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:
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.
- 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.
- 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.
- 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.