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COLUMNISTS
TODAY'S STORIES
17.01.2008
Is that Hillary Clinton Talking? Or Grover Norquist?

Barack Obama has taken a lot of grief for appropriating right-wing talking points.  And rightly so.  Consider health care.  When he has argued against "forcing" people to buy insurance, as Hillary Clinton and John Edwards have proposed to do, he undermined the case for an individual mandate -- something virtually every expert agrees is necessary to achieve truly universal coverage. 

But look who's talking like a conservative now.

Talking Points Memo has obtained a Clinton mailing in Nevada -- apparently used in New Hampshire as well -- in which the campaign argues against Obama's Social Security proposal. 

For those who haven't followed this issue, Obama has said he would consider raising the cap on the payroll tax, in order to put more money into the Social Security system. Presently, individuals only pay Social Security taxes on roughly the first $100,000 of their income.

It's a defensible measure on its own terms, since it would actually make the program's financing more progressive.  Under the current system, a CEO pulling in several million dollars a year pays no more Social Security taxes than a profsesional making $100,000.  It would also, as advertised, improve the program's long-term finances.

But in pressing his case, Obama has adopted the same right-wing frame -- of a Social Security crisis too politically perilous for most politicans to address -- that President Bush and the Republicans used when they tried to privatize the program. Although that effort failed, the fight is recent enough -- and myth of a Social Security crisis prevalent enough -- that merely echoing the language is enough to jeopardize the program (which, for the record, is most definitely not in crisis). And Obama should know better.

In this mailer, however, it's Clinton's rhetoric that's worrisome.  It attacks Obama because "Nevada families need to keep more of their hard-earned dollars -- not less..." and "We need a President that will help hard-working families keep more of what they earn..."

Feel like you've heard that before?  You have.  Whenever Democrats propose a measure that would result in higher taxes, that's the argument the Republicans make.  It doesn't matter how little money is involved -- or whether, as is often the case, it's only the wealthy who will be paying more.  It doesn't even matter if, rather than imposing a new tax altogether, the Democrats are simply proposing to allow a recently enacted tax break to expire.  

Clinton, of all people, should know this.  She was there, in the White House, when her husband signed the 1993 budget -- which conservatives and the media pilloried as a major tax hike, even though it was only the wealthy who saw their burden go up significantly.  And, of course, Clinton -- like all the Democrats -- is proposing to let the Bush tax cuts expire, so that she can finance her ambitious domestic policy proposals while chipping away at the deficit. 

It's true that, under Clinton's proposed scheme, only relatively wealthy taxpayers would see their tax burdens go up.  (See page 3 of her health care plan here.)  But, then, you could say the same thing about Obama's proposal. 

That's why the Clinton mailer's language is so bothersome.  She's putting her imprimatur on a talking point that can, and surely will, be used against her and any Democrat trying to enact his or her campaign agenda.  

--Jonathan Cohn

Posted: Thursday, January 17, 2008 11:00 AM with 19 comment(s)

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blackton said:

Jonathan, I take exception to the notion of opposition to a mandate being a right wing talking point. I am as for UHC as anyone but taking a politically suicidal position that is also damn near unenforceable and bound to stir resentment does not make me a right winger. We can achieve UHC via taxes and not force people to write checks to insurance companies who seem to be in the business of finding ways to deny care. Obama's position is consistent and realistic, Hillary's position regarding social security taxes is blatantly cynical and misleading. The comparison simply is wrong.

January 17, 2008 12:07 PM

Eos said:

Grover Norquist???? Really??? Is there no twist you won't make or aspersion you won't cast in order to defame Hillary? Hillary is protecting wage-earners with her proposal and position, not the super-wealthy. The payroll tax idirectly burdens wage-earners, and it is already steeply progrssive because of the limitation on benefits (people who pay in a lot more get the same pension as people who pay in a lot less). There are better ways to make the tax systems more broadly progressive. Hillary is protecting wage earners, which will play very well in November. Her positions on issues like capital gains taxes remains clearly prgressive. Try you argument again when Norquist endorses Hillary and hell freezes over.

