The Democrats go left on Social Security because of Republican racism.
President Obama announced this week that Social Security should be expanded rather than cut, thereby joining a growing Democratic consensus on the issue, though I am sure the President is still not progressive enough for some.
“We should be strengthening Social Security,” he declared. “Not only do we need to strengthen it, it is time we finally made Social Security more generous and increase the benefits so that today’s retirees and future generations get the dignified retirement that they have earned.” The expansion, he argued, should be financed by “asking the wealthiest Americans to contribute a little bit more.”
In doing so, Obama is getting on board a movement that’s been brewing within the Democratic Party for a while now. Bernie Sanders, for instance, has introduced legislation that would increase benefits and pay for it by taxing payroll above $250,000 a year; currently, only the first $118,000 in income is taxed. Martin O’Malley responded with an even more ambitious proposal. Elizabeth Warren has been a particularly vocal advocate, proposing an amendment calling for benefits to be increased that every Senate Democrat, save two, voted for. Rep. John Larson (D-CT), Rep. Gwen Moore (D-WI), Sen. Brian Schatz (D-HI), Sen. Mazie Hirono (D-HI), and Sen. Sherrod Brown (D-OH) have each introduced their own plans.
Hillary Clinton has signed on as well, with a plan that would increase benefits for widows and people who drop out of the workforce to care for family members or raise children. That left Obama as the last notable Democrat not yet on board.
There are a myriad ways Social Security can be expanded, and a myriad ways the solvency of the program can be strengthened without raising the retirement age. So the argument within the party will be what benefits should to expand and how to pay for it, rather than cutting benefits or raising the retirement age. This is a huge victory for progressives and liberals in the party.
Who is responsible for it? You can argue that Bernie Sanders’ successful campaign has moved not only Hillary but the entire party and even the President left. Or, could Bernie be only part of the story, with the other part going back to the Grand Bargain days of 2011. Matthew Yglesias explains:
But in addition to a tactical win for the left, Obama’s turnabout on Social Security is the result of a cycle of tactical ineptitude on the part of the American conservative movement.
Five years ago, conservatives had the opportunity to get a Democratic president to sign legislation that would have substantially cut entitlement spending. In exchange, they were asked to agree that high-income Americans should pay higher taxes. They refused, thinking in part that preventing Obama from scoring a bipartisan achievement would make him easier to beat in 2012.
Obama was reelected anyway. Taxes on high-income households went up anyway. And now the politics of entitlement spending have shifted drastically to the left. The Republican Party’s 2016 nominee says he opposes cuts in Social Security benefits, and mainstream Democrats have flipped away from Obama’s openness to cuts to the position that benefits should be enhanced. […]
The progressive wing of the Democratic Party breathed a sigh of relief that right-wing intransigence had essentially bailed them out in 2011 and began a mobilization campaign that has now succeeded in pushing grand bargaineering out of the party mainstream. And Trump has taken over the GOP on a platform that disavows the party’s longstanding support for entitlement reform. [DD: Bullshit on that. Trump will end SS if he is President].
Of course, in life mistakes happen. But what’s particularly striking about this fiasco is there’s been absolutely no self-criticism about it. In the conservative imagination, failures to achieve policy gains are always the fault of perfidy and insufficiently rigorous adherence to the dogma. The idea that, at times, conservative true believers have erred by failing to correctly assess opportunities is never even considered, much less embraced.
The mass conservative freakout over increasing populations of minorities relative to the white population and the election of Barack Obama have saved the Democratic Party from itself. It reelected Obama in 2012. It nominated the worst Presidential candidate in American history. And it will elect Hillary Clinton president. It really is quite amazing. All because Republicans hate brown people.
But that only opened the door for Democrats to move left. The Party did the moving, with progressives, liberals and unions doing the pushing.
Caution: this is just talk and not actual leftward motion. We will continue to elect Dems who believe the opposite. But the shift in rhetoric is welcome, and it is good that it is finally coming from the bully pulpit . Let’s get it into the party platform! Not that the platform is binding, but at least a recognized mainstream Democratic committee would have to vote for or against it next month.
Is there anybody on the platform committee who is actually behind this, or did DNC veto them all?
Great idea except nothing is ever done on the backs of the “wealthiest Americans,” it’s always done on the backs of what’s left of the American middle class.
puck… I would imagine Bernie’s appointments to the platform committee will push it at the very least. And with Hillary and Obama on board, the rest of the committee will be on board for something. Yes, this is just talk and not action, understood. But its a step in the right direction.
Hillary too says she will “expand Social Security.” But based on her issues page, the only expansion she proposes is to “Expand Social Security benefits for widows and those who took time out of the paid workforce to care for a child or sick family member.” At least that’s something. But it is one more instance where Democrats seem to be trending left faster than Hillary can keep up.
