In Business Week, Howard Gleckman reports that behind the scenes Republicans and Democrats are moving toward a compromise on Social Security. I’d say this has a great deal to do with which Democrats and which Republicans he’s talking to. But, as you’ll see in the article, which I highly recommend you read, he seems to be painting a picture in which carved out private accounts are tossed, the cap is raised, though not removed, and various benefit cuts are imposed.
There’s also this snippet that suggests Ed Kilgore has been on the right track is supposing that Republicans will try to find their way out of this morass by turning it into a tax windfall for upper-income earners …
There are three possible pieces to such a package. Republicans would like to see income limits removed for IRAs, 401(k)s, and especially Roth IRAs, whose withdrawals are tax-free. Democrats want new savings incentives for low-income workers, and lawmakers of both parties see the need to fix defined-benefit pensions.
There’s a lot to talk about here. But, for my part, all of the Democrats’ mental energy should be going into strengthening retirement security for middle-income Americans. Period. That’s really not an issue to hash out with Republicans because most of the things the president’s party wants to do either damages retirement security or is irrelevant to it.
The first and most obvious thing is preserve Social Security. But that’s only the start. Democrats should be thinking of other ways to make retirement more secure. Both on substance and because of what it means to be a party in opposition, that’s where the Democrats should be focusing their energy, not on finding palatable ways to split some difference with the GOP.
