NY Times Should Be More Careful About The Kinds Of Reporters They Send Out To Do Serious Stories-- Earl Blumenauer's Actual Remedy For Social Security

Wednesday, Villager Matt Bai caused a big ole stir by using his perch at the New York Times to push the elite meme that Social Security has "fixed" through what Digby always points out is tantamount to human sacrifice. He put his thoughts into Earl Blumenauer's mouth, which gave an opportunity for Blumenauer detractors to go on the warpath against one of the most ardent and effective defenders of working families anywhere in America. This was, in part, Blumenauer's statement yesterday when the whole thing started blowing up:

I do not believe, nor have I ever said, that the Social Security trust fund is either like a "lottery" or "make believe money." As my Congressional Website points out, and as anyone who has heard the countless number of presentations that I have given will tell you, the Social Security trust fund is backed by the full faith and credit of the United States Government which has never and will never default on its commitments.

In this 'Decade of Decision,' all Americans must participate in a grown up conversation about essential government services we support. Social Security is a part of that equation-- but an important one. Analysis shows that the trust fund will remain solvent until 2037, yet for the first time in over 25 years, we are spending more than we collect in taxes. So while we have some time to get it right, the longer we wait to have this discussion and to enact solutions, the harder this will become.

I will continue to strongly oppose any effort to privatize or weaken the Social Security system. I also encourage all Americans-- whether they're Progressive, Conservative, or somewhere in between-- to join me as we have the discussion of how Social Security can remain strong and solvent for generations to come, and how we have a meaningful conversation about what America needs and how to pay for it.

Earl's an old friend and I was eager to hear what he had in mind, specifically, regarding the "grown up conversation." As I suspected, it isn't something in Matt Bai's world or that Matt Bai is likely to understand. In fact, Earl Blumenauer knows exactly how to make sure Social Security remains vibrant and how to keep it a beneficial lifeline to seniors and other people who depend on it. The Cat Food Commission and Obama's sick tit-man from Wyoming may never bring it up but, of course, the big problem that threatens the fiscal health of Social Security is the cap on pay roll taxes. Everybody pays-- until the $106,000 mark. Those who make $100,000 and those who make $25,000 pay their share. Those who make a million only pay on the first $106,000. That's got to end. Billionaire freeloading has got to end. This is how Earl put it to me yesterday on the phone:

Social Security is only part of a much bigger budget battle. We have military spending that needs to be reduced and redirected. Since I've been in Congress, we've spent about a quarter trillion dollars on farm subsidies, most of which benefits Agribusiness. Over 80% of our farmers get nothing!

The healthcare reform legislation that the right wing is attacking will help us to improve medical care while controlling costs. This is the big picture that they want to obscure with a false argument about Social Security. Social Security is a problem, but it isn't a crisis. And Social Security funding is eminently fixable. One of the easiest and more equitable fixes is to simply raise the income threshold that is taxed.

As far as I can see, that's the progressive solution to progressive's greatest social accomplishment. Matt Campbell, the intrepid Democrat running against far right fanatic Steve King in Iowa explained it here a few weeks ago:

I believe that further raising the age of eligibility for benefits to age 70 or reducing the level of benefits violates a promise America has made to our seniors. The age at which full social security benefits are paid is already 66 and it will be raised to 67 in 2027. Workers in blue collar and even white collar jobs have their bodies endure a lifetime of work and it is unfair to raise the retirement age further for seniors. I similarly do not support an increase in the payroll tax to 14.4 percent. Working families are already taxed enough.

A preferred means to achieve Social Security solvency is to simply eliminate the payroll cap on wages subject to the tax, although I would include a “doughnut hole” that exempts payroll taxes on earnings between the current cap and $250,000.

In 2010, the Social Security wage base cap is $106,800 (indexed annually) and the Social Security tax is 6.20% paid by the employee and 6.20% paid by the employer. Wages above $106,800 are exempt from Social Security tax. Eliminating the cap on wages subject to social security would largely achieve solvency for the Social Security trust fund. Former Senator John Edwards proposed increasing the taxable maximum as well, but his plan only affected workers that made more than $200,000 per year. It included a “doughnut hole” that exempted payroll taxes on earnings between the current cap and $200,000. President Obama also previously suggested raising the taxable maximum and mentioned the doughnut-hole approach in some appearances. While a U.S. Senator he proposed a plan to tax wages at the normal rate up to the cap and then 0% from the cap to $250,000 and then at 12.4% on wages higher than $250,000.

Utilizing the doughnut-hole approach has merit because wage earners that make between $106,800 and my proposed $250,000 limit are frequently individuals from working class families that secured higher-salaried positions by incurring substantial amounts of college debt. The proposal also is a middle-ground compromise against arguments in the GOP that the elimination of the cap raises the marginal tax rate on such individuals. Eliminating the cap and having a doughnut hole is a much better option than raising the retirement age to 70 or reducing seniors’ Social Security benefits.

I hope Blumenauer can rally his colleagues around this idea. I was happy to see that this week he's endorsed one progressive challenger who agrees with him on it, Justin Coussoule, who's running against a Republican, John Boehner, who would rather dismantle Social Security than fix it and to whom making the wealthy pay their fair share is anathema. The DCCC has told Democratic incumbents to not endorse Democratic challengers but Earl Blumenauer is one who's serious about challenging Boehner's misanthropic and reactionary ideas right is his won backyard and his leadership committee has sent Coussoule some cash and, like Alan Grayson, Raul Grijalva, Barney Frank, Bob Filner and Tim Ryan, an endorsement letter. I'd suggest that the DCCC instead tell it's members about the CBS poll yesterday that makes it clear the public strongly favors letting tax cuts for wealthy expire-- 'cause they either don't know or don't care. And unless they wise up, they'll all be working on K Street next year.