The Spectacle Blog

Club For Growth Challenges Rudy on Social Security

By on 9.26.07 | 4:38PM

Just in my inbox:

Dear Mr. Mayor:

As you know, the Club for Growth has not been shy in praising your economic record in New York City. Because of your strong opposition to tax increases and your vocal support for free-market solutions, we were surprised and concerned to read the allegation in a recent Associated Press article that you indicated you would not rule out raising Social Security taxes in order to deal with the program's insolvency.

Such an allegation, if true, together with your refusal to sign Americans for Tax Reform's anti-tax pledge, casts doubt on your commitment to opposing all tax increases.

We urge you to explicitly rule out raising taxes as part of any Social Security remedies. Raising taxes is completely unnecessary in a climate of unprecedented wasteful spending in Washington, and would exacerbate the central problem of the Social Security program, namely, the low rate of return workers earn on their contributions and the dependency it fosters on government. We also favor a proposal that will allow younger workers the option of investing their Social Security taxes in higher-return personal savings accounts. As someone who has spoken at length of empowering individuals when it came to reforming welfare in New York City, we are confident you understand the importance of empowering individuals in their retirement years. Finally, we encourage you to sign Americans for Tax Reform's anti-tax pledge to erase any doubt as to your opposition to tax hikes.

We look forward to hearing a clarification and proposal from you.

Sincerely,

Pat Toomey

President, Club for Growth

UPDATE:

This is how the AP story in question read:

[Giuliani] Refused to rule out raising taxes to offset a Social Security shortfall. He said he would assemble a bipartisan group to develop ideas for fixing Social Security, perhaps even before his inauguration.

"I am opposed to tax increases, but I would look at whatever proposal they came up with and try to figure out how we can come up with a bipartisan way to do it," Giuliani said, adding that potential solutions must come from both parties. "The reality is, I'm more concerned about Medicare and Medicaid than I am with Social Security, because I'm pretty sure we can solve Social Security."

Giuliani would be wise to take the oppourtunity to rule out Social Security tax increases. There is no room for parsing here. From a policy perspective, increasing taxes would hamper economic growth and only defer the structural problems with Social Security, just as every past increase has done. And from a political perspective, given Giuliani's differences with social conservatives, he can ill afford to alienate economic conservatives by being wobbly on tax policy.

I have contacted the Giuliani campaign and will post their response as soon as I have it.

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