The "progressive" netrootsy left often discounts the importance of welfare reform. Worrying about welfare--that's outdated '90s neoliberal thinking! But when Democrats want to actually get elected, as opposed to blogged, what issue do they emphasize?
"That's why I passed laws moving people from welfare to work ..."-- Barack Obama, in his first post-primary TV ad.
Is Obama's new faux-presidential, alternative-reality seal his "Mission Accomplished"? If you wanted to emphasize to voters that the Democrats' nominee is a bit stuck up, it would be hard to do better. I suppose he could start requiring reporters to stand when he enters the room. ... The seal probably started out as a bit of fun. But unless David Axelrod is insane, the thing will never be seen again. .. 2:15 A.M. link
A few responses to criticisms of Wednesday's exciting Social Security item:
-- Andrew Biggs questions whether Social Security's "work test"--you only get it if you've worked--would "keep a more progressive Social Security program from being seen as welfare." He notes that the Earned Income Tax Credit also goes only to workers, and asks "does a work test keep the EITC from being seen as welfare?" The answer is yes! The EITC helps only the poor and yet remains very popular (despite occasional criticism from the right). Even Biggs concedes "the EITC has fared much better than welfare programs without a work test." He needs a better counterexample.
-- Ramesh Ponnuru, citing Biggs, says a "means test"--reducing or eliminating the benefits of seniors who don't need them when they become eligible--would discourage savings. He and Biggs propose instead fiddling with benefit schedules so that high earners earn lower benefits --but they'd get to keep those benefits whether they retire poor (having failed to save) or retire rich. The Pozen Plan, endorsed by President Bush, is one way to gradually adjust benefit schedules in this fashion.
The Pozen Plan is fine if all you want to do is balance the books on the current Social Security system. It falls short if you want to go further and actually shrink Social Security by a few hundred billion in order to make room in the budget for, say, universal health insurance. Then you need to do something more dramatic, like eliminating--not reducing--benefits for the richest 25% of retirees. They did it in Australia. It worked. (I'd be interested to learn if Australia's means-test had any effect on savings.)
Backfill: On KCRW's Left, Right & Center, Matt Miller (center) and Amity Shlaes (right) were both alarmed by the high marginal tax rates produced by Obama's preferred Social Security fix (which is to subject over-$250,000 taxpayers to the 6.2% payroll tax). ... Tune in about 16:30 into the progam. ... Shlaes, like Biggs, supports an alternative self-contained Social Security fix:
[I]t is possible to fix Social Security without doing too much, you can fix most of it by adjusting the formula, so that each cohort gets just what the proceeding cohort got. adjusted for inflation, no more. What we have now is real increases and that's more than half of the problem in the Social Security system.
Again, this is easy to say if you don't also want a big, expensive health care addition to our welfare state, which I assume Shlaes doesn't. If you do though, and you don't want a counterproductively high tax burden, then you may eventually have to endorse a more drastic Social Security diet plan. ... 1:31 P.M. link