Happy Anniversary Social Secuirty

On The Eve Of The Anniversary Of Social Security's Inception, Can Obama Explain His Shifting Social Security Proposals And Contradictory Voting Record?

Today is the 73rd anniversary of Social Security; It Was Signed Into Law On August 14, 1935.

"President Franklin Roosevelt (Democrat)signed the Social Security Act into law on August 14, 1935." (Social Security Administration Website, www.ssa.gov, Accessed 7/13/08)

Obama: "[C]onventional Thinking In Washington Says That Social Security Is The Third Rail Of American Politics. It Says You Should Hedge And Dodge And Spin, But At All Costs, Don't Answer." (Jason Clayworth, "Clinton Sidesteps Social Security Talk, Obama Says In D.M.," Des Moines Register, 10/28/07)

OBAMA'S SHIFT ON SOCIAL SECURITY TAXES

GENERAL ELECTION SHIFT: Obama Originally Planned To Tax All Earnings To Fund Social Security - He Now Plans To Exempt Earnings Between $102,000 And $250,000:

Obama Said He Wouldn't Raise Taxes On People Earning Less Than $250,000, But "Found Himself In An Apparent Contradiction" With His Plan To Apply The Payroll Tax To All Earnings. "Obama started his campaign saying his plans would not increase taxes for people earning less than $250,000. But he found himself in an apparent contradiction by saying he would tax all income to fund Social Security, not just income up to $102,000, as is now the case." (Abdon M. Pallasch, "Tax Facts: Obama Vs. McCain," Chicago Sun-Times, 6/30/08)

So Obama Altered His Plan To Exempt Income Between $102,000 And $250,000 From Taxation. "So now, Obama's plan calls for no Social Security tax on income between $102,000 and $250,000, but all income above $250,000 would be taxed for Social Security." (Abdon M. Pallasch, "Tax Facts: Obama Vs. McCain," Chicago Sun-Times, 6/30/08)

"Prior To [June 13, 2008], Obama Had Kept Open The Possibility That He Would Impose The 12.4 Percent Social Security Tax On Income As Low As $97,500, The Annually Adjusted Ceiling In Place In 2007." (Teddy Davis, Sunlen Miller, and Gregory Wallace, "Obama Kisses Billions Goodbye," ABC News' "Political Radar" Blog, blogs.abcnews.com, 6/18/08)

GENERAL ELECTION SHIFT: Obama Had Suggested Applying The 12.4 Percent Tax On All Income To Fund Social Security, Now Plans To Apply A 4 Percent Tax Only To Income Over $250,000:

In September 2007, Obama Suggested Applying The 12.4 Percent Tax On All Earnings. "While Obama has suggested imposing the 12.4 percent tax on all income above $97,000 per year, Edwards would only impose it on those making more than $200,000 per year." (Teddy Davis, "Obama Floats Social Security Tax Hike," ABC News, abcnews.go.com, 9/22/07)

Obama: "If We Kept The Payroll Tax Rate Exactly The Same But Applied It To All Earnings And Not Just The First $97,500, We Could Virtually Eliminate The Entire Social Security Shortfall." (Sen. Barack Obama, Op-Ed, "Fixed-Income Seniors Can Expect A Tax Cut," Quad City Times [IA], 9/21/07)

In July 2008, Obama's Campaign Said The Social Security Tax He Would Impose On Income Over $250,000 Would Not Exceed 4 Percent. "Under current law, income up to $102,000 a year is taxed for Social Security. Obama would create a 'doughnut hole' by not imposing new Social Security taxes on income between $102,000 and $250,000. His aides said income exceeding $250,000 would be taxed at a rate of 2 percent to 4 percent, rather than the 6 percent tax that people pay toward Social Security on income below the $102,000 cutoff, which is matched by their employer's paying a 6 percent tax. Employers would probably pay an additional tax, but the total tax paid by both employee and employer would not exceed 4 percent of the amount of income earned over $250,000." (Perry Bacon Jr., "Candidates Diverge On How To Save Social Security," The Washington Post, 7/8/08)

Obama's Social Security Plan Went From Solving The Shortfall To Barely Making A Dent:

