Remember that middle class tax cut Bill Clinton promised us years ago, the one we never got? Well, now Hillary Clinton wants it back. That is, she wants to take back what was never given.
This must be the Clintonian equivalent of getting blood from a turnip.
Shocking, I know, that New York Senator and presidential candidate Hillary Clinton might be considering hiking up our taxes, but look no further than an article headlined "Clinton Rules Out Cuts In Social Security," from a recent issue of the Wall Street Journal.
Speaking before an American Association of Retired Persons convention in Boston, Hillary pledged, if and when she becomes president, to quickly solve Social Security's long-term financial insolvency, now totaling an incredible $84 trillion in unfunded liabilities.
How will she do it? With the daring and courage only she can provide. That is, by not allowing any meaningful reform of Social Security.
"When I'm president," Hillary intoned, "privatization is off the table because it's not the answer to anything." Sure, in some countries average folks are investing through government retirement programs and growing wealthier, but Americans aren't so smart. We need Congress to spend — er, save and take care of — our retirement money for us.
AARP's shindig also offered Mrs. Clinton the chance to score some points against Illinois Senator Barack Obama. Earlier this year, Obama told AARP that "everything should be on the table" in reforming Social Security. What a rookie mistake. Hillary wasted no time in reassuring the AARP crowd that any cuts in benefits as well as any raising of the retirement age were "off the table" during her administration.
So, what is left on her table? What will President Hillary offer to deal with the coming shortfall for Social Security?
No. Not a lock-box. But good guess, Al.
Yes. A tax increase. A payroll tax increase. An increase that will sock it hard to the middle class. That's a bit odd considering that politicians like Hillary constantly talk about how much they want to help the middle class.
I guess it's true, that old saying, we only hurt the ones we love.
When Journal reporter Jackie Calmes deduced that raising the payroll tax was Mrs. Clinton's only remaining option, she followed up with Clinton spokesman Phil Singer, reporting:
"When it comes to Social Security," [Mrs. Clinton] will stand her ground, Mr. Singer said. "People rely on Social Security." Asked if that would mean an increase in the current payroll tax, he said, "Among other things, yes."
But don't go thinking "yes" means "yes." It doesn't — Hillary's last name is Clinton, remember? After pandering to the powerful AARP, Hillary felt an egalitarian need to pander to average Americans, too. She no doubt senses that Mr. and Mrs. Average do not want to hear that she plans to raise their taxes. So, Hillary's campaign website soon posted this statement in response:
The print edition of today's Wall Street Journal suggests that Hillary Clinton would be open to an increase in the payroll tax for Social Security. That is not correct. Hillary Clinton would not increase payroll taxes for Social Security as President.
Whew! That was close. We almost had a tax increase. Well, I mean if Hillary were to win the presidency — and then do what she said she'd do before she said she wouldn't do it.
But there's just one more thing: How would Mrs. President Clinton actually protect Social Security?
Not for continued looting by Congress, mind you, but for those people who have worked and paid into the system and, in their golden years, actually need to buy stuff like groceries. Hillary did promise to do that, along about the same time she was getting applause for taking all the specific ways to shore up the program off the proverbial table.
For decades, we've known we face a pretty simple math problem. Social Security doesn't involve saving or investing for retirement. It takes money from one generation and gives it to another, young to old. The day is coming when more will be owed to retirees in benefits than what hits the coffers of the Social Security Administration, as extracted from workers. "Annual cost will begin to exceed tax income in 2017" warns the 2006 annual report on Social Security.
Last year, Congress spent $200 billion in payroll tax money over and above what was paid out in benefits. But what will the big spenders do when this $200 billion "surplus" (and more) gets gobbled up in payments to the coming wave of baby boom retirees? That's sort of a double whammy for our slippery solons, having to fund the Social Security shortfall and having to fund the programs currently being funded by the so-called surplus.
In their 2006 annual report to Congress, Social Security's trustees pointed out the importance of addressing the shortfall problem sooner rather than later: "The projected trust fund deficits should be addressed in a timely way to allow for a gradual phasing in of the necessary changes and to provide advance notice to workers. Making adjustments sooner will allow them to be spread over more generations."
Rather than spreading the problem over "more generations," why not put back onto the table the idea of making Social Security into a real retirement savings program? One controlled by each individual worker, rather than politicians.
Like many Americans, I've not counted on receiving any Social Security benefits when making plans for retirement. It's a lot of money to pay out year after year, without return. Still, I'll survive.
But how will my kids fair in an economy increasingly strangled with absurdly high payroll taxes?
That's what's coming, unless career politicians like Hillary change their spots.
Not likely. There are elections to win. Interest groups to pander to. Both sides of the mouth to talk out of.