SOCIAL SECURITY….At the Democratic debate yesterday, Tom Vilsack proposed a slow reduction in future Social Security benefits by switching from wage indexing to price indexing. Scott Lemieux is scratching his chin over this:
What puzzles me about Tom Vilsack’s decision to end his campaign yesterday by endorsing price indexing for Social Security is what makes him think it would work….I don’t have a strong idea of what would appeal to Middle America….But I do understand at least one thing: running to the right on an extremely popular entitlement program in a Democratic primary is remarkably stupid.
I’ll hazard a guess here: Vilsack proposed this because he believes it’s a good idea. It’s worth remembering that Vilsack is a former DLC chair and his politics are fundamentally DLC centrist on domestic issues. And it’s further worth remembering that reducing future benefits is the kind of compromise position that DLC types have been proposing for years. Here’s a Will Marshall piece from 1999, back when Bill Clinton was proposing a Social Security overhaul:
Congress should embrace a gradual increase in the retirement age to 70 by 2030….Less dramatic but still important ways to close the funding gap include bringing state and local employees into the system and adjusting the Consumer Price Index downward.
Adjusting the CPI downward is in the same ballpark as changing the indexing scheme, and until recently proposals like this were pretty standard fare from centrist Social Security wonks. In fact, they still are in some quarters. If I had to guess, I’d say that Vilsack has long believed this is a good idea, and hasn’t quite figured out that the ground shifted after the 2005 Social Security debacle and this stuff no longer flies. Betcha he figures it out now, though.