October 2007: The Obama Campaign Said Eliminating The Cap Would Fund Projected Shortfalls For At Least 75 Years. "Projections provided by Obama's campaign staff say that uncapping the payroll tax would solve projected shortfalls for at least 75 years." (Jason Clayworth, "Clinton Sidesteps Social Security Talk, Obama Says In D.M.," Des Moines Register, 10/28/07)

The Urban-Brookings Tax Policy Center Estimates That Eliminating The Earnings Cap Would Increase Taxes By More Than $1.4 Trillion Over 10 Years. (The Urban-Brookings Tax Policy Center, "Options To Adjust Social Security Earnings Cap, Static Impact On Individual Income And Payroll Tax Liability And Revenue ($ Billions), 2009-18," www.taxpolicycenter.org, 1/2/08)

According To The Congressional Research Service, Social Security Could Be Solvent For 75 Years If The Cap Was Lifted But Income Above $102,000 Did Not Count Towards Benefit Calculations. "If all earnings were subject to the payroll tax but the base was retained for benefit calculations, the social security trust funds would remain solvent for the next 75 years. However, the link between contributions and benefits would be broken." (Debra Whitman, "Social Security: Raising Or Eliminating The Taxable Earnings Base," Congressional Research Service, 5/2/05)

July 2008: Obama's Recently Adjusted Proposal Would Fail To Ensure Social Security's Long-Term Solvency. "Experts predict that [Obama's] proposal would make up less than half of the $4.3 trillion shortfall social security is expected to face over the next 75 years." (Perry Bacon Jr., "Candidates Diverge On How To Save Social Security," The Washington Post, 7/8/08)

Taxing Income Over $250,000 At A Rate Of 4 Percent Would Equal A $203 Billion Tax Increase Over 10 Years - Significantly Lower Than Obama's Original $1.4 Trillion Tax Increase. (RNC Research; Teddy Davis, Sunlen Miller, and Gregory Wallace, "Obama Kisses Billions Goodbye," ABC News' "Political Radar" Blog, blogs.abcnews.com, 6/18/08)
OBAMA'S CAMPAIGN RHETORIC AT ODDS WITH HIS SOCIAL SECURITY VOTING RECORD

Obama Claims He Will "Eliminate The Income Tax On Social Security" For Seniors:

Obama: "And for seniors in particular, what I want to do is eliminate the income tax on social security. That is something that we weren't taxing up until 1993, and if we could eliminate that income tax, that would save the average social security recipient up to $1,400 a year, which would help to pay for a lot of these rising costs." (Sen. Barack Obama, Remarks At A Campaign Event, Columbia City, IN, 5/1/08)

But In The Senate, Obama Voted To Keep Higher Income Taxes On Social Security Benefits:

Obama Voted At Least Three Times Against Repealing The 1993 Income Tax Increase On Social Security Benefits. (S. Con. Res. 70, CQ Vote #52: Rejected 47-53: R 47-2; D 0-49; I 0-2, 3/13/08, Obama Voted Nay; H.R. 2, CQ Vote #28: Motion Rejected 42-51: R 41-4; D 1-45; I 0-2, 1/25/07, Obama Voted Nay; S. Con. Res. 18, CQ Vote #74: Adopted 55-45: R 50-5; D 5-39; I 0-1, 3/17/05, Obama Voted Nay)

The 1993 Measure Raised Taxes On Retirees Earning As Little As $34,000 By Increasing The Portion Of Social Security Benefits Subject To Income Taxation From 50 Percent To 85 Percent. "The 1993 measure increased to 85 percent, from 50 percent, the portion of Social Security benefits subject to income tax when a retiree's income, including half of his or her annual Social Security benefit, exceeds certain levels. Those levels are $34,000 for a single person and $44,000 for a married couple." (Richard W. Stevenson, "G.O.P. Seeks To Repeal Tax On Social Security Benefits," The New York Times, 7/17/00)

NOTE: Obama's Tax Plan Acknowledges That 1993 Tax Increase On Social Security Benefits Places Strain On Lower And Middle Income Seniors. "Lower and middle income seniors are struggling as their expenses on health and energy skyrocket while their incomes do not keep pace. This strain has been greater since 1993, when taxes on social security benefits were raised. Millions of seniors saw their net benefits go down." (Obama For America, "Barack Obama: Tax Fairness For The Middle Class," Fact Sheet, www.barackobama.com, Accessed 1/8/08)

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