Privatize SS... but with a more progressive tax

There is a big debate on the left side of the blogosphere about what our stance on Social Security should be. Kevin Drum, Josh Marshall and others have argued that we need to make clear that Social Security is not in a crisis, and that it only needs a few tweaks to be right again. This argument has the virtue of being true. On the other side, Garance Franke-Ruta and Matthew Yglesias at Tapped have been arguing that the perception that Social Security is in crisis is too entrenched, and that this is an argument we are bound to lose.  Regrettably, that is true too.

Let me sketch out what a Democratic position on Social Security might look like, and how it would be more likely to win than a 'just say no' strategy.

Details after the jump...

We should set conditions that would both make the plan acceptable, AND make it close to impossible for the other side to accept. Here is what our bottomline should be:

• We shouldn't go one penny into debt to pay for transition costs. "Pay for it, Mr. President. Passing trillions in debt to the next generation is no way to fix social security."
  
• Don't raise retirement age. "People that do hard, physical work for a living shouldn't work until they're 70."
  
• Don't cut benefits. "Democrats will never agree to hurting seniors."
  
• Circumscribe investment options. "We can't allow investments so risky that they leave many seniors impoverished."

What does this leave as funding options? Probably just raising the level at which income is taxed to $85K or $95K. Would the Republicans go for it? Probably not, but if they don't then they're the debt hogs and we're the responsible, fiscally sound party.

And if they do agree to funding this with progressive taxation, is that the apocalypse? I can't consider that it is. First of all, it isn't that different from the Clinton plan to put 15% of Social Security funds into the stock market, instead of just treasuries.  Yes, that plan differed in critical respects from the Republican plan that has been sketched out so far, but it's a little hypocritical of many of us who supported that plan to now say the stock market is too risky.

Also, it would be easier to hold Democrat votes around this position. Conservative Democrats in Republican districts wouldn't need to worry that they would be painted as obstructionists.

Our rallying cry is clear: "You don't play the stock market with your credit card, why should your goverment?"