Wiring for the Washington Post, Matt Miller speaks favorably of the New America Foundation proposal for expanded Social Security, an additional flat dollar benefit that would increase the size and cost of the program by around 75 percent.
I’m not a fan of the idea – as I discuss here, I think it will cost too much while hurting the economy – but Miller hits on a second issue, of how to pay for it. Miller says,
One way to fund it would be through a chunk of the proceeds from the value-added tax that’s almost certainly coming in an aging America.
This highlights Washington’s perennial problem: starting a new program before you’ve paid for the ones you’ve already got. We’re already well short of the revenues we need to pay for the Social Security, Medicare and Medicaid programs we’ve got, and the shortfalls in those entitlements would be enough to swallow up pretty much the whole of any politically-palatable VAT plan. To start allocating the proceeds of a tax we don’t even have to a new entitlement before sorting out how to pay for the underfunded entitlements already on the books seems ill-advised.