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Barnes on Entitlement Reform

6:12 PM, Jul 12, 2010 • By JOHN MCCORMACK
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Fred Barnes writes in the Wall Street Journal today:

President Obama's commission on reducing the deficit has provoked loathing and laughter. The loathers—conservatives mainly, including me—fear it will recommend a value-added tax as America's only hope of averting a severe debt crisis. The laughter? It comes from the many who expect the commission to deadlock and fail to propose anything substantial.

But there's another possibility, one that would redound to the commission's credit. Senate Republican leader Mitch McConnell, who named three of the commission's 18 members (three other members were chosen by House Republican leader John Boehner), thinks it may recommend significant cost-saving reforms of Social Security.

No, there's little likelihood it will endorse personal investment accounts carved out of payroll taxes paid by individuals into the Social Security system. Democrats—12 members were picked by Mr. Obama or Democratic leaders in Congress—are dead set against private accounts. And Republicans can be counted on to oppose a substantial increase in the level of income subject to the Social Security payroll tax, much less agree to a VAT. A recommendation by the commission requires 14 votes.

One reform that could win bipartisan support would, over time, raise the Social Security retirement age to 70. An extension of retirement age to 67 from 65 was pushed in 1983 by the Greenspan Commission, along with a boost in the income base for payroll taxes. President Reagan backed the changes and Congress enacted them.

A second reform, bolder and more controversial, would means-test Social Security, gradually slowing the growth of benefits for the more affluent but sparing those with lower incomes. The model for this is the Pozen plan, the brainchild of Robert Pozen, a former vice chairman of Fidelity Investments and influential Social Security reformer.

Read the rest here.

Barnes writes in the latest issue of THE WEEKLY STANDARD that Republicans should embrace Paul Ryan's Road Map.

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