Saturday, May 01, 2010

EDITORIAL >> Demagoging Social Security

If you are like us and each day’s mail carries a blizzard of fliers from Sen. Blanche Lincoln and Lt. Gov. Bill Halter, you’re ready to call a truce in the Social Security war. We would be doubly appreciative if they also halted the slick commercials accusing each other of shipping American jobs across the borders, but the Social Security attacks are particularly disingenuous and discredit both candidates.

Let us stipulate — and they should, too — that neither Halter nor Lincoln will do anything to jeopardize the retirement program that has brought financial security to the nation’s elderly and disabled for 75 years. Both of them opposed the privatization scheme pushed by President George W. Bush and a few Republicans.

But if you believe Lincoln’s fliers, Halter plans, if he goes to Congress, to try to privatize Social Security, slash benefits and then tax away people’s pensions. Halter’s ads are a bit more specific and accurate about Lincoln’s record, but they still characterize her as an enemy of Social Security, which she has never been.

This silly war seems to have begun because Halter made much of his career in Washington as deputy administrator of Social Security and briefly acting administrator in the first days of Bush. He later spoke out against Bush’s privatization plan. You would think Halter founded Social Security. The grandson of the real author, James Roosevelt Jr., himself a former associate commissioner of Social Security, is campaigning for Halter.

So Lincoln found some remarks made by Halter explaining his boss Bill Clinton’s suggestions in the 1990s that some small amount of Social Security funds could be invested in commercial securities to amp up the trust fund. Then in a debate a couple of weeks ago while discussing Social Security reforms Halter said, correctly, that past Social Security packages to insure solvency have included a combination of taxes and benefit changes.

So Lincoln’s ads accuse him of favoring privatization and wanting to “raise Social Security taxes and cut benefits of retirees.”

Halter denied all three and then produced fliers of his own accusing Lincoln of having voted to cut benefits and to tax the benefits of retirees. Halter’s ads have the advantage of being accurate but they are still a little disingenuous. That tax proposal that Lincoln supported belonged to Halter’s boss, Bill Clinton. Halter worked in the Office of Management and Budget at the time and has bragged about helping eliminate the federal budget deficits. The Social Security tax was part of the reconciliation package in 1993 that ended the budget deficits.

Let’s straighten out this tangle because we’re going to hear about it all year. Social Security benefits were not taxable until 1984. President Ronald Reagan appointed a special Social Security commission headed by Alan Greenspan, which recommended benefit changes, higher Social Security payroll taxes and subjecting half of people’s Social Security benefits to the income tax.

Reagan embraced the changes —it was among a number of tax increases that the anti-tax Reagan imposed in his eight years — and Congress in 1983 went along overwhelmingly. The changes took effect in 1984.

Then, as part of his budget reforms in 1993, President Clinton proposed increasing the share of pensions that were subject to the income tax from 50 percent to 85 percent but only on retirees with fairly high incomes. That’s what Lincoln, then a member of the House of Representatives from east Arkansas, voted for. If Halter disliked the president’s plan, he never said so, and in fact he still hasn’t said so. He just points out that she voted that way and insinuates that it was a terrible thing to do.

Congresswoman Lincoln also voted for an amendment to the 1994 budget act by the deficit hawk Rep. Charles Stenholm, D-Texas, that would have forced automatic across-the-board cuts in entitlements for four years if the reconciliation act did not reach its budget-reduction targets. She was one of only 37 out of 435 who voted for it. It wouldn’t have made any difference because the act did meet the targets. The deficits disappeared in 1998. Remember those brief golden years of budget surpluses?

As for future payroll taxes, benefit taxation and benefit changes, either Halter or Lincoln will vote for the deficit-reduction package if President Obama’s deficit commission manages to produce one. Or at least we hope they leave themselves the flexibility to vote courageously to address the country’s fiscal problems. That package is almost certain to include changes both in tax rates and in how future cost-of-living adjustments (COLA) are calculated.

Nothing is more tiresome or baffling than hearing politicians fight over what they agree on. Let’s hear some straight talk — and not Republican demagoguery — about energy, climate change, the deficits, the estate tax and immigration, for starters.