A Republican senator promoting the idea of a payroll tax increase is under fierce attack by some conservatives.
Sen. Lindsey Graham’s proposal to lift the $90,000 cap on payroll taxes to pay for Social Security reform has prompted the conservative Club for Growth to blanket his home state of South Carolina with television ads accusing the first-term Republican of proposing a “huge tax hike” that would hurt families and small businesses.
“Why Lindsey Graham? He is the one Republican who is by far the most outspoken advocate of lifting this cap and raising it very significantly. This would be a devastating tax increase,” said former Rep. Pat Toomey, who now serves as the club’s president. “He has designated himself in this role as the person who’s going to try to bring the Democrats on board. But what has it accomplished? I think what it does is make it very difficult to get Democrats onto a good program, which is a reform that does not include a big tax increase.”
Graham offered his proposal last fall in an effort to woo moderate Democrats, who he thought might join with President Bush to reform Social Security. But Graham’s plan includes lifting the current $90,000 cap on payroll taxes–a plan conservatives, including the Club for Growth, have derided as a huge marginal tax increase. A Heritage Foundation analysis in February concluded that lifting the cap to $125,000 would increase taxes for 7 million middle-class families.
The ad pinpoints Graham as an obstacle to Bush’s effort to add personal retirement accounts to Social Security. The 30-second spot declares: “There are good ideas . . . and there are bad ideas. President Bush wants to let workers save for retirement through Social Security personal accounts. Good idea. Sen. Lindsey Graham wants to include a huge tax hike. Really bad idea. Lindsey Graham’s tax hike would hit millions of families, wipe out much of the Bush tax cut, and punish small businesses. Hey, Lindsey: You can’t help someone save for retirement by raising their taxes.”
Graham, through his spokesman, fired back at the Club for Growth, vowing not to be intimidated by special interests. “In 1983, [President] Ronald Reagan and [Democrat House Speaker] Tip O’Neill came together in a great display of bipartanship [sic] to make changes to Social Security. They resisted special interest pressure politics in order to do what was best for the common good,” spokesman Kevin Bishop said in a statement. “Senator Graham knows the problems facing Social Security are serious and the sooner we address them, the better. If we want to ensure that Social Security remains strong, we need to come together to find workable solutions — not be held hostage by rigid ideology and special interest politics.”
Conservatives have been troubled that the White House has not rejected Graham’s plan outright. Bush has made ambiguous remarks regarding the payroll tax cap, suggesting he views it differently from the payroll tax rate, which stands at 12.4%. “The one thing I’m not open-minded about is raising the payroll tax rate. And all the other issues go on the table,” Bush told reporters from six regional U.S. newspapers February 15.
When asked by HUMAN EVENTS about the White House’s refusal to rule out lifting the payroll tax cap, Toomey redirected blame on congressional Republicans like Graham. “I think it’s very important that we send a message that we don’t want to see a bunch of Republicans coming on board and saying let’s just raise taxes as a way to deal with this, and put the administration in a position where they have to decide whether to take it or leave it, that’s the deal.”
The advertising blitz against Graham is part of the second phase of a $10-million campaign launched by the Club for Growth in February. Ads are also being shown in the home states of Senators Ben Nelson (D.-Neb.) and Kent Conrad (D.-N.D.). Both Democrats hail from states where Bush won overwhelmingly in November.
Earlier this year, the Club for Growth targeted Sen. Lincoln Chafee (R.-R.I.) and Representatives Sherwood Boehlert (R.-N.Y.) and Joe Schwarz (R.-Mich.). The three have made public comments suggesting their reluctance to support personal accounts.