Labor & Employment Law

WaPo Whopper on Trumka, Social Security and Taxes

By Mike Hall

Here?s a great way to save some Social Security money. Let more folks die before they can get a check.  Cold? Maybe. But pretty darn effective according to Washington Post columnist Ruth Marcus.

Marcus seems to have taken offense at AFL-CIO President Richard Trumka?s objection to raising the retirement age and his call for the better-off among us to pay the Social Security tax on all their income, just like the rest of us do.

Trumka recently meet with the Post?s editorial board, including Marcus, and also testified last week before the federal budget deficit commission. In her WaPo column today, Marcus writes that Trumka ?erupts? during the editorial board meeting when asked about raising the Social Security retirement age. She says he tells the board that would have been be a ?death sentence? for workers like his late coal mining father whose 44 years in the mines left him with a case of black lung, but also a union pension check and Social Security.

Marcus writes that maybe there?s room for a little sympathy for coal miners, but then holds up the example of the ?middle age assembly? sitting around with her at the ?gleaming conference table,? as great evidence that boosting Social Security?s retirement age wouldn?t be so tragic.

Well, not all of us go to work around ?gleaming conference tables? or enjoy what are probably pretty darn decent health benefits and not-too-shabby paychecks as do Marcus and her colleagues. And good for them. They?ve no doubt worked hard to get there.

But they probably are not counting on that Social Security check as a major element of their retirement security as are tens of millions of workers beyond the Beltway?heck, here within the Beltway, too.

BTW, those grocery clerks, truck drivers, teachers, road crews, nurses, factory workers and other regular folk are paying a big part of  Social Security?s bill. Yet Trumka?s call to even out the fairness of the Social Security payroll tax doesn?t sit too well with Marcus.

Currently all workers pay the Social Security payroll tax on the first $106,000 of their earnings. Earnings above $106,000 are exempt from the Social Security payroll tax. A nice tax cut for those on the top side of $106,000. But that 6.2 percent tax takes a good chunk out of the salary of most workers.

Trumka, and many economists, say that raising or eliminating that cap not only would be more fair, but would also be a hefty boon for the Social Security Trust Fund that deficit hysterics are making such a big fuss over. Marcus however, calls it Trumka?s ?one-sided, tax-the-rich reflex? solution to all economic problems.  Let Dean Baker at the Center for Economic and Policy Research (CEPR) explain.

Marcus also implies that Trumka believes that the country’s fiscal problems can be solved exclusively by taxing the rich. This is not true. Trumka and the AFL-CIO have consistently been strong proponents of measures that would make the U.S. health care system more efficient, such as a public health insurance option and negotiated prices for prescription drugs.

If per person health care costs in the United States were the same as in any other wealthy country, the United States would be looking at huge long-term budget surpluses rather than deficits.

It is important also to note that measures that reduce the trend toward growing inequality, such as improved corporate governance that reins in CEO pay or a trade policy that is not designed to increase inequality, would also have beneficial budgetary impact. As more income goes to those at the middle and bottom, there would be less need for various government transfer programs. It would be useful if Post columnists would try to directly address the agenda of the unions, rather than caricature it in order to discredit it.

Well said.

One last thing to set the record straight. As Trumka told the budget deficit commission, Social Security is not related to nor the cause of the nation?s budget deficit. We need to solve the nation?s pressing short term problem of creating jobs, that will go a long way to solving the long term debt problem.

Full post as published by AFL-CIO NOW BLOG on July 07, 2010 (boomark / email).