Hoyer Says Social Security "Reform" Possible This Year

by: Chris Bowers

Wed May 06, 2009 at 15:47


In case there was any doubt Social Security "reform" is on the table under the Democratic trifecta, Majorty Leader Steny Hoyer should have erased it today:

House Majority Leader Steny Hoyer (D-Md.) said Wednesday he's "hopeful" that Congress will reform Social Security, Medicare and Medicaid later this year, after lawmakers deal with contentious healthcare reform and energy bills.

"I'm hopeful this fall that we can focus on the entitlement issues," Hoyer said during a speech at a summit of fiscal health experts. "One of the reasons my being here today is to sort of set down a marker that we ought to be discussing that."(...)

Hoyer also told reporters that there was "no formal plan" to take on Social Security reform. "We're certainly not going to look other issues for August other than those two issues" of healthcare and energy," he said.

While there is "no formal plan" for Social Security reform, for the Democratic House Majority Leader to be speaking in these terms shows that there is real, and increasing, movement toward Social Security legislation. After the health care and energy fights later this year, Social Security and Medicare will probably be on the agenda for 2010.

Even though Social Security will be able to pay out 100% of benefits until 2042, this time around I think progressives should not take a completely opposition tack to engaging in Social Security "reform." Instead, we should be pushing to significantly raise, and eventually eliminate entirely, the wage cap on Social Security taxes. The reasons for this are three-fold:

  1. It is popular: Back during the 2005 Social Security fight, the only changes to the system for which public polling consistently showed greater than 45% support was raising the wage cap on Social Security taxes. All three times the question was polled, it received 60%+, 2-1 support. It is the consensus solution among Americans at large.

  2. President Obama campaigned on it: President Obama campaigned on raising the wage cap on Social Security taxes. As such, this is a position where we both have Presidential support, and where we can push President Obama to keep a campaign promise.

  3. It would end "Social Security is going broke" talk forever: If the wage cap was not only raised, but eliminated entirely, and if the additional revenue generated from wages currently beyond the cap were applied to benefits in a means-tested manner, then Social Security would be solvent for centuries. (Note that the only mean-testing I am proposing is on wages currently beyond the cap, not on existing Social Security tax revenue.) In this way, we can achieve a permanent victory on Social Security, which is far preferable to having this argument flare up every five or ten years.
As such, rather than pushing the "there is no crisis" line ala 2005, we might be better off pushing for an elimination to the wage cap on Social Security taxes. It is popular, it has big-time institutional support, and it would give us long-term victory surpassing even what we achieved in 2005. Seems like the smart play to me.
Chris Bowers :: Hoyer Says Social Security "Reform" Possible This Year

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4 )) -"Seems like the smart play to me." Perfect (4.00 / 2)


--

The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky


I agree (4.00 / 4)
but instead of applying it to the system forever, I'd cut the payroll tax rate at the same time as completely eliminating the cap.  In this way, we can cut taxes for the vast majority of tax payers and provide more money for the system at the same time.  Win win.

I agree (4.00 / 5)
Let's engage in this debate and demand that the cap is eliminated to Strengthen Social Security. Let's beat the conservatives to organizing and organize behind a popular, smart alternative that will make SS solvent for decades more to come.

Let's get going. Pay for a poll to show this is the most popular option. Come up with some slogans. Basic tools for LTEs, calling Congress, e-mailing Congress, petitions and faxing Congress costs roughly 5k initially and 1k additional per month depending on how much of that you use.

We can't lose the battle over the most popular and successful social safety net in our country.  

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What Social Security problem? (0.00 / 0)
I guarantee that if it becomes clear that the only politically viable "solution" to the social security "problem" is to raise the cap, Republicans will quickly drop the whole topic. It will go from "We must fix this grave problem immediately!" to "Whatchoo talkin' 'bout, Willis? Who said anything about a problem?"

miasmo.com

[ Parent ]
"rare opportunity" -- and we know Obama wants to "reform" it when it's not necessary at all, too -- (4.00 / 2)
http://www.washingtonpost.com/... --
... Hoyer and Graham said Obama's election and the nation's fiscal crisis have presented lawmakers with a rare opportunity: at the very moment when the public is focused on the dangers associated with a rising federal debt, the nation has a president adept at communicating the need for sober action.

