USA TODAY International Edition
Our view: Social Security plan robs from future to pay for past
To anyone who has perused the federal budget, what sticks out is not the things like border fences that Washington is so obsessed with. Rather, it is the vast and growing sums government spends on benefits such as Social Security, Medicare and Medicaid.
In the next fiscal year, these “mandatory” benefits, plus a few unbudgeted programs like farm subsidies, are expected to account for nearly 62 percent of all spending, far exceeding national defense (15.7 percent) and interest on the national debt (9.7 percent).
In fact, the federal government might best be described as a nucleararmed, if woefully underfunded, health care and retirement provider. The Congressional Budget Office estimates that in just 10 years, half of all federal spending (except for debt service) will be benefits to senior citizens.
It comes as a bit of surprise then that one of the first things out of the gate for the new Democratic House majority is a plan to expand the granddaddy of all benefit programs, Social Security.
A measure reintroduced this month would provide an immediate acrossthe-board benefit increase of 2 percent. It would also raise annual cost-of-living hikes and provide a larger minimum benefit for those who toil many years with low pay.
This is not a fiscally responsible approach for a program already an actuarial horror show. This year, Social Security benefits paid out are expected to exceed taxes paid in by about $82 billion. In a decade, that operating deficit will top $300 billion and swell by midcentury to nearly $1 trillion.
While the Democratic plan would pay for the increases, and in fact put the program on more solid long-term footing, it would do so at a staggering cost. The measure would gradually increase the 12.6 percent payroll tax to 14.8 percent on income up to its cap, which now is $132,900. The new rate would also apply to income over $400,000.
Every penny this tax increase raised would be a penny that does not go toward deficit reduction or urgent causes Democrats claim to care about.
Young people are struggling to pay for college. Day care costs keep many women out of the workforce. Infrastructure is crumbling. High-speed rail and mass transit expansion are largely a pipe dream. Blue-collar workers often don’t have the skills they need. Climate change is unaddressed. And medical costs remain a nightmare for many.
In this context, why would Democrats want to use what might be the last big bite of the tax-hike apple and apply it to yet more money for seniors?
The cynical answer is that older people vote, and Democrats want to buy them off. But transferring even more money from young to old, working to retired, is not good for the economy and not good fiscal policy. To put it in terms that Democrats might understand, it robs from the future to pay for the past. That is hardly progressive.