WASHINGTON, D.C. — Sen. Brian Schatz is expected to announce at a press conference Thursday that he’s backing a bill that would strengthen Social Security by boosting taxes on rich people.

The legislation faces an uphill battle and seems like a long shot to pass in the Republican House.

But it will be popular among many progressives, and the event underscores how reaching out to the left could be critical in the run-up to Schatz’ showdown in next year’s Democratic primary against Rep. Colleen Hanabusa.

Indeed, as University of Hawaii at Manoa political science professor Neal Milner said, the staunchest and most “extreme” candidates, regardless of party, tend to win their primaries these days. To win the Democratic primary, you need to win progressives.

Backing the Social Security proposal by Sen. Tom Harkin, D-Iowa, could help Schatz in a number of ways. The measure would raise benefits by about $60 or $70 a month and then provide for higher annual cost-of-living increases than those currently given. These changes are much more palatable to progressives than proposed reforms that would cut benefits and reduce cost-of-living increases.

So, to pay for the increases — and to raise money for a program that’s on course to run out of money in 2035 — the proposal would make the rich pay more. In this case, the Harkin proposal would remove a longstanding cap that exempts people who make more than $130,000 from having to pay into Social Security.

“Social Security is a promise made by the federal government to the American people, and yet, we find so many retirees barely staying afloat,” the statement quotes Schatz as saying. “It is our responsibility to ensure that retirees are receiving Social Security checks that reflect the cost of living and that the program remains solvent for future generations.”

The Harkin measure is backed by groups on the left nationally, including MoveOn.org and the Progressive Change Campaign Committee, both of whom are expected to be at Schatz’s side at Thursday’s press conference.

Adam Green, co-founder of the Progressive Change Campaign Committee, said in a statement to Civil Beat, “Every week, we hear about corporations that cut the pensions they promised to workers. As a result, Social Security has never been more important. Senator Harkin’s bill, which Senator Brian Schatz was among the first to support, will expand Social Security benefits for our grandparents and veterans. And by requiring the wealthy to pay the same rate into Social Security as the rest of us, Harkin and Schatz would pay for the benefit increase and have trillions left over to keep Social Security strong for decades.” Last week, the group pushed the idea at rallies in Kentucky, Massachusetts, New Jersey and Texas.

UPDATED: Stemming some of the advantage Schatz is trying to gain, Hanabusa on Thursday said she has also supported eliminating the cap so more people with higher incomes pay into Social Security. She also said she opposes cutting Social Security benefits.

In a statement Wednesday night, she said, “I am committed to ensuring that our hardworking retirees receive the benefits they earned and expect into the future and will continue to work to defeat short-sighted attempts to balance the budget on the backs of seniors… In Hawaii, more than 30 percent of Social Security beneficiaries rely on Social Security for the majority of their income – if we reduce their benefits we will be compromising the independence and livelihood of thousands of retirees and disabled workers.”

Schatz is also hoping to to draw a contrast with a Hanabusa vote on Feb. 6 in favor of an amendment advising President Barack Obama to use the Simpson-Bowles deficit reduction plan as a guide in writing his budget.

The plan offered by President Barack Obama’s National Commission on Fiscal Responsibility and Reform — chaired by former Clinton White House Chief of Staff Erskine Bowles and former Republican Sen. Alan Simpson — included several controversial ideas. Among them, raising the Social Security retirement age to 67 for people born after 1960. The plan also called for changing the way that cost-of-living increases are calculated by adopting a method called “chained Consumer Price Index.” The method — which takes into account the idea that people seek cheaper alternatives for goods when prices go up — reduces the amount of annual Social security payment increases. It is opposed by groups ranging from labor to the AARP.

Hanabusa said Thursday that, as she told Civil Beat at the time, she supported aspects of Simpson Bowles that would reduce the deficit through a balanced approach of spending cuts and revenue increases. The amendment vote was meant to be in response to Republican opposition to any tax increases that was holding up a budget deal.

It was not meant to be a statement on her stance on Social Security, she said. Hanabusa said she opposes raising the retirement age. She said she has co-sponsored a resolution and signed a congressional letter opposing using the chained CPI.

“I believe that switching to the chained-CPI method will eventually reduce benefits over time, which will hurt those that already rely on fixed incomes from Social Security,” Hanabusa’s statement said.

Hanabusa cited a Hawaii Public Radio congressional debate last year with Charles Djou, in which she said she doesn’t agree with all of the Social Security proposals recommended by the Simpson-Bowles commission. She also says she favors raising the cap exempting higher-wage people from paying into Social Security. “To say that if you earn $106,00 and at that point you don’t pay any Social Security, that doesn’t help the fund … It’s about all of us to share that burden.”

The Harkin Social Security reform proposal comes amid a national debate over what the Bipartisan Policy Center called Social Security’s “unsustainable” fiscal outlook. The near-future retirement of the Baby Boom generation will increase the number of people who receive Social Security.

And while people are living longer, workers are retiring earlier. The result: less money is being paid into Social Security and more is being taken out. Additionally, the policy center said, the growing disparity between rich and poor also means that more people are exempt from paying the Social Security tax.

Although Social Security formerly collected more money in taxes than it paid out, the Congressional Budget Office estimated that Social Security’s deficit will reach nearly $40 billion this year and exceed $900 billion within a decade. Without changes, the policy center said, the trust fund will be exhausted in 2035, forcing an an across-the-board 25-percent cut in monthly benefits.

Reflecting opposition from progressives to the Simpson-Bowles plan, the left-leaning Center for Budget and Policy Priorities said that it “relies far too much on deep benefit cuts to restore solvency to the program.”

The Harkin plan that is supported by Schatz, however, faces major obstacles to passage, such as President Obama’s support for the “chained CPI” in the hopes of reaching a broad deficit reduction deal with Republicans. Obama’s hopes for a grand bargain will likely not include raising taxes on the wealthy, given that undoing the exemption on the wealthy will be a tough sell to the Republican-controlled House. Conservative organizations like the American Enterprise Institute have opposed doing so, arguing in favor of reducing benefits.

Despite Hanabusa’s reassurances Wednesday night, Schatz’ appearance on Thursday appears likely to play to the all-important progressives at an early but important time in the campaign.

In addition to the Progressive Change Committee Caucus, the Schatz-backed Harkin plan has the backing of Democracy for America, a political organizing committee founded by Howard Dean, as well as the AFL-CIO.

Though Schatz has won the endorsements of most unions and environmentalists, Milner said the positioning comes at a time when it is still too early to know who will end up being perceived as the progressive candidate.

By backing Harkin’s proposal, though, Milner said Schatz is not only reaching out to progressives, but also to seniors. “It’s a two-fer,” he said.

About the Author