January 17, 2008 12:13 PM

stgla said:

Someone needs to unravel the mystery of why Republicans are so successful at using this, why people who would not be hurt (and probably helped) by taxing people who are richer than they will ever be are so anti-tax that they'll go against their own interest.

We see it in the inheritance tax debate, the debate over lifting SS tax caps mentioned here, capital gains (less obvious, but same issue), and AMT, and rates for the top brackets.

January 17, 2008 12:14 PM

stgla said:

pccostello, my other comment hasn't appeared yet, but let me say that this post is not part of the VRWC against HRC.  Your argument about "wage earners" is ridiculous.  Let me say as someone who would pay higher SS taxes if they raised the cap that I am not a proletariat warrior.  Technically I may be a wage earner, but please, over $100K taxable income means we can afford a few extra bucks to firm up social security financing.  I would totally take that deal if they would raise the retirement age by a couple of years (long overdue change) or heaven forbid, means-test benefits.

Again, why do real wage-earners (as in hourly wage, lunchpail, hardhat types) fall for this tripe that SS is too progressive???  Yes, it's paternalistic because it assumes that most Americans can't save for their own old age, but I think we bought into this Ponzi scheme so we have to keep it going.

January 17, 2008 12:34 PM

Eos said:

I don't think you understand this issue. of course you're not a proletarian warrior. but there is a huge difference between taxing salaries and taxing other forms of income. The income wealth of the nation is not concentrated among people who earn 100k in the form of a salary. It is concentrated among people whose income comes from investment earnings. It is a question of how you construct a progressive tax structure. Warren buffet pays a lower rate than his secretary not because of his salary but because of his investment income. raising the payroll tax a bit won't change the inequity of Buffet's tax rate by even a hair. but it will make a significant difference to lots of his employees.

January 17, 2008 12:55 PM

blackton said:

pccostello: good Lord! Protecting wage earners? Which ones? Oh yeah, the ones making over $100,000 which in your fantasy world is the average American. Conservatives are for a flat tax rate for income, except for when they are against it (like Social security). And who does Hillary side with? Mendacity and Political expediency, of course. Social Security will go broke, and just how do you propose to fix it? Raise the tax rate on the poor and true middle class (not your fantasy kind)? Oh right, you will raise Capital gains to pay for Social Security? yeah. that will pass. Or do you propose to cut benefits for the poor? More importantly, what is Hillary's proposals to fix Social Security? Can you name them? It is so easy to criticize others policies when you have none of your own.

Is there nothing you won't say in defense of Hillary? Is the Hillary Kool-aid this potent for you?

January 17, 2008 12:55 PM

kj_593 said:

Pccostello:

Actually, most folks won't be impacted by what Obama is proposing. Almost 97% of Americans already pay social security tax on 100% of their salaries.  He's talking about raising the cap on the other 3%.  Senator Clinton is using a scare tactic here and disingenuous attack, considering that she contemplates raising the cap as well.

To abuse low information voters this way is disingenous and says a great deal about how Clinton would run the country.

January 17, 2008 12:56 PM

ratnerstar said:

Raising the cap won't hurt me any time soon, unless my career takes a drastic and unexpected turn for the better.  But in a lot of places -- DC for instance -- earning low six figures puts you pretty squarely in the middle class.  If you live in a major metropolitan area and have a large family, 120, 130k doesn't seem like vast wealth.

I'm not saying I'm opposed to raising the cap, just that those people probably won't feel terribly civic minded about it.

I'm going to admit my complete ignorance here: why have a cap at all?  Why not lower the rate significantly but eliminate the cap on earnings?  Wouldn't that do much more to reduce regressivity?

January 17, 2008 12:57 PM

blackton said:

ratner, good idea. I will go one further, eliminate any penalties for working after retirement. why punish people for working? they will continue to pay in and get it all back in their checks, as opposed to simply stop working so as to avoid any penalty. Part of me would even be willing to consider a flat tax provided it is a true flat tax on all income, earned and unearned, funding all government expenditures including Soc. Sec. but as I said above, Conservatives would never go for that.

