In January 2011, Senate Majority Leader Harry Red (D-NV) formally shut his eyes and plugged his ears to the need for Social Security reform:
At the time, the Senator pointed out that the Social Security trustees estimated the program to be fully funded until 2036, based upon the trustees’ 2010 annual report. Two reports later, in 2012, the program was expected to only be fully funded until 2033 – meaning the 2010 estimates were approximately 13% too generous. Yet Senator Reid’s response to a modest Social Security benefit cut proposal by President Obama was to literally throw it in the fire.
This year’s trustee’s report shows the program is again expected to be solvent until 2033 before it faces massive benefit cuts or tax increases to provide fully promised benefits. Yet Senator Reid continues to say the program doesn’t need reform, other than increased immigration participation and tax increases on wealthy Americans.
Poking holes in the Senator’s theory isn’t hard:
Increasing the size of the payroll tax on wealthy Americans simply won’t do the job. As Tea Party Patriots noted in April:
However, claiming making “the wealthiest Americans pay their fair share” through this tax increase in order to make Social Security solvent is inaccurate for two reasons: first, wealthier seniors already take in a much smaller ratio of benefits to taxes when compared to lower-income Americans.
Second, according to Social Security Trustee Charles Blahous, it used to be the case that eliminating the cap entirely could make Social Security solvent. However, the program’s finances have deteriorated so drastically over the past few years that we could eliminate the cap for all taxpayers and still not gain solvency within the 75-year projection typically used to estimate the health of the program.
Perhaps worst of all, taxing the wealthy more for the Social Security program is manifestly unfair, since they already get less for every dollar “invested,” and greater taxes on them will make this worse. This is not making seniors pay their “fair share.” It’s outright ripping them off.
Furthermore, one of Senator Reid’s cosponsors of the tax increase legislation inaccurately portrayed the program’s finances. By also being quoted in the same press release, the Senator added his influential name to the following statement by Rep. Peter DeFazio (D-OR):