"At the end of the day, most Americans would embrace a balanced solution that did not require Draconian impact. They are ready to make some hard decisions for the benefit of future generations," Graham said. "If there were ever a time to do it, it's now."

just disgusting that Democrats will be the ones to kill it -- appalling.


it's absolutely idiotic to let them touch SS, given that it's fully funded til 2040 -- (4.00 / 5)
agreeing to any changes with this Congress will not result in what you want in any way at all.

they will not increase the payroll wage cap -- they are owned by the wealthy entirely.


No means testing!!!! (4.00 / 9)
We cannot make social security a welfare program... The reason why it is so popular is that everyone benefits from it equally...  The one sure way to make social security vulnerable is to have a large group of voters pay for it, yet unable to access its benefits.

The late Sen. Moynihan was vehemently opposed to means testing social security for that very reason, and I agree with him completely!

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!


only partial means testing (4.00 / 2)
the only means testing i am proposing is on wages beyond the current wage cap. belief that such means testing is almost certainly implied by the overwhelming support for raising the cap. if the new revenue wouldn't go to shoring up social security for the rest of the country, then raising the cap wouldn't help at all.

besides, that people making over $100K a year currently do not pay as much in social security taxes is already a form of means testing for the program. so, it already exists in some form.


[ Parent ]
Won't work (4.00 / 5)
There is no such thing as "partial" with Republicans.

Hoyer is one of the worst Democrats in either House of Congress combining conservative "values" with sleaze and stab in the back tendencies.  If Hoyer is pushing this it is horrible.

My biggest reservation with Obama during the campaign was that he would sell out social security for fake reform.  Don't touch it in a deep recession.  Not one bit.


[ Parent ]
If anything... (4.00 / 4)
We ought to be increasing benefits. As it is, social security is a half-assed measure.

[ Parent ]
I tend to agree with you, Mike (4.00 / 1)


[ Parent ]
This isn't affecting pay-outs, only pay-ins (0.00 / 0)


[ Parent ]
Guess what Chris? (4.00 / 5)
You and the "progressive" left actually have very little control over how this debate proceeds, and what kind of "remedy" is imposed, once you concede the crucial point that SS is a problem that must be fixed.

Is it in any way obvious that the "moderate" Dems in Congress will be happy simply to impose your own preferred solution, the removal of the wage cap? What if they think that it's important to cut benefits as well, as some kind of "compromise", or partially privatize, or God only knows what?

If these moderate Democrats start suggesting their terrible remedies, and start getting heard, are you going to admit any responsibility for being among those who would have opened the door to those kinds of pernicious plans? Or are you going to say, Oh, but that isn't what I had in mind at all! Oh, those terrible Democrats -- who could have anticipated they would do such a low and despicable thing!

And you are being completely naive to think that a new "crisis" can't be manufactured for SS by the right wing in the future. The best evidence? That they are now able to claim there's some kind of urgent crisis, when SS is clearly stable until 2040 or beyond -- perhaps indefinitely beyond.


If caps are cruise control for cool (4.00 / 1)
What are scare quotes?

Seriously, lay off the "scare quotes" and you won't come off like a "crank"


[ Parent ]
But that's the genius of this approach -- (4.00 / 2)
if there is a crisis, then we must raise (or eliminate) the cap.

If no one wants to touch the cap, there must not be a crisis. It's a "put your money where your mouth is" kind of deal.

Montani semper liberi


[ Parent ]
The key (4.00 / 2)
is to oppose benefit cuts (including changing retirement age).  Adjusting the cap would be the natural route if the line is held against benefit cuts.

there is no crisis (4.00 / 3)
we should push that line because it is the truth and we should never deviate from the truth. I hope that Maryland bloggers will hold Steny accountable.

