As my readers know, I have recommended that the Democrats roll back the most egregious parts of the Trump tax cut and use the proceeds to fill the fiscal gaps in the existing welfare state, including Social Security. Why?
Because it is both good politics and good policy. Here are my reasons:
- The Republicans have won a substantial majority of elderly voters in the recent past in spite of their well-publicized plans to cut and/or privatize Social Security and Medicare. In the last election, however, there were some signs that the elderly are becoming more receptive to the Democrats. Making a very conspicuous gesture to support Social Security would definitely help, and would force the GOP to deal with a difficult dilemma: agree with the plan to raise taxes and antagonize the donor class; or refuse and be seen as supporting big cuts to Social Security for the benefit of the wealthy.
- Deficits in the two programs definitely do exist and threaten their long-term viability. At some point, the issue has to be faced. Better now than when your back is against the wall, and the GOP has leverage to force extensive cuts.
- What are the other alternatives? To raise the payroll tax? The burden of financing the welfare state should fall on the country as a whole, not just workers and employers. In addition, raising the payroll tax would effectively result in a pay cut at a time when stagnant wages are a huge problem, and the increased costs would only encourage employers to automate or send jobs overseas. Does that sound like a good idea in today’s world?