Campaign Desk has been hard of late on some MSM outlets that have presented lopsided views of the Social Security picture. So we were pleased to see that some other voices are now being heard.
On Friday, NPR’s All Things Considered aired a piece that raised questions about the payroll tax holiday the president negotiated with Republicans last week. That agreement calls for the payroll tax rate for workers to drop from 6.2 percent to 4.2 percent for 2011. The president said that would give some real money to people, and claimed that typical families would soon have $1000 in their pockets.
But how does the payroll tax cut square with the charges Social Security opponents have made all year: that the system is in desperate shape and running out of money? Now it will have even less revenue coming in. What happens next year, when the old tax rate is scheduled to go back up? Will the anti-tax crowd cry foul? Think about all the hullaballoo over letting the tax cuts for the rich expire. And if the tax cut does become permanent, what will that do in the long run to Social Security? Will there be enough money to pay all those who now receive benefits?
All Things Considered did consider the views of Nancy Altman, co-chair of the advocacy group Social Security Works, who argues that the tax holiday could lead to the unraveling of Social Security. Altman told NPR listeners:
“The Bush tax cuts were supposed to be 10 years. And we see now that it’s very hard once a tax cut is in place to repeal it. The fear is that once this cut is made it becomes permanent and all of sudden Social Security’s shortfall, which is very manageable at this point, would actually double.”
NPR brought in other voices that reinforced Altman’s point. Rep. Ted Deutch, a Florida Democrat, raised questions about financing Social Security from general tax revenues, which would allow opponents to argue for privatizing the system “in a way that they’ve never been able to make them before.” Deutch said he expected Republicans will try to make the tax cut permanent a year from now.
Republican Senators Bob Corker of Tennessee and Mike Johanns of Nebraska expressed similar concerns. “I anticipate that somewhere along the line somebody’s going to make that argument whether I agree with it or not,” said Johanns, who warned against “messing with Social Security.” So NPR tells us that Republicans may not be so monolithic after all.
USA Today also gave a nod to Altman’s position in a blog post shortly after Altman’s group and another advocacy organization, the National Committee to Preserve Social Security and Medicare, held a conference call for reporters. Wolf was on the call. The post quoted Barbara Kennelly, who heads the National Committee. She argued that mixing general revenues into the Social Security trust fund “will weaken the program.”
Veteran Washington journalist Tom Bethell was also skeptical in a piece he posted for the AARP Bulletin, a publication and website that reaches millions. Bethell pointed out that the tax holiday would put new pressure on the available money from general tax revenues “unless the $120 billion (the amount of the cut) generates so many new jobs so fast that an army of newly employed workers fills the coffers of the Internal Revenue Service with unanticipated tax revenue.” No one expects that to happen soon, meaning that Congress may have to borrow to make Social Security whole.
At this point it’s much too soon to know whether the curtain will really fall on Social Security after 75 years. But there’s little doubt that reducing the payroll tax carries a risk. It could prove to be the opening wedge in a new effort to change the face of Social Security.
We hope that last week’s crop of stories begins a dialogue that includes many voices. Everyone has a dog in this fight.
For more from Trudy Lieberman on Social Security and entitlement reform, click here.