I’ve taken a good deal of criticism (most recently, in an oped in the New York Sun by Larry Hunter of IPI) for my January 25th article in National Review Online arguing that conservatives shouldn’t demand that all tax increases be taken off the table when debating Social Security reform.  I’m being caricatured as someone who’s itching for a tax increase. 

Of course, that’s not true at all.  But I am just as concerned about the massive tax increases that are scheduled under current law as I am to any tax increase that would be included in a Social Security reform package. 

It frustrates me that some Republicans want to ignore the costs associated with letting the status quo reign.  This isn’t a negotiation in which conservatives and liberals are equally affected if no agreement is reached to change Social Security.  The status quo is an enormous loss for those who believe in limited government and free markets, and a big victory for those who want government to expand. 

Right now, many conservatives seem to want to focus only on payroll taxes under Social Security – both the payroll tax rate and the amount of income that is subjected to that payroll tax, which rises every year.  They ignore that in about ten years, Social Security will also begin drawing on general revenues, most of which come from our income tax system.  The money used to “reimburse” the so-called Social Security trust fund is also taxpayers’ money.  We should be just as concerned about how much Social Security is going to draw from general revenues as we are about the money subject to payroll taxes.

Some Republicans have championed plans that include very big accounts, don’t do anything to reduce benefits promised under current law, and pretend that there are no costs associated with paying those benefits.  But in fact those costs are huge and taxpayers will feel them one way or another (for anyone interested in the details of how expensive some of these big account plans can be for taxpayers, see this SSA analysis of one of the big account plans). 

What confuses me most is when exactly did it become the hallmark of conservatism not to discuss reducing government promises and programs?  So-called conservatives recoiled when the President called for very common sense reductions in the growth of future benefits for those in the upper and middle-income brackets.  No one was talking about changing the benefits of those already receiving Social Security or those with low-incomes who will depend on Social Security at retirement (in fact, the President’s plan would have increased benefits for lower income retirees relative to the benefits the current system can afford to pay).  The plan simply would have made Social Security benefits stay the same in real terms for the top 0.5% of earners, instead of growing in excess of inflation, and would have allowed benefits to grow faster than inflation for everyone else.  That alone would have done a lot to reduce government’s – and that means taxpayers’ – liabilities. 

Clearly it would be easier to transition to a system based on personal investment if we didn’t have the liabilities of the current system hanging over us, so why aren’t conservatives willing to talk about ways to reduce the burden of the old system?  Whatever this is, it isn’t conservatism.  It’s political calculation, and a departure from the conservative principles of limiting the cost and reach of government.

But in any case, congratulations to Peter Ferrara and Larry Hunter; the hope of Social Security reform any time during this administration is effectively gone.  With each passing year Social Security’s unfunded liabilities rise by $600 billion, and it becomes more and more costly to move toward a system of personal retirement accounts.  But at least I guess, the amount of income subject to the payroll tax will only go up another $3,000 next year, and that’s supposed to be some kind of victory for the low-tax movement.