A good offense is a good defense. (4.00 / 1)
 I think it is brilliant. We want the cap raised to the top, but we're willing to do in stages.   The art of compromise is to ask for the moon.    

OT: I don't want to be cranky... (0.00 / 0)
... but if the Quick Hits are gong to be in the prime position of front page, right column, then they really ought to work.  

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

This Needs More Thought--And Coordination (4.00 / 3)
I'm as anxious as anyone to see us go on the offensive, for once.  But I'm not sure that the apparent opening is actually there.

Yes, Obama mentioned raising the SS cap during the campaign.  But it's not like he invested a whole lot of capital in it.  And it's not like he hasn't backed off a whole lot of what folks have expected from him.

A united front of "No!" was able to stop Bush dead in his tracks.

I'm talking about George Sr. pushing for NAFTA.  And Bill Clinton got it done where a Bush could not.

This could easily be a repeat, if Obama & Co. can divide the defenders of Social Security.

So, what's needed to prevent that, at a bare minimum, is coordinating and strategizing about how to push for positive change without providing a huge hole for the destroyers to rush right through--and be very aware that their primary target isn't Social Security, it's Medicare.

So, while I think the argument here is a good one, I think it only gets the real conversation started.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3


This bit is key to this situation (0.00 / 0)
I'm talking about George Sr. pushing for NAFTA.  And Bill Clinton got it done where a Bush could not.

Obama is clearly in this same position, if not more-so. I agree that a united front is needed. But I also think we need a position from which to pivot, rather than simply trying to take them head on with "NO!"

This triangulation/co-optation thing can work both ways. Consider what the average American is going to be thinking about their golden years when they see that their pensions have been looted by Wall Street. Also consider that their homes won't be worth what they paid for them, their stocks/bonds won't be worth squat either. The very idea of retirement is disappearing for millions of people as we chat about this. There's a powerful constituency in this, in terms of big numbers.

A lot of middle class people, even upper middle class, will start seeing it as their own survival NEED instead of some quasi-welfare program as the media so adroitly frames it.

I like Chris' take almost completely, although I wouldn't means test anyone who isn't really wealthy. Upper middle class is going to mean something different in a a few short years. It's important to include as many people as possible. FDR knew as much.

If the ruling elites are dumb enough to bring this up anytime in the next few years, it will be our duty to clobber them when they do. This could be a huge opening in terms of getting the progressive message out there in a big way.

You're right about the conversation, though. This needs a lot more attention, not to mention a broad coalition.

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates


[ Parent ]
Hoyer was the original target (4.00 / 3)
of Accountability Now, if I remember correctly, for his starring role in the FISA debacle.  I'd like to see that challenge renewed.

Hoyer is relentless in pursuing initiatives that the public, Democratic activists, and the rank and file oppose. He has been a primary obstacle for progressives in the House, including Speaker Pelosi. He is antithetical to the interests of everyone but K Street.  One would be hard pressed to even imagine a Democrat who would not be better replaced by anyone - because in his position as Majority Leader, he wields influence far beyond a single vote.  

Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.


raise the minimum wage... (4.00 / 3)
another way to extent the life of the social security trust fund is to raise the minimum wage.  

The "problem" with raising the wage cap is that you either have to change the formula for social security benefits (creating an "arbitrary" benefit cap) or see little real long term advantage in raising the wage cap.  

But raising the minimum wage substantially increases income to the trust fund by increasing taxable wages, but does so with minimal impact on future benefits because those benefits are based on a person's 30 best years of income, and minimum wage years tend to not be part of the "best 30 years".


Both Make Sense (4.00 / 2)
The minimum wage increase needs to be indexed to inflation, so it's not just routinely eroded.  

Reworking benefit formulas for the top earners wouldn't really be that hard.  They've got these new things called "computers."