I just spent ten minutes scouring Hillary's web site for her solution to social security. But found nothing, I did find, however this:

updated 2:57 p.m. CT, Fri., Oct. 12, 2007

WASHINGTON - Hillary Rodham Clinton has given a private clue on an issue she has refused to discuss publicly — how to preserve Social Security in the long term.

The Democratic presidential contender told an Iowa voter she would be willing to consider an idea that her Democratic rival John Edwards has been promoting — raising Social Security taxes on high-income earners. She told him she didn't want to put an additional tax burden on the middle class but would consider a "gap," with no Social Security taxes on income from $97,500 to around $200,000. Anything above that could be taxed.

Wow, the mendacity of Clinton is breathtaking. This took me mere minutes to find.

Spin this pccostello.

The funny thing is, I actually agree with this idea. It would relieve the burden on people who live in high income areas, addressing Ratnerstars concerns. Why the hell couldn't she just state her position instead of her nonsense?

January 17, 2008 1:17 PM

ratnerstar said:

Okay, I'm sort of missing the logic of the gap proposal.  Breaks for the upper middle class but not for the rich, the poor, or the rest of the middle class?  

Why not just raise the earnings floor -- only take SS taxes out on income above, say, 50 grand?

January 17, 2008 1:24 PM

blackton said:

ratnerstar, the logic being simply not to get hammered by Republicans for raising the income on "the middle class." I like the idea not because it is the best idea, but because it is more politically realistic. This upper middle class can swing too many key states so it seems a reasonable compromise.

January 17, 2008 1:36 PM

Eos said:

I have to get some work done, so I'll state my case and go back to work.

1. It is rediculous overreaching to compare Hillary to Norquist. You really have to be way over the top to even think of that as an interesting comparison. It is a smear, not an argument, and it feeds into the vilifcation and disrespect that characterizes so many of the posts here.

2. The progressivity of payroll taxes occurs at the point of benefits, not at the point of taxation. It is already steeply progressive.

3. Increasing taxes on wageearners is a middle classs tax increase. That's the effect it will have and how people will perceive it and vote on it. The real income wealth comes in the form of investment income. Those are the super-wealthy and that is where Bush's and Reagan's policies have concentrated the wealth. This has to do with captial gains tax changes, estate tax changes, not payroll taxes. Buffet's wealth is not in the form of his salary. Think stock options, for example. that is where the income disparity gets real. That is why Warren Buffet pays at a lower rate than his secretary. Payroll taxes won't change this at all.

4. Blackton, I really don't understand your reasoning. Mostly, you are tendentious and rude. How does Hillary considering this idea (which you say you agree with) establish her mendacity? What is there for me to spin? the policy she said she would consider is consonant with what I am saying. It means that payroll taxes would be frozen all the way up to 200k per individual.

5. Social security payroll taxes are different from regular income tax in many, many ways. One of these ways is that they have always been presented as a pension. Many of the positions taken by those attacking Hillary are likely from people who are younger, have only paid in for a few years, and who don't feel affected by raising the retirement age. If you have been paying social security for decades under one set of assumptions and then are told you have to work older, get less, and pay more, then it affects you differently than if you are in the demographic category thats owns an ipod and gets your coffee at starbucks. this is the same demographic that liked Bush's proposal for privatizing social security--no skin off their noses. If I had my salary at over the last 20 years at the taxation level represented by capital gains taxes, I could have already retired. If I had all my social security back at the level of the increase in the S&P, I would have been able to retire even earlier. So, to increase taxes on this portion of my resources, while leaving capital gains untouched, is very unfair.

January 17, 2008 1:58 PM

butchie b said:

I agree with raising the cap, with or without a donut hole.  The argument against the hole, and other changes, is that it will turn SS into a "welfare" program, and then over time will lose the support of the middle class.  It's already well on the way to doing just that, once the boomers start draining the program.

