Dean Baker once again takes on the folks who are calling for means testing Social Security:
Eduardo Porter had a piece this morning about how a group of academics on the left and right came together around a common agenda. It is worth briefly commenting on two of the items on which the “left” made concessions.
The first is agreeing that Social Security benefits for “affluent Americans” should be reduced. There are three major problems with this policy. The first is that “affluent Americans” don’t get very much Social Security. While it is possible to raise lots of money by increasing taxes on the richest 1–2 percent of the population, the rich don’t get much more in Social Security than anyone else. This means that if we want to get any significant amount of money from reducing the benefits for the affluent we would have to reduce benefits for people that almost no one would consider affluent. Even if we went as low as $40,000 as the income cutoff for lowering benefits, we would still only save a very limited amount of money.
The second problem is that reducing benefits based on income is equivalent to a large tax increase. To get any substantial amount of money through this route we would need to reduce benefits at a rate of something like 20 cents per dollar of additional income. This is equivalent to increasing the marginal tax rate by 20 percentage points. As conservatives like to point out, this gives people a strong incentive to evade the tax by hiding income and discourages them from working.
Finally, people have worked for these benefits. We could also reduce the interest payments that the wealthy receive on government bonds they hold. After all, they don’t need as much interest as middle-income people. However no one would suggest going this route since the government contracted to pay a given interest rate.
via Beat the Press
Dean has made this case before, and I’m sure he’s absolutely correct so far as his figures go. But I think he gives away too much by failing to note that, at bottom, the push for means testing Social Security (whether it involves cutting off the “affluent” altogether, or merely cutting their benefits to the bone) has nothing to do with saving money. Anyone from the “left” who believes that is what the right wing advocates are trying to do is, to put it simply, a dupe. The right plays the long game, and this is yet another instance. The point is to destroy the program, and this is part of the plan.
Social Security is a universal program. Everyone benefits from it, and except for the Pete Petersons (“It is not enough that they succeed, everyone else must fail”) of the world, everyone likes it, and is perfectly willing to let other people get benefits as long as they get theirs. Roosevelt understood this at the very beginning. Means testing is about driving a wedge between the politically more (relatively) powerful and those with no power at all. Once you means test it, it becomes a welfare system, and will be subjected to attack on that ground by the very people who advocated means testing in the first place. Imagine the field day they’d have pointing out to those they cut off the rolls that there’s money taken out of their paychecks every week that they will never see again, because it all goes to “those people”.
It’s good that Baker makes the case in pure dollar and cents terms, but it’s vitally important to call the right out on the actual motivation. That should really be front and center. This is not about saving social security, it is about destroying it, and it’s incumbent upon those of us on the left to make that argument forcibly and continuously. Now, you may argue that the actual motivation is so obvious it hardly needs mentioning. But remember, this is America, where someone named Cruz, Trump or Rubio may be the next president. We have a surplus of stupid in this country. The only way many people in this country “learn” anything is by hearing it repeated so often that they accept it as true.