The funny thing about third rails in politics is that there are many of them. Senator Marco Rubio seized two important ones on Tuesday. If the quality of his ideas this week are any indication, we believe he’ll live to do so again.
His comprehensive speech addressed how the federal government ought to support the elderly, laying out a plan to shore up Social Security and explaining and endorsing Paul Ryan’s approach to Medicare reform.
The two key planks to Rubio’s Social Security proposal are a gradual increase in the retirement age, tied to increases in American life expectancy, and a change to the growth of benefits. He wants middle- and high-income Americans to see their benefits grow more slowly and the poor to see their benefits grow more quickly. He also would eliminate payroll taxes for workers over the age of 65 and eliminate an antiquated reduction in benefits for beneficiaries who opt into the program early but keep working.
Undergirding these ideas is a positive conservative vision for Social Security. Explaining that it has served his family well, Rubio argued Social Security ought to be a strong, reliable safety net that encourages, not discourages, work and economic prosperity. And with millions of seniors still living in poverty, the system ought to be more generous for those who are still slipping through the cracks.
Parts of the 80-year old Social Security system, including its “earnings test” for retirees aged 62 to 65, are actually structured to push Americans out of the workforce. Economists once thought that getting older workers to quit was a good way to create jobs for younger workers, an idea that has since been entirely discredited. People who are well enough and willing to work through their 60s and into their 70s should be encouraged to do so — especially since our country has an aging population and shrinking labor-force participation.
Stronger economic growth, as Rubio explained, is the best way to help close the gaping hole in Social Security’s budget picture. But on its current trajectory, the program’s trust fund will be exhausted, and benefits will be legally cut by 25 percent, just a couple years after Senator Rubio reaches retirement. As the program consumes an ever-larger portion of the federal budget, he’s right to suggest adjusting the growth of its benefits now. Without more specifics, it’s hard to say if Rubio’s ideas will bring the program into actuarial balance for the long term. But it would certainly close much of the funding gap, even if it doesn’t go all the way.
The Left, meanwhile, is increasingly suggesting that we open the gap wider. Senator Elizabeth Warren, who’d like to adopt a more generous (and highly unreliable) way of adjusting benefits for inflation, has offered no explanation of how she’d pay for it. She argues that Americans are undersaving for retirement — which is true, though it’s not as serious a problem as she believes — and suggests averting the crisis by having the government pretend to save for them. Rubio has a better answer here, to open up the efficient, lightly subsidized Thrift Savings Plan, a kind of 401(k) for federal employees, to Americans whose employers don’t offer a retirement plan. Plenty more can be done to encourage savings, but it’s one of the cheapest ways to help make the working class into asset owners and savers.
If Democrats just want to preserve Social Security as is without the kind of changes Rubio has proposed, it will soon mean ruinous new taxes, or less spending on proper federal priorities just to feed the welfare state. Which typifies much of the domestic-policy thinking of American liberals: defensive, myopic, and uncreative. Marco Rubio’s conservatism is just the opposite.