By Josh Richman
FREMONT — Rep. Mike Honda says it’s time to “scrap the cap” on Social Security payroll taxes and expand benefits for current and future recipients, while his Democratic challenger wants to raise the cap only as much as necessary to keep benefits as they are.
Honda, D-San Jose, held a news conference Wednesday outside the Social Security Administration office at Mowry Avenue and Paseo Padre Parkway to tout a bill he’s about to co-author that would phase out the payroll tax cap while changing the formula used to calculate benefits in a way that would boost payouts by about $800 per year.
This is about “renewing and refreshing and expanding” the promise that President Franklin Delano Roosevelt made with the Social Security Act of 1935, he said, noting that Americans now pay Social Security taxes only on the first $113,700 of their income.
“I have yet to hear a good explanation of why that cap should exist,” Honda said. And getting rid of it will extend the program’s solvency for decades to come, he said, while giving more aid to seniors whose savings were devastated by the Great Recession and health-care costs.
Wednesday’s event was perhaps Honda’s most visible effort so far to draw a contrast between himself and fellow Democrat Ro Khanna, a former Obama administration official from Fremont who’s challenging him in the 17th Congressional District next year. Even with 10 months to go before next June’s primary vote, the race between two Asian-Americans in the continental United States’ first majority-Asian-American district has drawn national attention as Khanna has raised tremendous sums of money while Honda has raked in endorsements from prominent Democrats, including President Barack Obama.
Khanna issued a statement Wednesday saying that his parents are among the millions who worked hard, paid into Social Security and as retirees rely on benefits that “must remain sacrosanct.”
“Congress should increase the payroll tax cap from its current level of $113,700, asking the wealthiest among us to pay their fair share,” Khanna said. “This would add many years to the solvency of the (Social Security) Trust Fund without cutting benefits or increasing the retirement age, which I strongly oppose.”
Asked whether Khanna supports expanding benefits as Honda does, campaign spokesman Tyler Law said Khanna “is not willing to say we’re going to change the program in a way that we believe threatens the long-term solvency.”
Khanna called a reporter Wednesday night to clarify that “philosophically, I’m for eliminating the cap,” but he believes it’s more politically feasible for now to simply raise it and put all of that money into ensuring solvency at current benefit levels. He said he’s “in principle open to expanding benefits after the solvency is ensured.”
But Honda said that even with increased benefits, abolishing the tax cap would extend solvency through 2055. Honda suggested Khanna “should do the calculations before stepping out on something like this.”
This isn’t Honda’s first call to scrap the cap: He said last year that he had helped write it into the Congressional Progressive Caucus’ “Budget for All.” He also said last year that he would be open to raising the retirement age in proportion to rising life expectancies, but he backed away from that Wednesday.
“I don’t think we need to do that right now,” he said.
By calling for expanded benefits, Honda is taking a more liberal stance than Khanna, but the congressman insists it’s in sync with his district.
Tom Rankin of the California Alliance for Retired Americans said at Honda’s news conference that a recent poll of the district’s likely voters found roughly three-to-one support for increasing benefits and removing the payroll tax cap, and even stronger opposition to reducing benefits by using the “chained consumer price index” to calculate cost-of-living adjustments, as Obama has proposed. Honda and Khanna both oppose using the chained CPI.
Honda favors switching to the experimental price index for the elderly — called the CPI-E — to boost cost-of-living adjustments.
Josh Richman covers politics. Contact him at 510-208-6428. Follow him at Twitter.com/josh_richman<http://Twitter.com/josh_richman>. Read the Political Blotter at IBAbuzz.com/politics<http://IBAbuzz.com/politics>.