There might be reasons. Maybe Obama feels it's politically easier to tax the rich than to cut their benefits. But it's not wildly obvious why this should be so. Both tax hikes and benefit cuts involve imposing economic harm. But (a) tax hikes are immediately felt by people of all ages. Benefit cuts impact most immediately only on the old. (b) High tax rates, as noted, have bad side effects that hurt the whole economy. Means-testing wouldn't have those effects (though it might have others, such as discouraging savings). (c) Means-testing could be sold as a shrinking of the program--as Ponnuru points out, why run lots of money through the system by taxing the rich in order to pay benefits to the rich?
The rich aren't uninfluential! At some point the people making $275,000 a year may wonder why they are paying an extra 10% of their last dollar to send a check to the couple down the street who make $240,000 but don't have to pay any of that extra 10% at all (because they're in the lucky doughnut hole)--or to the vastlyy more numerous couplee making $120,000 who would also get full benefits but pay no new tax to fund them At some point, the $275G plus crowd may say, "The hell with it. None of these folks in my neighborhood need the benefits. Just stop taxing us to pay for them"--and support means-testing.
I think you can argue Obama's opening the door to this outcome. Since I like the outcome, this doesn't bother me. Means-testing isn't necessary to keep Social Security solvent--the system's not that out of whack--but it might be necessary if you want to generate lots of money (in the form of budget saving) you could then spend on a decent universal health care plan. Orthodox Democrats who've rigidly opposed means-testing for decades might want to think twice about Obama's payroll tax plan, though.
**--But Obama would apparently offer low income workers a "Making Work Pay" tax credit in an amount equal to their "employee's" half of the payroll tax for the first $8,100 in income. ... 12:47 A.M. link
Monday, June 16, 2008
I See a Chair at the Annenberg School: Joe Conason responds to my suggestion of an on-the-record email (regarding his hypocritical condemnation of "revolting ... tabloid journalism" given his own 1992 Spy investigation of George H.W. Bush's sex life):
I just saw your item from last April
and finally realized that you don't just pretend to be a bonehead.
Well argued! ......P.S.: Joe: Let's keep these lines of communication open. ... P.P.S.: But it still takes two to go off the record. ... 7:32 P.M. link
The Genius of Jim Johnson, Part XXVIII: Craig Crawford has a Jim Johnson story that's a little too bad to be true.