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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Re-Testing the Third Rail

As anyone paying attention to the Democratic presidential contest is probably aware, there is a massive Greek Chorus out there, spanning the blogosphere and the MSM, telling Barack Obama that he needs to get tougher and more specific in outlining his differences with Hillary Clinton (I may be one of the few bloggers who hasn’t climbed on that bandwagon). But on the Left, at least, there probably isn’t much happiness about the precise way in Obama has chosen to take their advice.
Obama’s running an ad in Iowa–where the very latest major poll shows him effectively tied with Clinton–implicitly accusing HRC of putting her “finger to the wind” on key issues, with Social Security solvency being a leading example. Obama’s criticism of Clinton on SocSec has been more explicit in speeches and press events over the last few days.
So what is Obama offering on Social Security that Clinton’s not? The ad and his campaign’s materials say he wants to eliminate the “wealth exemption” for Social Security payroll taxation, which refers to the current $97,500 “cap” on earned income subject to the tax. But it’s not clear at this point if he is proposing to abolish the cap altogether, or, like John Edwards, to expose income above $200,000 to the payroll tax, while leaving marginal earned income between $97,500-$200,000 untaxed (sometimes called the “doughnut hole” approach). As it happens, HRC has expressed a willingness to “consider” monkeying with the payroll tax “cap”–in the context, as everyone always says, of a “comprehensive” approach (code for Republicans accepting a payroll tax increase while Democrats accept some sort of benefit cuts).
What seems to be a bit new about Obama’s line is that he’s discarded all the usual “comprehensive reform” language and is aggressively, not defensively, promoting a payroll tax increase while rejecting significant benefit changes. This makes many Democrats nervous because (a) unlike a rollback in the Bush income tax cuts, this is unmistakably a tax increase, which Republicans will point out every five minutes if Obama is the nominee; (b) abolishing the cap, instead of creating a “doughnut hole,” would represent a tax increase on millions of upper-middle-income earners, often the same people getting hit by the Alternative Minimum Tax; and perhaps most importantly (c) lots of Democratic activists, particularly after the campaign against Bush’s 2005 privatization proposal, really can’t stand any sort of talk about Social Security solvency, considering it either a non-problem or a “conservative meme.”
So why is Obama taking this controversial tack? Much of the aforementioned Greek Chorus, after all, wants Obama to go after HRC from the Left, particularly on national security and/or anti-corporate issues, not from the “entitlement reform” Center (see this post from Josh Marshall, one of the leaders of the successful fight against Bush’s 2005 SocSec initiative, on why he thinks this is a really bad idea).
I don’t have any inside knowledge here, but one reason Obama might want to talk about Social Security stems from the demographics of the Democratic electorate, particularly in Iowa. The University of Iowa poll I linked to above shows Obama with an impressive 41% from likely Caucus-goers under 44 (with 19% for HRC and 16% for Edwards). Among voters between 44 and 60, HRC leads him 31% to 21% (with an impressive 26% for Edwards). And among over-60 voters, HRC has 31%, Obama 24%, and Edwards 16%. Given the vast skewing of the Iowa Caucus turnout towards oldsters, Obama’s path to victory has two obvious elements: boosting turnout among younger voters, and gaining stronger support up the age ladder. His field organization is keyed to the former goal. And it’s beginning to appear his policy message may be keyed to the latter.
Remember that Obama has already proposed exempting $50,000 in income for seniors from income taxation. Perhaps his campaign has decided that biting the bullet for a tax increase to maintain Social Security benefits will give him a crucial boost in the geezer- and near-geezer vote.
In any event, Democrats nervous about candidate talk on Social Security–beyond adamant refusal to consider it a problem–should remember that this will inevitably be a general election issue. And given the stubborn willingness of the Republican presidential field to embrace Bush’s unpopular approach to Social Security, it’s an issue likely to favor Democrats.

One comment on “Re-Testing the Third Rail

  1. noexpert on

    From what I see, Obama is using the soc. sec. issue to present himself as a straight talking leader, in contrast with Clinton’s evasiveness. I’d also like to see him focus his straight talk on big disagreements with GOP foreign policy on Iran and Iraq, rather than small policy differences with Hillary. Restoring government, including much greater transparency, would be another great issue for Barack, given all the abuses of Bush administration. Then we could all see whether he has the political skills necessary to respond effectively to attacks/smears from the right. I don’t want to see the dem nominee taken down again and currently this is the one area in which I prefer Hillary.

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