Tuesday, May 06, 2008

Boldly going where no President has ever gone before

It's no secret that John McCain wants to un-tax the rich and the corporate, but now he's promising to balance the budget too. On the backs of the proles, it would appear.

From Think Progress' Wonk Room:

So how will McCain balance the budget? James Pethokoukis of U.S. News thinks he has the answer: massive cuts in Social Security benefits. The cuts Pethokoukis outlines would not only eliminate the Social Security shortfall but also generate $2.9 trillion to help pay for McCain’s tax cuts. He points to McCain aides’ suggestions that he might raise the retirement age and cut the growth in benefits over time.

Implementing those two solutions would actually result in more money going into Social Security than is needed to fund scheduled benefits. There would be money left over to help reduce taxes or increase spending on education or energy or whatever […] Now if you did a combination of price indexing starting in 2015 and extended the retirement age to 70 by 2050, that $5 trillion deficit turns into a $2.87 trillion surplus.

If Pethokoukis is right, McCain is attempting to do something that no president has ever done before: using payroll tax revenue to fund other functions of government. The result would be huge cuts in the program that lifts 13 million seniors out of poverty and a shift of the tax burden from progressive corporate taxes onto regressive wage taxes.


Steve Bates said...

Has McCain... have you... investigated whether such a uee of the payroll tax is even legal?

Anonymous said...

They are doing it now. There was never an income tax surplus, the surplus was the FICA payments. The have been using the trust fund payments to hide the true deficit.

hipparchia said...

true about what they've been doing with the trust fund, bryan, but up till now they've mostly confined themselves "borrowing" from it, since they're still paying out [mostly, sorta] the full benefits.

mccain's proposal sounds like it would codify and legitimize what is right now still under the table [behind the curtain?] finagling. and probably that will get spun somehow as bringing transparency and ethical reform to government.

steve: it's all legal now.