July 16, 2008

McCain on Social Security: Everything on the Table?

I don't trust people whose fiscal policy platforms are built around "pledges." When an elected official says that he/she will never, ever raise taxes on anyone, this shouldn't be seen as a principled stand-- it should be understood as a cop-out, a signal that this particular elected official, when he takes office, will have checked his brain at the door. The first principle of fiscal policy should be that you put all the cards on the table, and face budget difficulties as they arise using tax changes or spending changes tailored to fit the specific budget circumstances you're facing. No pledges, no vows, just a nice rational deliberative process.

So I was impressed to see presidential candidate John McCain quoted on the New America Foundation's US Budget Blog as saying that when it comes to fixing Social Security's long-term funding imbalance,"you've got to say, 'Look, everything is on the table, let's sit down at the table.'"

Given McCain's recent tendency to vocally oppose tax increases of any kind, the natural follow-up to a comment like that is "you mean you're open to increasing the payroll tax?" Since the McCain quote came from a much longer interview with the Pittsburgh Tribune-Review, I was interested to see whether, in fact, the Trib's staff asked this follow-up question. And they did, sort of, by asking not whether McCain would support increasing the federal payroll tax rate, but by asking whether he would support a proposal that would increase the annual cap (currently $102,000) on the amount of wages that can be subject to the payroll tax in a given year. Here's the exchange:
Trib: Do you favor raising the cap?
McCain: Pardon me?
Trib: Do you favor raising the cap?
McCain: No, and I think by doing so, as Sen. Obama wants to do, you are obviously putting a very, very big increased tax on ... middle income Americans who filing jointly and in other ways will be paying a very big increase.
So the good news is that McCain isn't taking a no-taxes pledge on this point. But the bad news is that he's talking out of both sides of his mouth on this "cards on the table" approach. He tries to appear conciliatory by speaking the language of rational deliberation, then poisons the well by completely mischaracterizing the impact of a relatively tame tax hike on "middle-income Americans."

In other words, when McCain says "let's put all the cards on the table," what he really means is "let's have an honest discussion of all the ideas I agree with, and tell outright lies about the rest of them." Is this better than a "no new taxes" pledge? I'm not sure it is. Pretending to be reasonable is arguably even worse than just admitting you're irrational. The "no new taxes" gang is irrational at best, but at least they're honest about it.

For more details on why McCain's statement about raising the cap is wrong, go here.
You can read the whole Tribune-Review interview here.


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