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Why NOT Dip into Social Security?
August 28, 2001
by
JB
Reports circulating the Internet indicate that George Will
used the above words on "This Week" on ABC. I am presuming,
out of rank cynicism, that he did not intend this as a joke.
So we have sunk to this point? We are actually being challenged
to explain why Social Security ought not be dipped into to
pay for other budget priorities, primarily the tax cut, defense
spending, and Bush's pet projects. So we've gone from promising
not to touch Social Security to asking, why NOT touch it?
In case anyone missed it, this is what logical, right-thinking
Republicans term to be the unfair asking of the listener to
prove a negative. (Though they certainly spared no amount
of hot air demanding Gary Condit prove his innocence on national
television.) It's not just O.J. Simpson now. Social Security
is undergoing Trial by Media, and is to be excecuted by lethal
injection if it cannot prove its innocence before a jury of
pundits.
The first argument why not to dip into funds intended for
Social Security - which is somewhat different from Social
Security itself - is that it's simply not intended for other
purposes. Republicans would be the first to argue (if it suited
their current political purposes) that Social Security was
intended as an insurance program that would pay for itself,
not be a liability on the rest of the tax system. Consequently,
money raised for Social Security ought to be used for Social
Security, if at all possible.
The second argument - which Democrat politicians who did
not follow this argument while Congress was in the bad old
days do not want to draw much attention to, at least not unless
they must - is that Social Security contributions (otherwise
known as payroll taxes) are regressive taxes. This means that
they are nowhere near as progressive (i.e. fair) as income
taxes: the working poor, who do not even qualify for income
tax (or income tax "refunds", which are actually advances,
if you didn't know), because they're so poor, are particularly
hard hit by payroll taxes. Using this money, collected with
one of the least fair, least poverty-friendly taxes on the
books, as Monopoly money, is more than a little frightening.
Quite simply, using surplus Social Security contributions
as tax money precisely like any other, with nothing special
about it whatsoever, means that the working poor, the truly
poor, and the portions of the middle classes that pay relatively
low rates of income tax, have had all the tax reforms to make
their lives either nullified by a stealth tax, a tax which
hurts them quite a bit financially, which is sold to them
as a tax to pay for benefits for them, but which will never
be used for that purpose. This tax is the Social Security
surplus, or every penny beyond what is needed for this year's
payouts by the Social Security Administration that Tom, Dick,
and Harry pay to the U.S. federal government.
So what's the point of reducing the income tax burden while
sticking it to the little guy by sucking money out of him
through payroll taxes?
The third argument is, this Social Security surplus money,
in recent years, was doing something useful. Not perfect,
mind you, but useful: it was being used to pay down the national
debt. Consistently, in polls, the public strongly supports
paying down the debt instead of cutting taxes. The reason
is simple: Any fool can see that if taxes are cut too far,
the debt will increase, not decrease, especially because of
interest payments; and besides that, the Baby Boomers will
be retiring in 10 or 15 years. That will put strain on the
government. If taxes are not to rise - and since we are discussing
wasting excess Social Security contributions paid for by ordinary
Americans in the present, there are few alternatives - then
the government must borrow. If the debt (and interest payments)
are lower in 15 years than it is today, the process will be
easier, and the country's finances less bleak.
So obviously, if we were to decide that we might as well
just PAH-TAY while the music's loud and the drinks are cold,
the crunch on government finances will be that much worse
in the future.
So to summarize: The reasons why to NOT dip into Social Security
are, the money is intended (unsurprisingly) for Social Security;
using payroll taxes as a replacement for income taxes is grossly
unfair to low-income Americans; and it will short-circuit
down payments on the national debt, leading to future financial
crisis.
But of course, these are trifling concerns to the learned
such as George Will, insignificant issues which detract from
the real issue, which is...?
Or is this simply a piggy bank raid after all?
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