The most dangerous feature in the president's proposed compromise on taxes is not the $700 billion tax cut for billionaires. It is the Trojan horse provision that threatens to destroy Social Security by undermining the longterm solvency of the social insurance system.
Barack Obama has proposed to knock two percent off the FICA deductions every worker regularly contributes to the Social Security Trust Fund, the money set aside for their future retirement benefits. Obama’s one-year tax relief sounds attractive and workers can surely use the money, but the consequences could prove deadly for the federal government’s most popular program.
Doubtless, that is not Obama’s intention—he regularly calls for strengthening Social Security—but the president has bought into a Republican proposition favored by conservatives who would love to do away with this New Deal creation. They know this will deprive the trust fund of $120 billion in annual revenue and that shortfall will sooner or later have to be made up to sustain future benefits. Can you imagine Congress finding $120 billion for Social Security amid all the other fiscal pressures?
For that matter, can you imagine Congress turning off this modest tax break for working people once it’s in place? If you believe that, you probably believe Obama is going to fight to recover the $700 billion tax giveaway to billionaires while he is in the midst of his reelection campaign.
Nancy Altman, a thirty-year policy expert and co-chair of Social Security Works, fears this perverse policy turn "will lead inexorably to killing Social Security." The right-wing agitators will renew their claim that Social Security is unsound and should be privatized, only now their case will have a little substance. Democrats in Congress should discard Obama’s proposal before it damages the crown jewel of the federal government.
Don’t count on Democrats for doing anything that principled. "Today’s Democrats fail to understand the program," Altman said, "and so are not only blind to subtle assaults against it, but seem to conspire in those assaults. With the Republicans and the Democratic president, perhaps unwittingly, conspiring to destroy Social Security, the American people don’t stand a chance."