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The Ralph Rant
Republicans in Congress, even in the Tea Party influenced House majority, are on the verge of helping President Obama advance a stealth, liberal Social Security reform agenda, with no hearings, debate or national discussion about the agenda.
What President Obama calls a “payroll tax holiday” and wears the disguise of economic stimulation and job creation with government borrowing and spending is actually Obama's entry in the Social Security reform sweepstakes, and he's daring Republicans not to help him advance his Trojan horse for another year.
If Republicans don't go along, Obama and all of his supporters in Congress and the media will accuse Republicans of raising taxes, an accusation that scares Republicans more than any other, and one which they apparently expect a majority of voters to believe. They need to (1) understand what they are doing, (2) have the courage to resist it and (3) know how to reframe the issue to limit the damage.
There are many opinions, and even extensively detailed and debated proposals, on how to solve the impending solvency problem with Social Security. Traditional fixes have always included raising payroll taxes or reducing benefits, or both. A less traditional, conservative reform idea is to transform Social Security into a defined contribution plan like an Individual Retirement Accounts (IRA) that workers would own.
An idea that is never promoted in the open (at least not yet) because it would be so unpopular, is to leave payroll taxes and benefits the same and simply fund the unfunded benefits by increasing other taxes – that is, to destroy the carefully designed and protected balance between taxes paid during one's working lifetime and benefits received during retirement. That balance has been protected for more than 70 years for both political reasons and to respect the traditional American value that proud, able-bodied Americans do not want to be known as welfare recipients.
Never has this reform idea been debated in any congressional committee or the floor of either chamber of Congress, and yet we have planted the foundation for a reform plan even more liberal than that, and are about to let the cement harden for another year.
If Democrats, with Republican help, can extend the payroll tax holiday long enough and make the cuts deep enough, they will have established a substantial precedent, both in terms of size and duration, for solving Social Security's solvency problem by funding any unfunded liabilities with taxes that are at least as progressive as the federal income tax.
But that's not all. Not only will they fund the unfunded liabilities with the most progressive tax revenue stream, they will increase those unfunded liabilities by reducing the payroll tax, thus making it necessary to raise other taxes even higher, and using the government to redistribute even more income.
For now, liberals can justify using other revenues, because of the debt the Treasury owes to the Social Security Trust Fund (thanks a lot Greenspan Commission). But, when that runs out – and it will run out faster with every year's extension of the payroll tax holiday – Congress will be forced to address the solvency issue.
Will they raise the payroll tax then? What – Republicans raise taxes? Or cut benefits? What – Democrats cut benefits? Or will inertia have firmly set in, and they will formally adopt a “reform” that is least disruptive by simply transferring a large portion of the legal liability for Social Security benefits to “where it will have been for the past many years anyway.”
That is what Republicans will be helping if they vote to extend the payroll tax holiday. Granted, it will take courage to vote “no” but the stakes are very high.
President Obama will never admit what he's doing. It's highly unlikely anyone in the mainstream media will recognize it, or report it if they do, so most people will have no idea that voting to “raise taxes” this time is any different than any other time. Republican voters accept few excuses for raising taxes, and that is as it should be. There is rarely a legitimate reason to raise taxes – to get more revenue for the government from the same amount of income or other assets owned by the population.
But the payroll tax should never have been cut except as part of a more thoughtful Social Security reform plan that had been fully debated, keeping in mind the traditional relationship between payroll taxes and benefits, and the reason for that relationship, which should not be changed without full and open deliberation by Congress. It is better to correct a mistake before the mistake takes on a life of its own and becomes the default reform plan that you would never have knowingly approved.
Unless Republicans in Congress see what's happening and stop it, ten years from now, when President Obama is musing about his legacy, it won't be Obamacare that he's most proud of. It will be his success at tricking Republicans in Congress into helping him adopt more progressive Social Security reform than any liberal politician had even dared bring up for debate. He may go out in 2012, but unless Republicans stop him now, he will go out with a bang louder than they could ever have imagined – and they will pulling the cannon.
My advice to Republicans in Congress is to vote against extending the payroll tax holiday and tell constituents, “I'm not voting for a tax increase. I'm voting to stop a dangerous experiment that is designed to implement radical, liberal, self-perpetuating reform of the Social Security system that has never been debated or even proposed in Congress. I will have no part of it even if it means demagogues will accuse me of raising taxes, and surely they will.”
If Republicans do what no talking head inside the Beltway thinks they have the courage to do – that is, to end the Payroll tax holiday, they will accept Obama's challenge to meet him on the political battlefield of what he calls “the defining issue of our time.” On that point, the president is right. The House should accept his challenge.
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