In the weeks before the Iowa caucuses Barack Obama was attacked by paleoliberals for saying Social Security had serious problems the next president had a duty to address. Progressives were “outraged,” according to Paul Krugman, because “Social Security isn’t a big problem that demands a solution; it’s a small problem, way down the list of major issues facing America, that has nonetheless become an obsession of Beltway insiders.” One of the reasons Krugman stridently preferred Hillary Clinton or John Edwards to Obama was that they both embraced the party line that, for Democrats, the less said and done about Social Security, the better.
Obama did not merely refuse to adopt this line. He treated it as not just a policy difference with his opponents, but a character difference. In an interview with National Journal on November 6, 2007, Obama said, “[The] American people have a right to judge how clear and how consistent have the candidates been in their positions. Because if they’re not clear and consistent, then it’s pretty hard to gauge how much they’re going to fight on these issues. You know, Senator Clinton says that she’s concerned about Social Security but is not willing to say how she would solve the Social Security crisis, then I think voters aren’t going to feel real confident that this is a priority for her. . . . [The] voters should be concerned that she is running the textbook, classic Washington campaign, which is to avoid giving clear answers and getting pinned down, for fear that somehow you’re going to be tagged, either in the primary or the general election. I think that’s an old way of doing business.”
Thank God we dodged that bullet. Instead of the old, corrupt, dodgy way of doing business, we have Obama’s radically, transformationally new way of doing business, which is . . . strikingly déjà vu-ish. Everything Obama has done and said about Social Security in 2008 amounts to avoiding clear answers and not getting pinned down. During the primaries, he made it reasonably clear that whatever it was America needed to do about Social Security, all the changes were going to involve tax increases, not benefit reductions. At first, he indicated he was open to the idea that the 12.4% payroll tax should apply to all wages. “If we kept the payroll tax exactly the same but applied it to all earnings and not just the first $97,500 [the ceiling before it was adjusted upward for inflation in 2008], we could virtually eliminate the entire Social Security shortfall,” Obama wrote last year. (Ramesh Ponnuru argued that such calculations were overly optimistic.)
In June, after he had secured the nomination, Obama advocated weaker medicine. The tax increase he proposed then for Social Security would have a “doughnut” – wages between the current limit of $102,000 a year and $250,000 would be exempt. Earnings above $250,000 would be subject to . . . something. The boldness of the brave truth-teller’s proposal was undercut slightly when his campaign admitted that, apart from the $250,000 threshold, every detail about the Obama “plan” – “what the rate would be, when it would take effect, whether it would apply to employers, employees, or both, or what the tax base would be” – was still up in the air.
This week, in the Wall Street Journal, Obama’s top economic advisors, Jason Furman and Austan Goolsbee, rendered the Obama Social Security plan clearer - and punier. They began by applauding their boss for doing “what few presidential candidates have been willing to do by making a politically risky proposal to strengthen solvency by asking those making over $250,000 to contribute a bit more to Social Security to keep it sound.” (“Asking?” say the libertarians. Contribute? You mean the rich can say No?) Furman and Goolsbee ruled out applying the full 12.4% tax to income over $250,000. Instead, Sen. Obama “is considering plans that would ask those making over $250,000 to pay in the range of 2% to 4% more in total (combined employer and employee).”
The topper is when the advisors mention, in passing, that the Social Security tax increase “would start a decade or more from now . . . ” That is, in 2018 or later, at least two years after a re-elected Pres. Obama leaves office. Howard Gleckman of the Tax Policy Center threw up his hands when he got to that part. “Do the political math,” he writes. “Take the likelihood of any politician keeping any given promise. Discount for the time he says it will take to fulfill that pledge. Then discount it again if the effective date is scheduled for roughly the time of his post-Presidential book tour. The credibility factor is infinitesimally low. . . . 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. . . . [In] today’s political environment a tax fix with a 10-year fuse is no fix at all.”
This would all be easier to take if not for the preening by Obama and his advisors about the courage and candor of Mount Rushmore’s next visage. Even as they make it clear that Obama, too, will join the long line of politicians terrified of the third rail of American politics, the Obamanauts urge us to join him in celebrating his bold break with the cynical ways of the past. Talk softly and carry a big stick, said Teddy Roosevelt. Pose bravely and carry a big mirror, says Barack Obama.