How Elizabeth Warren Made Expanding Social Security Cool
Frankly, I don’t care much about whether Social Security is in the party platform. Sherrod Brown has had multiple bills introduced to strengthen and expand Social Security that need better endorsement and needs more Senators to sign on — like Coons and Carper.
The only Dems that deserve credit are the ones who supported expanding Social Security BEFORE the majority of cowardly and principleless Dems waited for the failure of the Republican Congress.
@DB “The only Dems that deserve credit…”
We’ll let you be in charge of handing out the little gold stars.
Even Obama, who once worked for a Grand Bargain, seems to have moved left on the issue, now calling for expansion.
@LE: “We’ll let you be in charge of handing out the little gold stars.”
Better me than you. I’ll give the stars to the ones who deserve them and not on the basis of what the establishment would like.
If this becomes a thing it is going to put John Carney in a real fix.
No, it won’t, Jason. Carney will be safely ensconced in Woodburn. Neither Brian Townsend nor Lisa Blunt Rochester will have to contort themselves to vote to strengthen Social Security benefits.
The current cap on Social Security wages is extremely regressive. I promise that the vast majority of those who earn less than the cap are unaware that it even exists.
Raising the cap significantly should be a no brainer but unfortunately there is not enough electorate awareness to force legislators hands.
^100% correct^
Classic Carney:
(1) I won’t discuss state issues because I’m too busy being YOUR congressman.
(2) I won’t discuss federal issues b/c I’m running for governor (even though I haven’t filed yet).
The. Worst.
@BL “Raising the cap significantly should be a no brainer…”
Actually, it is fairly complex. For this to work as you intend it needs to include ALL income, including carried interest. Otherwise, it’s just a tax increase for the top 15% and not the top 1%.
I’ll bet that Donald Trump pays no payroll tax whatsoever.
I’d support the change, but only if it wasn’t easy for the wealthy to skirt.
Not true. It will work as intended whether carried interest (and other forms of income) are included or not.
The perfect should not be the enemy of the good. I’ve heard that from a lot of Hillary supporters this year. You should take it to heart.
@a “It will work as intended whether carried interest (and other forms of income) are included or not.”
The stated intent was to make it not “extremely regressive”.
You’re not going to do that if you’re going to simply let the wealthy off the hook.
“…it’s just a tax increase for the top 15% and not the top 1%. ”
I’d take that deal.
Taxing percentages 2 through 14 while the 1% skates does not disqualify it as progressive. We have an entirely progressive income tax that already works that way. If you want the 1% to pay its fair share, equalize taxes on all income regardless of source.
Perfect. Enemy. Good. Jesus, it’s not that hard to grasp unless you’re trying not to grasp it.
@J “I’d take that deal.”
And you’d be leaving about 75% of its potential on the table. Bad deal.
You think that 15% wouldn’t help enlist the 1%? No justice no pizza!
How about this: we make the first 10K untaxed and we lift the ceiling to a million (or remove it altogether)We might not be getting to the 1%, but we are lifting some burden off of people making minimum wage.
There is lots of work to be done to re-define what is “income”. Just like the cap, most voters don’t know that working for your money is taxed a lot harder than having someone else working for your money.
What needs to be realized by a certain dunderhead here is that lifting the income cap and doing nothing else keeps SS solvent until 2075.
…and doing it right makes it solvent forever AND allows for the substantive changes that Hillary has been campaigning for (e.g. widows)…
Forever doesn’t actually matter. Each generation should find ways that suit the time. I don’t need to tell my great-grandkids how to run their house.
Funny, but your argument on the candidate was exactly the opposite.
Do you still not see that?
Don’t get me wrong, I’d prefer it to be perfect. But you’re saying a simple stroke of a fix until 2075 isn’t worth pursuing unless we make the 1% pay? That’s nuts.
@a “But you’re saying a simple stroke of a fix…”
That simple stroke of a fix is going to kick up a nasty political storm that a proper fix would not. Just do it right…
How do you figure that? The “nasty political storm” is as constant as Jupiter’s Great Red Spot. It’s easier to lift the income cap for SS than to make all sources of income for all purposes.
All I’m seeing from you is Trumpian word salad. What’s your fix, the one that’s going to tax the 1% properly, and how does it work if it doesn’t include all income from everyone?
Look… Maybe a 47%er like you doesn’t care who pays, but your proposing to dump this tax increase on the backs of the middle class (and yes.. a family earning $150k/year IS middle class), instead of on the class of known tax dodgers.
This would be just another shift of the total tax burden away from the top 1%. It’s not all that helpful, and it’s FAR short of the potential revenue of making the payroll tax less regressive.
