I’ve been hearing a number of convoluted liberal critiques of Florida Sen. Marco Rubio’s call for a modernizing Social Security by (a) making it more generous to low-income households and (b) somewhat less generous to high-income households, (c) giving all workers who don’t have access to an employer-sponsored retirement savings plan access to the low-cost retirement savings plan that serves federal workers, and (d) encouraging people to delay retirement by giving older workers a large tax cut. Specifically, I’m being told that giving all workers access to the Thrift Savings Plan is somehow a secret plot to undermine Social Security, despite the fact that Rubio is calling for add-on savings that would simply level the playing field between low-wage and high-wage workers, and that the payroll tax cut is completely trivial, particularly when compared to a minimum wage hike (yes, this is actually what I’ve been hearing). And though I’m sorry to say it, I see this as good political news for the right, as it suggests that liberal lawmakers won’t be willing to simply mimic Rubio’s proposal. If conservatives are alone in calling for eliminating Social Security payroll taxes for workers who reach retirement age, they will have a very effective political weapon at their disposal. Keep in mind that President Obama has floated the idea of a switch to chained CPI for calculating the growth of Social Security benefits and setting the thresholds for marginal tax rates, a move that would substantially reduce growth in Social Security benefits while raising taxes on middle-income households over time. Which do you think is a better political sell?
by Reihan Salam