That view does not convince me, but it's out there.  SS is bad enough, just wait until the boomers are on Medicare.

Don't know which of the Dems candidates are where on this, but it's totally non-partisan - demographics is destiny.

January 17, 2008 2:16 PM

Eos said:

One last point--the percentage of all Americans with personal incomes over 100k is 6%, not 3%. But this is intensively age related. On average, people earn more as they get older until they retire. Although I can't find the numbers in the time I have now, the percentage with personal income over 100k is much larger as you go up in age until you hit the age of retirement. So, the percentage of wageearners earning over 100k who are 45 or older will be much higher than 6%, higher still at 55 years of age and up. These percentages over 100k will be still higher in blue states which have more education intensive economies and higher costs of living.

January 17, 2008 2:24 PM

blackton said:

pccostello, I will agree with you the Norquist reference was way overdone, but the point is is that Hillary is criticizing Obama for a proposal she herself endorsed and doing so in a way that is cynical and mendacious. As to the rest, I have no problems with increasing Capital gains taxes, estate taxes, etc. but this needs to be done to shore up our general budget and to pay off the obscene amounts of debt. It will not solve Social security. Let us not conflate the two issues since essentially no one else does. Furthermore, I do not see how it is rude to observe that this is a cynical attempt on the Clinton campaign. Some people like such hard nosed tactics, I find them self-defeating. If Hillary and Obama have different takes on how to solve Social Security, highlight them, but to be honest at this point I really have no idea if they are different since Obama himself has endorsed the same plan. Can you explain the difference between what Hillary has said previously and what Obama says now? Can you tell me the difference between Hillarys plan and Obamas? your theories on taxes are all well and good but beside the point. The point is the cynicism of Hillary. Show me how it is not cynical. Or am I rude in asking how it is everyone else on this thread has the same take except you?

January 17, 2008 2:29 PM

blackton said:

butchie, I agree that demographics is destiny but so are productivity increases. one is static the other is not. While it is reasonable to assume most young people will get old it will take a fortune teller of the highest magnitude to predict the shape and size of the US economy in 2030, that does not mean I do not think we should take steps to balance the budget now, instead of relying on republican fantasy borrow to be wealthy, but I think that because it is responsible for both now and the future.

I also do not see SS becoming seen as a welfare program. Too many baby boomers will whine and bitch about it, and no adult wants to say their elderly parents are on welfare either. For now, fix the short term, balance the budget, plug the hole that will start in 10 years, etc. and then lets talk very long term.

January 17, 2008 2:41 PM

newdex said:

stgla:

"Someone needs to unravel the mystery of why Republicans are so successful at using this . . . "

Because cable and network news aren't interested in explaining details or correcting misperceptions.  

January 17, 2008 2:41 PM

Eos said:

actually, she didn't endorse it, she only said she would consider it And even that was said simply in response to a voter's question back in october. what's cynical?

January 17, 2008 2:44 PM

blackton said:

what is cynical is that she is not then stating what her own response would be if, in fact, she disagrees with it. What is her solution to Social Security? Again and again you offer me no response to this. She is running for President and this is after Primaries have started and she has not yet addressed a major issue like this? And you are happy with this omission? And I don't understand your second point, that because it was a response to a voter that it then is ok to lie?

So let us recap, her only public pronouncement on social security is to say she would consider what Obama has now endorsed, she has not issued any statements wherein she has said she has ruled it out and then presented another alternative, and then she rips Obama for endorsing something she herself admittedly considered in such a way as to present it as something that is terrible all in order to mislead NV voters to vote for her? This is the definition of cynical.

Let me be clear, if she sent a flier that criticized Obama's policy that offered her different one that did not include lifting the cap I would not be having this conversation. I disagree with her about Health care but find it absolutely fair to blast Obama for not having mandates. That is straight up policy difference.

I ask you again, what is her solution to Social Security? Or will you accuse me of being rude for asking?

January 17, 2008 4:39 PM