Wednesday, December 7, 2011

Rough Rider: Obama's Payroll Tax Holiday

The politics of Obama's payroll tax holiday are so scrambled as to defy parsing. Sure we all like tax cuts, but I think we also all know that if a Republican president proposed cutting the funding for Social Security, you'd hear a lot more seniors-eating-dogfood talk from the Party of Compassion. Not only that, you'd hear a lot about how the evil right is threatening the stability of old folks' pensions. But, since Jesus Delano Lincoln (AKA The Rough Rider) is proposing it, I guess things are OK. Powerline looks at the implications:

The payroll tax extension is a political ploy, and little more. But how Republicans should respond to it is a serious question. I talked this afternoon with a senior Republican Senator who is appalled by the Democrats’ weakening of Social Security. In his view, FICA taxes are not just taxes, but contributions to a federally-sponsored pension program. Reducing those FICA contributions renders Social Security insolvent and unsustainable, not at some future date, but right now. It is not hard to see where this leads: it will soon become obvious to everyone that the Social Security numbers don’t add up, and are getting worse. The government’s response will be to means test Social Security (proposals to do so are already being floated). Once Social Security is means tested, it loses its status as a universal retirement system. Instead, it is just one more welfare program. That realization will cause Social Security to lose the broad public support that it now enjoys, and the program will, in some fashion, collapse. Those who don’t intend to be poor when they retire will refuse to support it, opting to save their money instead. 
So the Democrats’ opportunistic drive to cut FICA taxes is most likely a death knell for Social Security, as many liberal commentators have noted. How Republicans should react depends mostly on how one views the Social Security program. If you think Social Security is good and want to save it, like the Senator I spoke with today, you probably should oppose the Democrats’ proposal. On the other hand, if you think Social Security is an obsolete program, at best, that began as a fraud and went downhill from there–my own view–it makes sense to join with the Democrats in undermining the program’s financing.

First of all the term "payroll tax" lends itself to rhetorical shiftiness. If you called it what it is - a FICA tax holiday - I think you would hear a lot more agitation. 

More important, this is not an issue of right vs left, or liberal vs. conservative. It's the more basic issue of stability vs. disruption. As Hinderacker notes, there are plenty of Republicans who would just as soon leave Social Security alone, so that the people who have planned their lives and retirements around it aren't left in the cold like a communist pensioner. On the other hand, there are people like Obama who, having grasped the reins of power, are content to shunt money hither and yon, in a desperate bid to save...what, exactly? If a Democrat can't save Social Security from evil Republicans, what good is he?

I keep hearing that the president is so personally popular that he is near irreproachable from personal attack. Yet, this is how he is behaving. 

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