In his 1978 Harvard University honors thesis, current treasury secretary nominee and White House chief of staff Jacob “Jack” Lew wrote that Social Security payments should be a guaranteed right, regardless of whether the program’s “trust fund” contains enough money to distribute to beneficiaries.
And progressive income taxes, he argued — not payroll taxes — should be used to fund the program to the point where America would guarantee benefit payments beyond what taxpayers have paid into the system.
“Old age and Medicare benefits are guaranteed as a matter of right,” he noted, “even though many recipients draw more benefits than they have paid in contributions.”
TheBlaze has obtained a copy of his thesis, titled “The Ideology and Politics of Old Age Insurance in the United States.” In it, Lew complained that a belief in “the tradition of self-support and individualism” has stopped the federal government from raising taxes to fund a broader set of Social Security benefits.
Progressive taxation, he said, should replace payroll taxes as a means of funding “social insurance.”
Congress was “reluctant to abandon the principle of self-supporting old age insurance,” Lew claimed, because of a misguided focus on “financial solvency.”
“The social security trust fund, it is argued, must either be made secure or drastic changes will be necessary. Among the changes most often suggested are means tests, incentives for people who choose to remain in the workforce, reduced benefits, and general revenue financing.”
Lew dismissed these proposals in favor of more “experimentation” — including new tax approaches to funding the program.
“Congress has allowed regressive taxes to finance assistance payments, while denying progressive taxes for insurance benefits,” he lamented.
“The logic of this course is difficult to understand but appears to represent a continuation of the deeply rooted belief in the tradition of self-support and individualism which for so long blocked passage of social insurance.”