social Security recipients will suddenly drop by about 25 percent - unless the system is reformed.
Thank you Lyndon Johnson...his accounting trick to hide the cost of the
War on Poverty...BTY what is the exit strategy for that...just an aside. But I am glad to see some kind of truth from the editorial page of the Washington Post. Yes, the trust fund is just a bunch of promises written by politicians (living and dead, Democrat and Republican) who will not be held to account. And these members of Congress don't care...they have their own plan.
...Social Security restructuring is not the obvious choice for Obama, but it is the smart one. It is achievable. It would invest Republican leaders in a constructive national enterprise. It would reassure global credit markets that America remains capable of governing itself. It would result in a more progressive, sustainable system. And it would make a dramatic, timely political statement: that the president is capable not only of expanding government but of reforming it.
If B Hussein Obama puts something like this forward I pray the Republicans are smart enough not come within fifty feet of it. I have my doubts...never underestimate the ability of the RINOs who run the party to screw up something obvious. Only in the mind of a Washington insider would giving Congress more money be reform...and the Post wonders why it's almost bankrupt.
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