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February 26, 2005

Raising the Cap is All We Need

According to a new actuarial memo by the Social Security Administration, eliminating the cap on wages subject to social security taxation would solve all fiscal worries in the system for the next 75 years. All by itself. Nothing else would be needed. (See page 18 for the table.)

So why are we talking about doing anything else? Other reforms, from private accounts to raising the retirement age, are all opposed by substantial portions of the population. But eliminating the cap is supported by 69% of the population, so we can solve any problems in the system in a way that would be supported overwhelmingly by the population.

Because the Bush administration doesn't want a responsible, popular solution; they want one that will undermine social security and allow further privatization in the future. So progressives should hit the rightwing hard for avoiding this easy solution. And to sweeten the attack on Bush, I still think progressives should be arguing that with so much immediate money generated by eliminating the cap, we should cut the payroll tax for most workers, even as we shore up the overall system for the future.

Thanks to Josh for the link.

Posted by Nathan at February 26, 2005 10:12 AM