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3


[ Parent ]
Another problem: the self employed (4.00 / 2)
I think there has to be a way to alleviate the effect of social security taxes on self employed workers at the lower income levels (less than $100,000 of net income). In a country that prides itself on entrepreneurship, the reality is that fewer people go into self-employment each year. And the two main reasons for this may be the crippling effects of quarterly FICA payments (believe me, it's fraught with tensions) and then (of course) the daunting challenge of finding affordable and reliable health insurance.

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[ Parent ]
Kudos to Bowers (0.00 / 0)
This will be the first year in a long long time that Social Security will pay out more than it collects (if it ever has); again, 2042? Let's not kid ourselves.

The plutocrats pay less tax than the serfs; making them pay more to support wholesome and just endeavors is the sine qua non of the Progressive movement. Eliminating the cap does that.


I agree that the only "reform" to Social Security that should be allowed (4.00 / 3)
is raiding the payroll cap. But that doesn't mean that it should be raised. Not now at least. Here's why.

According to Krugman, Baker and some other progressive economists, not only is Social Security almost certainly solvent for another 30-40 years (i.e. between payroll taxes and the trust fund--which DOES exist in the form of T-Bills that the government MUST pay back on time--there should be enough money to pay out at 100% of currently promised benefits), but it's quite likely going to be solvent well beyond that.

The thing is, those CBO and SSA forecasts that project that Social Security will not be able to pay out at 100% beyond 30-40 years are based on fairly anemic economic projections over that whole period, which is highly unlikely to happen (and if it does, we're going to have much bigger problems than Social Security). More realistic forecasts push this "insolven" date out several more decades, and possibly out to infinity. So there might not be ANY problem with Social Security, now or ever, as it's currently set up.

So before we go ahead and push for raising the payroll cap, we should first be sure that the extra revenue is even needed. Social Security should be neither under nor overfunded. And in case anyone's thinking what's the harm in being on the safe side, well, I can think of several reasons why:

1 - This extra revenue will be loaned out to the government in the form of T-Bills, which will only make it easier for it to overspend on a bloated defense budget and whatnot.

2 - This extra payrol tax will be serviced through general revenue, meaning the very people who are or will be collecting Social Security will partially pay for it themselves, above and beyond payroll taxes.

3 - Every extra dollar that you collect in the form of one kind of new tax is a dollar that's much harder to collect in the form of another kind of tax, for both political and economic reasons. Perhaps, especially if this extra revenue isn't needed to keep Social Security solvent, it would be better to collect it in the form of higher marginal tax rates on the very same people who'd be paying this extra tax, to pay for a public health plan option, alternative energy development, or paying down the debt.

4 - Raising taxes has a political cost, and should only be done if fiscally justified. It's debatable whether it is here.

I'm all for raising taxes on the rich and corporations to pay for all sorts of vitally necessary programs. They're way too low and are hurting our country and economy. But we have to make sure to only raise them to the extent needed, and in ways that make the most sense. There's only so much extra tax revenue to be had, and it should be gotten with the maximal fiscal and national benefit, and minimal political and economic damage, possible. And only when and to the extent justified.

Social Security doesn't need to be reformed. Not now at least, probably not for a long time, and possibly not ever. Instead of compromising with the "reformers", we should just stop them completely. No triangulation needed here.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton


they're already eliminating the COLA raise, which hurts Medicare as well -- (4.00 / 1)
they've already shown their hand on this -- it's about cutting benefits and social programs -- not about making anything more equitable taxwise.

Social Security Tax Income Cap Removal (0.00 / 0)
This idea has been around for a long time without gaining traction.  It's a good idea and has lots of possibilities but the opposition to it is incredible.  Maybe now that a mainstreamer like Hoyer is nibbling at the edges it's an idea whose time has finally come.  Nevertheless it will take a very visable showing of overwhelming public support to overcome the vested interest opposition that has been around long enough to know which buttons to push.

David A. Blythe

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