If former Rep. Barney Frank does get an interim appointment until a more permanent replacement to fill Sen. John Kerry’s seat is elected, he has a plan for dealing with the nightmare fiscal scenario created for the country in the coming few months with the forestalled fiscal cliff. He’s advocating for progressive Social Security reform to be part of the mix.
Simply put, he thinks Democrats should push for additional revenue through an increase in the payroll tax for upper-income earners–not just the very rich, but also the near-rich who made out quite well in last week’s fiscal cliff deal. With President Obama backing off of his original pledge to raise tax rates on family incomes over $250,000 and shifting the threshold to $450,000, the Democrats left vitally needed revenues on the table. The answer for the next round is clear, says Frank: Get more money out of the exempted swath of income—from both those whose incomes fall within that window and above it—via the payroll tax.”We did not get at taxes between $250,000 and $450,000, which makes it good territory for putting it out for the Social Security payroll tax base…There is a segment of income from people who make between $250,000 and $450,000 who we think could sustain an increase in taxes,” he said. “If they had been [hit with an income tax increase] I’d say we don’t want to double-hit these guys, but now it’s a second cut at the apple for this [income range] in a politically popular way, to protect Social Security rather than taking it out on the old woman in Boston living on $15,000 a year.”
That last bit of the quote is in reference to the chained CPI, the currently in vogue “solution” to extending the life of Social Security. The current payroll tax cap is $113,000—anyone making more than that pays payroll taxes on just that amount and the rest is clear. It is revenue ripe for the picking, and far more equitable approach to shoring up Social Security than shrinking benefits.
A Sen. Frank, with no real allegiances within the Senate, no need to make friends there, and nothing to lose by raising a little hell could be just the ticket for some common sense Social Security reform.