Monday :: May 16, 2005

Congressman Wexler Boldly Steps Out With A Simple Democratic Alternative On Social Security

by Steve

I’m going to stick my neck out today and congratulate Congressman Robert Wexler of Florida for being the first Democrat to offer a Social Security alternative. Put simply, Wexler’s “plan” is to eliminate the current $90,000 withholding tax ceiling altogether, and tax all income above $90,000 at a reduced rate of 6% total, half (3%) paid by workers and half paid by employers. Wexler claims that this move by itself eliminates the Social Security funding gap for 75 years, and it does so without cutting benefits or raising the retirement age. And it does it without private accounts altogether.

Wexler’s plan has the advantage of being supported by the public in various polls, in which the public has said the only solution they support involves raising the withholding tax ceiling, whereas raising the retirement age and indexing benefits into a welfare program model is opposed by a majority of those polled. Wexler coyly taxes the wealthier income brackets at a lower level (3%) than income up to $90,000 (6.2%), which immediately undercuts the Muckdog argument of “woe is me; why should I have to pay taxes at all on income above $90,000” while at the same time showing voters and especially the wealthy that a welfare model of indexing benefits isn’t needed to make the system solvent. It should also be pointed out that in 1983, 90% of all income was subject to Social Security taxation, whereas now less than 85% of all income is subject to taxation. Wexler's proposal is an attempt to deal with a tax fairness issue as well.

The White House has already come out and welcomed the idea, which is a long way from supporting it. Frankly, it appears that Bush and Rove are glad to have anything at all to push back against, but their initial refusal to trash the proposal as just another Democratic tax increase undercuts their ability to do so later. Democrats are unhappy with Wexler because he jumped out with a solution before Bush took private accounts off the table, which wasn’t going to happen anyway.

Aides to the top House Democrat and the Senate Democratic leader predicted that Wexler would not draw much support from others in the party.
"He's a party of one on this," said Jim Manley, spokesman for Senate Minority Leader Harry Reid (D-Nev.).
Jennifer Crider, press secretary to House Minority Leader Nancy Pelosi (D-San Francisco), said, "This is not the Democratic plan."

Excuse me, Ms. Crider. What exactly is the Democratic plan? What is wrong with saying as Wexler does that the Democrats are against private accounts and their debt, against cutting benefits, against raising the retirement age, and that raising or eliminating the income ceiling is an essential outcome to ensure the solvency of the one leg of the three-legged stool that Bush hasn’t trashed? What’s wrong with saying that Bush’s plan will lead to the destruction of the Social Security system and that Bush and the GOP cannot be trusted to “fix” Social Security?

Steve :: 8:19 AM :: Comments (22) :: Digg It!