The Social Security debate is headed toward a monumental political irony: It might well be that Republicans offer creative ideas to make the system more "progressive" -- i.e., more favorable to people lower down on the income scale -- and Democrats resolutely refuse to adopt them. What happened to the Democrats we used to know, who made progressivity the highest test of any public policy and leapt at any opportunity to "soak the rich"?
Of course, this trend is partly the result of political desperation, as the GOP seeks ideas to make reform that includes personal accounts more appealing to Democrats. But that doesn't detract from the merit of the proposals. Some Republicans are now suggesting not just modernizing and putting what Democrats like to call the world's most effective government program on a sounder financial footing, but doing it in ways that are in keeping with that old Democratic value: fairness.
In the past, Republican Sen. Jim DeMint from South Carolina -- who is seeking compromise with Democrats -- has offered a proposal that would allow lower-income people to invest a higher proportion of their payroll taxes in personal accounts. DeMint suggested a sliding scale that would allow lower-income workers to invest up to 8 percent of the payroll taxes they and their employers pay, while upper-income workers would only get to invest 3 percent. Remember: The diversion of payroll taxes into personal accounts is, in effect, a tax cut. So this proposal would be what Democrats always profess to favor -- a tax cut for the poor.
DeMint's idea would allow lower-income workers to benefit disproportionately from the higher rate of return that personal accounts offer over sending the taxes on to the federal treasury. Also, it would help black Americans especially to develop private assets, an area where they lag the rest of America as a direct result of the nation's legacy of racism. What is there for liberals -- at least those who aren't theologically committed to handing President Bush a defeat on Social Security and opposed to encouraging private investment on principle -- not to love?