Friday, October 1, 2010

The Do-Nothing Caucus Emerges

National Review's Ramesh Ponnuru points to this article, which highlights that "105 Democratic Lawmakers Reject Any Social Security Reform."

In a conference call with reporters Thursday, Sens. Sherrod Brown, D-Ohio, Bernie Sanders, I-Vt., and Reps. John Conyers, D-Mich., Raul Grijalva, D-Ariz., and Dan Maffei, D-N.Y., announced they had a petition signed by 105 members of Congress pledging opposition to any kind of reform. (Sanders, while technically an independent, caucuses with the Democrats.)

"We strongly believe that cuts to Social Security benefits must not be part of any recommendations or policymaking. We believe that Social Security should never be privatized and that the retirement age should never be raised," Brown said.

Reading the article, I don't think it's fair to say these folks oppose any reform; just any reform other than tax increases. And since most all of them wouldn't raise payroll tax rates, that implies raising or eliminating the tax cap.

In drafting testimony for a Congressional hearing (that sadly was postponed) I calculated that, combined with tax increases already scheduled under current law, eliminating the tax cap would raise the top marginal tax on earned income inclusive of state income taxes to around 61 percent, with some states hitting 66 percent. And that's before we've done anything to fix Medicare and Medicaid. If the Do-Nothing caucus is willing to solve those entitlements with big benefit cuts then I guess you can make things add up, but otherwise I think they've got high earners pretty much tapped out.

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