Regular people are smarter than pundits, at least when it comes to Social Security

It is critical that we preserve Social Security even if it means increasing Social Security taxes paid by working Americans.

If you agree with this statement, you’re like 82 percent of respondents to a National Academy of Social Insurance poll, including the majority in all age groups, income brackets, and party affiliations.  An even higher share (87 percent) support raising taxes on wealthy Americans to preserve Social Security, which could be done by lifting the cap on taxable earnings, currently set at $113,700.

OK, so let’s fix Social Security and move on to real problems, like health care cost inflation and Kim and Kanye’s questionable taste in photo ops.

Not so fast, say some Very Serious People, who are leery of surveys that lend support for higher taxes. After telling everyone for years that our problems are caused by wanting to have our cake and eat it too, pundits are at a loss when it turns out not to be the case—at least not when it comes to Social Security. Thus, Wall Street Journal economics editor David Wessel, who recently assured an interviewer that “the problem is that the American people want more in benefits than they’re willing to send to Washington in taxes,” dismissed the NASI poll out of hand:

I saw the poll that NASI released this morning and I have to say, some of it I found almost impossible to believe.

Your people asked do you agree or disagree with this sentence:

“It is critical that we preserve Social Security even if it means increasing Social Security taxes paid by working Americans.”

The poll purports to find 82% of the people agree with that, 74% of Republicans agree with that, 78% of people under $30,000 a year and 82% of people over $100,000 a year.

I just don’t believe it. I don’t believe 80% of the people in America wanted to pay higher taxes to fix Social Security, it would have already been done. Right?

I’m sure the poll was scientific and done right, but it’s just an illustration of we are not going to fix this one by public opinion polls.

Despite his polite nod to the survey’s methodology, Wessel may have reason to be skeptical of public opinion polls, which often use leading questions and other dubious tactics. But in this case, the polling was careful and transparent, and the results reinforce what previous polls have consistently found: Americans strongly prefer to close the Social Security shortfall on the revenue side.[1]

NASI found that 70 percent of respondents favored a package that not only closed the shortfall by gradually increasing the tax rate and scrapping the cap on taxable earnings, but also modestly increased benefits across the board, with an additional targeted hike to ensure incomes above the poverty line for retirees who contributed to the program for at least 30 years.

If the alternative is doing nothing, a majority might favor any plan that addresses the shortfall, even one relying on benefit cuts. But that doesn’t seem to be what’s driving these results, since 84 percent of respondents said Social Security benefits were inadequate. Fully three-fourths (75 percent) of respondents said we should consider increasing Social Security benefits, which is notable given the widespread fear-mongering about Social Security’s finances.

Support for specific benefit increases was weaker than support for packages that closed the shortfall and included such measures, though solid majorities favored increasing the cost-of-living adjustment (64 percent) and improving the minimum benefit (57 percent). Almost half (47 percent) favored an across-the-board benefit increase, and more supported this option than opposed it (21 percent). These results suggest that Americans desire benefit increases but are leery of worsening the funding shortfall.[2]

While some benefit increases polled well (and packages containing these increases polled even better) no benefit cuts came close to receiving majority support. Fewer than a third of respondents favored reducing the COLA (30 percent), means-testing eligibility (31 percent), or raising the full retirement age to 70 (28 percent). The least objectionable option was raising the full retirement age to 68, which was supported by 37 percent of respondents and opposed by 34 percent, with the rest undecided.

At best, Wessel’s skepticism is based on circular logic: He won’t believe there’s support for higher taxes until it happens, but it’s hard to raise taxes when the idea isn’t taken seriously by people like him. At worst, it’s cynicism, since he and his core readership are among the six percent of workers who would face noticeably higher taxes if the cap on taxable earnings were lifted—though it still wouldn’t put much of a crimp in their standard of living.

At the very least, Wessel should acknowledge that for most people, 50 cents a week more each year is a small price to pay for a program they rely on so much. When presented with the facts, Americans can make intelligent decisions. Journalists and policymakers alike should treat the public with respect.

 



[1] In fact, the only time that Americans appeared to favor cutting benefits rather than raising taxes, it turned out to be due to a technical glitch.

[2] Another explanation for the strong support for the COLA increase in particular is that the question was worded to suggest that the current COLA doesn’t keep up with the inflation seniors face because of out-of-pocket health costs. While this is a pretty good bet, the actual spending patterns of seniors have not been carefully studied.


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