Daily Debunker

May 19, 2005

What exactly is the Democratic leadership in Congress up to with respect to Social Security? When Rep. Robert Wexler (D-FL) unveiled his proposal to increase taxes to finance the faltering Social Security system, many observers assumed his plan would become "the Democrat bill." Various Democrats have endorsed similar tax increase plans. AARP has floated an idea similar to Wexler's. Even some Republicans have flirted with raising or eliminating the wage cap, the key component to Rep. Wexler's tax hike plan. So it only stood to reason that Wexler's bill would become the official alternative to personal retirement accounts and price indexing.

But that's not the case:

"Wexler said House Minority Leader Nancy Pelosi rebuffed his plan to collect payroll taxes on those with incomes higher than $90,000. After two recent conversations with Pelosi, Wexler said, 'it's fair to say she didn't cheer.' A spokesman for Senate Minority Leader Harry Reid described the Delray Beach congressman as 'a party of one.'"

Democrat leaders on Capitol Hill claim they are willing to negotiate as long as personal retirement accounts are "off the table." But now they have disavowed even a massive tax increase to finance the current system. And in recent weeks, they have also publicly rebuked Robert Pozen's "progressive indexing" plan, which has been endorsed by President Bush, as a "benefit cut for the middle class."

It's a fine mess they've talked themselves into. By rejecting every possible reform measure -- even a tax increase they ought to incline toward -- Democrat leaders have actually endorsed the worst plan imaginable: the current system.

That means the Democrats have unofficially endorsed a 27% cut in benefits for every American, whether he is rich, middle class, or poor. Democrats, endorsing a benefit cut for the poor? Political gamesmanship leads to bad public policy.