I still don’t get how you figure that. This year’s SS base is $118,500. You stop paying SS payroll taxes after you hit that earnings number. If you eliminate the cap altogether, everyone with reported earnings income pays the SS payroll tax based on their total.
I get that we do have to fix what is counted as income, but even the government when they assessed the impact of eliminating the cap noted that it would make SS solvent for 75 years or so. That’s plenty to start, really.
@c “I still don’t get how you figure that. This year’s SS base is $118,500.”
Simple… What fraction of earning in excess of that is considered payroll?
Answer: Not all that much… maybe 25%.
And who earns that 25%… The peak of that distribution is probably at about $150k/year, tailing to zero at $118.5k, and tailing off at the upper end with too few to tax. I believe the the 2%ers start at about only $220k for annual family income.
And so that’s why I say this tax is getting dumped on the middle class, when it should be hitting the 1%ers.
Simple… What fraction of earning in excess of that is considered payroll?
Answer: Not all that much… maybe 25%
Imma need a link for that BS.
Also, note that this is taxed per earner, not per household. At the present time, two earners that make $118K each pay the tax on all $236K. in 2014, the top quintile of earners had a mean income of $194K.
But what you are arguing is that the Social Security Trust Fund economists are wrong about how solvent the change would make it.
Imma need a link for that BS.
Me too. Because Social Security payroll taxes are taken on your taxable income.
LE’s point(which is overstated), is that if you make your money on dividends, investments, rental income, etc., you don’t pay it on any of them.
Earned income, yes. But lifting the cap on just this is what gets the 75 years of solvency, so I still don’t get how this isn’t a good thing.
OK.. If you get basic numbers from here:
http://inequality.org/income-inequality/
…and plug them into a simple spreadsheet…
medium income 81-99% (top quintile less top 1%) — $152k
median income top 1% — $1260k
And so of the income in excess of $118k… 64% is earned by the top 1%, and that’s family income.
If you do the analysis with individual incomes, then it’s worse… more like 75%, and little of that income is payroll taxable.
@lg “LE’s point(which is overstated), is that if you make your money…”
AND that such exempt income accounts for about 75% of all income that could be taxed with an expanded definition of the payroll tax.
It’s a huge windfall for the 1%…
It’s difficult to get “basic numbers” from that link — since the CBO report the quintile data comes from bases its analysis on “market income”. That includes pretty much all income except for capital gains, and even this report notes that the data on the upper scale may abit unstable.
Still, it’s not a windfall. The system was never set up to capture anything other than earned income, so it preserves the current collection strategy. I don’t have a problem with taxing other income for payroll taxes, but I don’t know why you would it just lifting the current cap fixes the system for a few generations.
A 47% like me? ROFL. I retired early because I could afford to.
Someone earning $150,000 is “middle-class”? Only in your mind. That actually puts you in the top 5%.
Talk about class envy. Someone at the 5% level wants to stick it to those at the 1% level.
Very, very progressive.
I don’t know if you realize it, but the 1 percenters resent the .1 percenters, too, and they resent the .01 percenters. Does that make them “middle class”?
@a “Someone at the 5% level…”
Sorry… Guess again.
“…wants to stick it to those at the 1% level.”
Actually, the 0.1%.
I wasn’t guessing. You were the one who stated the figure, so I took it to be your income. I at least credited you for honesty. Meanwhile, your attempted insult about my financial status was based on nothing.
And you also used the 1% figure, not the .1% one. Again, I used your numbers.
The very term “liberal elite” is used by conservatives to indicate a person who is well-off but clueless. Your handle here was, intentionally or not, well-chosen.
If we’re going to more heavily tax the .01%, why is SS the place to do it? I don’t know what you do for that big salary, but I hope critical thinking isn’t involved.
@a “Meanwhile, your attempted insult about my financial status was based on nothing.”
Not nothing… The vast majority of retired people are 47%ers. It’s usually a fairly safe assumption. If you’re collecting SS, then you’re a 47%er.
“Your handle here was, intentionally or not, well-chosen.”
Well aware… It’s a triple pun/joke.
“why is SS the place to do it?”
Because its fundamentally fair. People get it, and it’s hard to argue against.
Making something non-regressive is not too hard to justify.
And for the record… You may have misread. I didn’t claim to be a 0.1%er… I said I wanted to stick it to that tax dodging group.
Good morning weirdo.
Conservatives are all for a flat tax, until you propose a flat tax for Social Security.
No, I’m not collecting Social Security. I said I retired early, meaning before 62. I’m not eligible for SS, and I wouldn’t take it yet even if I were. Once I do take it, it will not be the major source of my income.
Yes, what you are calling for is eminently fair. What’s it’s not is more politically feasible than simply lifting the earned income cap. For someone who was all about feasibility when it came to picking the nominee, you are curiously obtuse about it now.