Soc Sec XXV: Advisor Jason Furman on Obama’s Plan

For those of you not in the mood for numeric wonkery Biggs also points us to Furman’s response to Larry Lindsey’s Obama Turns FDR Upside Down. In an letter included in Obama’s Proposals for Social Security Considered Furman gives us this:

There is much to disagree with in Larry Lindsey’s June 20 op-ed, “Obama Turns FDR Upside Down.” Barack Obama’s proposal to extend the life of Social Security is fully consistent with the spirit of Social Security, just as the elimination of the payroll tax cap for Medicare has not undermined support for that program. Mr. Obama’s proposal would also help to restore long-run fiscal balance, contributing to a strong and growing economy. It is modeled on a proposal floated by Sen. Lindsey Graham — a proposal that John McCain publicly said he could support.

More important, Mr. Lindsey is wrong about Sen. Obama’s policy on the payroll tax. Mr. Obama has stated that he would like to extend solvency while protecting middle-class families and asking those making over $250,000 to pay their fair share. As president, he would work with Congress on a bipartisan basis to design the details of such a change, including the tax rate, how it is phased in over time, the linkage between these tax payments and benefits and other critical design elements of this plan. He has not proposed a 12.4-percentage point tax increase on earnings above $250,000.

Jason Furman
Economic Policy Director
Obama for America

My translation of this is “We don’t really have a Social Security plan. We just want to assure everyone that it is progressive, i.e. paid for by the wealthy”. Otherwise this is pretty thin gruel.