I want to dissect one paragraph from Barack Obama's address to the AARP and how he would "fix" Social Security's long-term funding problems:
Right now, the Social Security payroll tax is capped. That means most middle-class families pay this tax on every dime they make, while millionaires and billionaires only pay it on a very small percentage of their income.Yes, and as I've written many times before, the benefits they receive are also capped. Social Security is a proportional system in that you're supposed to get back a benefit in line with the taxes paid into the system. If billionaires pay more, will they get more? Obama steadfastly refuses to say.
That's why I'll work with members of Congress from both parties to ask people making more than $250,000 a year to contribute a little bit more to keep the system sound.Oh, he's going to "ask" them. Isn't that polite?
It's a change that would start a decade or more from now, and it won't burden middle-class families. In fact, 99% of Americans will see absolutely no change in their taxes - 99%.The other 1%? Screw 'em. We need the cash.
Social Security, for all its faults, is the last bastion of universality in the federal government: everybody in America receives a benefit proportional to what they put in. Obama's plan would change Social Security traditional role and turn it into a welfare system; and even with the massive tax increase, his plan would cover less than half of Social Security's 75-year shortfall.
Here's former comptroller general David Walker describing the "fiscal cancer" that America is facing unless we address entitlement spending:
What will Obama do for now? Well, it's campaign time:
"The thing about a doughnut hole is that it is empty," Howard Gleckman, editor of TaxVox, the blog of the nonpartisan Tax Policy Center, wrote Thursday. "There is nothing. And that, it seems, is what is left of Barack Obama's plan to fix Social Security." He added: "Make no mistake, what Obama is really saying is that, at least for the campaign, he is walking away from Social Security and all of its problems."