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So What’s the Deal with McCain and Social Security Taxes?

July 31st, 2008 . by economistmom

The blogosphere’s been all atwitter for the past few days, asking whether Senator McCain is a “flip-flopper” when it comes to his position on Social Security.  (I first caught on through Len Burman’s post on the TaxVox blog.)  But if one really listens to what McCain’s said, and who he thinks he’s saying it to, I don’t think it sounds like flip-flopping at all.  As example, from today’s ABC News blog (my emphasis added):

“In any negotiation that I might have, when I go in, my position will be that I am opposed to raising taxes. But we have to work together to save Social Security,” McCain said at a fundraiser Wednesday evening in Kansas City.

To his “conservative base,” McCain is pledging that his (starting) position is that he does not want any tax increases.  To his wise policy advisors and his “moderate base” (those who support him as the “maverick” on fiscal policy–who would like to believe that deep down he’s still that same John McCain who voted against the Bush tax cuts because of their fiscal irresponsibility), he reassures them that he knows that he can’t stand firm on his starting position on “no new Social Security taxes” if as President (versus someone just campaigning to be President) he expects to work with a Democratic Congress and actually accomplish something.

I have faith that a similar phenomenon is going on with the Obama campaign and their “no benefit cuts” position on Social Security.  It’s not an identical phenomenon though, because a President Obama would expect to be working with a Democratic Congress as well, so there’s a bit more danger of things staying “off the table.”

4 Responses to “So What’s the Deal with McCain and Social Security Taxes?”

  1. comment number 1 by: Andrew Biggs

    If anyone needs a case study on how the presidential primaries make it hard to make sensible policy after the election, Social Security in 2008 is it. Obama’s had to promise (as recently as today) that he won’t raise the retirement age or cut benefits, and his tax plan is basically just a nibble out of the long-term deficit. McCain is trying to say the right things — I’ll talk to everyone, even if I don’t agree with them — but the Club for Growth crowd goes bananas. A commission is looking better and better!

  2. comment number 2 by: Brooks

    Well, the McCain campaign is displaying (split personality) schizophrenia on this matter:

    From the Associated Press, 7/31/08:

    McCain’s aides worked overtime to contain the damage.

    “He’s said again and again that he’s not going to raise taxes,” spokesman Tucker Bounds told Fox News, a statement of fact that stopped short of a promise not to do so in the future.

    Bounds also said Social Security was a different kind of debate and to “really take this challenge on, we’re going to have to be honest.”

    In conclusion, he added: “There is no imaginable circumstance where John McCain would raise payroll taxes. It’s absolutely out of the question.”

  3. comment number 3 by: Invest this!

    This seems very similar to Obama appearing to oppose FTAs earlier in the election. Now he’s clearly sliding towards the middle in terms of his free trade positions.

  4. comment number 4 by: coberly

    we have to hope that both McCain and Obama are telling the lies they think will get them elected.

    Biggs should be glad to know that I agree with him that Obama’s proposal to raise the cap is a miserable fraud.

    But then I think that raising the retirement age is simply mugging old people who can’t fight back. And cutting benefits that are already set at barely subsitence is another cruel way to destroy Social Security by making it insufficient for people to retire on.

    You don’t need “new taxes” to save social security. All you have to do is recognize that if people are going to live longer it makes sense for them to save more. The only insured vehicle for saving more is the Social Security tax. And the amount that will probably be needed is 2% of nominal pay.

    That would be about 20 dollars per week more tax on an income that will be 300 dollars a week more than it is today.