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Why Oh Why Can't We Have a Better Press Corps? (Mark Schmitt Explains American Politics to Ron Brownstein Edition)

"Fixing Social Security" Is the Only Regressive Tax Increase on the Menu

Josh Marshall makes a very good point: much lf the enthusiasm for "fixing" Social Security (rather than tackling any of the much more serious long-run fiscal problems we have that the Bush administration has done so much to worsen) springs from the fact that "fixing" Social Security by raising the payroll tax is the only regressive tax increase that might be politically palatable:

Talking Points Memo | Stop Saving Social Security: The problem on the political side of the equation is that the enemies of Social Security have spent a couple decades arguing that the Trust Fund doesn't exist or that it is simply a bookkeeping device with no true financial meaning. If that's true, it means that American workers have spent the last twenty-five years using their payroll taxes to subsidize general revenues and make it easier to float big tax cuts for upper-income earners without getting anything in return.

If we start pumping a lot more money into Social Security coffers now it will by definition go into more government bonds, which is another way of saying that it will go toward funding our current deficit spending. In fact it will enable more deficit spending and probably more upper-income tax cuts because it will make the consequences of both easier to hide....

[T]he window of time we had to seriously pare down the national debt to prepare for the retirement of the baby-boomers is close to over... our best way of ensuring the future health of Social Security is to stop running up the national debt now. So I'm very reluctant to put more payroll taxes in the pot while we're still running big deficits because of the Bush tax cuts. The money will just go to subsidizing that irresponsible fiscal policy. If there is any sense in which the 'Trust Fund' is not 'real' it is that it must be paid back from general revenues. And that will only be harder the more other debt we're running up. So rather than solving the problem, I think we're actually enabling it...

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