Ten Things Dems Could Do to Win
1. Raise Social Security to 50 percent of working income.
Let's stop saying we will "save" Social Security. Don't save it. Raise it. Let's push Social Security up to 50 percent of people's income. It's down at about 39 percent now. Of course we can't do this overnight, but we can set it as a serious goal. Here at last we would be doing something for our base. I mean, who are we for, right? Yet even on "our" side, the cognoscenti want to cut it. Even Barack Obama spoke in his 2009 State of the Union address about "strengthening" Social Security—by which he meant cutting or at least capping it. Fine, we're running a deficit. Go ahead, listen to "respectable" voices, all the Congressional Budget Office types. But we're the Democrats. Who are we for? Private pensions have disappeared. People's homes have lost value or are in foreclosure. Don't tell me how Social Security is more generous than ever. With the collapse of the private pension system and the popping of bubbles, we need to expand the public pension system as never before.
"Wait. It will be tough enough to make the current system solvent. Where's the money to come from?" Let's put aside the fact that Social Security is solvent—or at least sure to be solvent until 2040, which satisfies me but not kids in their 20s. Fine, let's fix it for the long term as well. But as long as we're going to take the heat to make the current system "solvent" even for people under 40, i.e., to "save" Social Security even for them, we might as well raise it, too. After all, our real base voters are more likely to get off their couches and vote for us if we burn into their brains that their worst worries about retirement are over. There are three sources of a fiscal fix, not just to save but to raise it. The Democrats should propose all three:
First, restore the estate tax that existed in the 1950s and '60s and dedicate the proceeds to the Social Security trust—as Robert Ball, former Social Security commissioner, once proposed. (One might think of it as a backdoor form of means testing. At least we should get back the Social Security we paid the deceased.)
I know, "A majority of Americans oppose the estate tax." Let's find out if they do if it means they don't have to worry about dying broke.
Second, lift the cap on the Social Security tax (it's at $90,000 now) so it applies to all incomes. After all, Social Security is for everyone. If people above $90,000 are in it, then they should be in it all the way.
Third, cancel the huge tax deduction on the most wasteful sorts of corporate debt, especially the kind used for speculation and leveraged buyouts. Dedicate that new revenue to raising Social Security. It's a deduction we should get rid of anyway, for good and independent reasons. It's that deduction that has encouraged the leveraged buyouts and looting of corporations by private equity funds and all the other speculation that caused Wall Street to crack up.
"But in the long run, don't we have to raise people's taxes, especially to get above 50 percent?" Yes, I admit, we do have to raise the tax. Right now, I would not propose to go immediately to 50 percent. But there's nothing wrong with this increase if people grasp that they are spending it on themselves—that was the flaw in the Obama healthcare plan, where the higher taxes went solely to "other people."
"But there's a generational equity problem. We're asking the young to subsidize the old." So David Brooks complains. That's his kick against the welfare state. Why is that a problem? Since the time of Adam and Eve, that's why people have had children—to support them in old age. Besides, would you as a young person rather pay for Mom and Dad out of your own wallet? Raising Social Security does plenty for the young—and they are freaked out about their retirement too.
Then it might be easier to cut healthcare costs.
Why is it that in European social democracies people spend far less on healthcare but are healthier at every income level? Thanks to better pensions, they have healthier lives.
In short, if we wanted to cut healthcare from 17 percent of GDP and wean our base away from endless visits to doctors, we might try giving them bigger pensions on which to live. They might accept caps on Medicare if it meant we could give out bigger pensions for healthier lives.
Democrats! The next time we promise a cutback in Medicare, let's promise that the savings will go to raising Social Security in return.