The appointment of Mike Mulvaney as the Director of the Office of Management and Budget is one more reason for those who care about the integrity of Social Security to worry. Mulvaney is known as an anti-deficit hack, and was part of the 2010 Tea Party wave. He favored letting the government shut down rather than increasing the debt ceiling. How can his appointment and policy bent be reconciled with Trump's plans to spend a trillion dollars on infrastructure and to increase military spending, and to give major tax cuts to corporations and individuals -- all measures that will greatly increase the deficit? The answer lies in Mulvaney and his associates in Congress going after the only large pool of dough left: funds set aside for Social Security.
True, Trump during the campaign promised to protect Social Security, saying, for example in March that "it's my absolute intention to leave Social Security the way it is. Not increase the age and to leave it as is." However, signs are emerging that Trump may well renege on that promise. His transition team's point man on Social Security is Michael Korbey, a former lobbyist who has spent much of his career advocating cutting and privatizing the program. And his nominee to run the Department of Health and Human Services, Tom Price, has been a champion of cuts to Medicare, Medicaid and Social Security. Last week, Mark Meadows, the Republican chairman of the conservative House Freedom Caucus, stated that the group would push for an overhaul -- which will almost certainly entail cuts -- of Social Security and Medicare in the early days of the next Congress.
This has all happened before. President Reagan, after numerous statements about the evil of deficits during his election campaign, introduced major income tax cuts as president, as well as deep cuts to estate taxes and corporate taxes. His first budget had a deficit of $318 billion, and the deficits would only grow larger. In FY 1983, the deficit ballooned to $500 billion. He then appointed the National Commission on Social Security Reform (also known as the Greenspan Commission). The Commission recommendations led to a Social Security reform deal in 1983 that raised the retirement age, increased the payroll tax, and introduced a tax on Social Security benefits for retirees who also received a pension.
If any elected official openly called for taking away benefits from retiring seniors -- scores of millions of whom would be in poverty were it not for their Social Security check -- and spent the monies on tax cuts that flow mainly to the rich, such a move would engender a major political storm. It would antagonize the elderly in particular, who tend to vote in higher numbers and make more campaign contributions than young people, and hence carry more political weight. However, as Reagan showed and as one should expect to see happen again in the Trump years, the GOP first causes major deficits and then decries their horrible effects, and goes after social programs and safety nets to reduce the deficits. This two-step dance hides that, in effect, Social Security funds are transferred to the rich to the tune of hundred of billion dollars.
Those genuinely concerned about the future of Social Security need not support cuts in benefits to ensure Social Security's future. And they surely need not raise the payroll tax collected from individuals and employers to finance Social Security. What must be done first of all is to treat all income equally! Currently the richer one is, the less one pays as a percentage of income! Social Security tax is collected even from those who earn less than minimum wage, starting with the first dollar one earns. However, those who earn more than $118,500 pay no taxes on any income above that level. Whether one earns $118,500, or $1 million, or $10 million or $100 million, one pays the same amount in Social Security tax. This makes Social Security a very regressive and unfair tax that should be corrected for the sake of elementary justice and the financial health of the system.
How will the Democrats react to a new round of attacks on Social Security? One may say that, historically, they were staunch supporters of Social Security, and that they gained many political points for being so. Not so fast! The Greenspan Commission included an equal number of Democrats and Republicans, and Democrats voted in support of the implementation of the Commission's recommendations. And very recently the New York Times editorial board has called for "modest cuts in [Social Security] benefits." This is not the way to defend a program, especially in the age of social media and populism. Once one side calls for extreme measures, which would in effect lead to the unraveling of Social Security, especially if means tests are introduced, and the other side responds by favoring benefit cuts, but smaller ones--all that remains is the haggling over how much to cut. Social Security benefits should not be subject to negotiations, at least not until all pay their fair share.
Amitai Etzioni is a University Professor and Professor of International Relations at The George Washington University. His latest book Foreign Policy: Thinking Outside the Box, was recently published by Routledge for Chatham House's series "Insights."