The Wonk Room

6 Villains Of The Economic Crisis»

Conservatives have been desperately trying to shift responsibility for the spiraling economic crisis away from its root cause: a bankrupt governing philosophy that shreds regulations and neglects vital supervision.

But there are a few individuals more responsible than most. A new site, How Did This Happen, a joint product of the Center for American Progress Action Fund and Media Matters Action Network, has identified six villains of the crisis.

Here are two:

Former Sen. Phil Gramm (R-TX)

Gramm is a former Republican senator from Texas who now serves a vice chairman of the UBS investment bank. He served as a senior economic advisor to Sen. John McCain (R-AZ) until October when he stepped down after calling America a “nation of whiners” experiencing a “mental recession.”
While still in the Senate, Gramm shielded derivatives from financial regulatory oversight, slipping a rule into an unrelated budget bill in 2000. The unregulated credit default swap market reached a peak of $62 trillion and contributed to the collapses of Bear Stearns Cos., Lehman Brothers Holding Inc., and the American International Group Inc. in recent months.

Alan Greenspan, Federal Reserve System

As chairman of the board of governors of the Federal Reserve System, Greenspan allowed the markets to run wild without proper supervision, a radical free-market ideology exemplified by a 2005 speech when he said “private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.” He resisted the farsighted recommendation of fellow Fed governor Ned Gramlich that the Fed act to prevent some abuses predatory and risky practices in subprime mortgages, such as mortgages issued without verifying the borrower’s income or ability to repay the mortgage once the introductory rate expired.

Greenspan also opposed a voluntary code of conduct for mortgage lenders. Greenspan also led efforts to exempt derivatives legislation from the oversight BY the Commodity Futures Trading Commission, despite the clear threat to the financial system posed by the near-collapse of the hedge fund Long Term Capital Management due partly to disastrous bets on derivatives.

He now regrets his deregulatory stance. Testifying before the House Government Oversight Committee on October 23rd he explained that he “made a mistake” and had “found a flaw” in his free market ideology.

Read about all six here.

Note To Sen. Sununu: Your Proposal Is Privatization And It Does Scare People»

Yesterday, during a debate with former Governor Jeanne Shaheen (D-NH), Sen. John Sununu (R-NH) “defended his plan for private Social Security accounts,” saying “the fact of the matter is the word privatization usually is used to scare people.” He added “I don’t believe it’s privatization if you give the youngest workers the option of saving some of their Social Security tax in an account.”

However, having workers place money into a private account - which is what Sununu proposes - absolutely amounts to privatization. And Sununu has repeatedly advocated for private Social Security accounts despite the recent fluctuations in the stock market, which would have wreaked havoc on such accounts.

In fact, earlier this month Sununu was asked if the issue of private accounts is “dead, given how scary the stock market has been?” He replied that “it shouldn’t be“:

Moderator: What do those troubles, Senator Sununu, do for the enthusiasm of an initiative that you’ve long championed, and that’s the partial voluntary privatization of social security. Is this issue now, dead, given how scary the stock market has been?

Sununu: It shouldn’t be. … And I think, allowing workers, the option of taking some of their social security taxes and putting them into an IRA or 401K plan, with oversight, with regulation, in the long term, is better for them.

However, it’s hard to argue that having money in a private account would be “better.” As an analysis by the Center on American Progress Action Fund shows, a retiree with a private Social Security account invested in stocks “would have lost approximately $26,000 if they had retired on October 1, 2008 after 35 years of contributions to such an account.”

“We should not be throwing our hard-earned Social Security benefits onto the roulette wheel of the stock market,” said John Mendolusky, president of the New Hampshire Alliance for Retired Americans. “Wall Street firms would collect the service fees and reap large windfall profits off these private accounts, while seniors in New Hampshire and across the country would take on huge risk in these already uncertain times.”

As if the effect on individual seniors wasn’t bad enough, the Center for Budget and Policy Priorities (CBPP) concluded that privatizing social security accounts would also increase the national debt “every year for at least the next 75 years.” The CBPP also noted that “increased deficits and debt would be avoided only if Congress made very deep cuts in other programs and/or if corporate income tax receipts boomed in an unprecedented manner that is extremely unlikely to occur.”

2008 Retiree Would Have Lost $26,000 In Bush/McCain Style Private Social Security Account»

The wild stock market fluctuations have wiped out $2 trillion in private retirement accounts in the last 15 months.

If John McCain and George W. Bush had had their way, millions of worker’s Social Security benefits would have been at risk.

To illustrate this risk, a new analysis from the Center for American Progress Action Fund finds that a retiree with a private Social Security account invested in stocks, along the lines of those proposed by President Bush and supported by John McCain in 2005, would have lost approximately $26,000 if they had retired on October 1, 2008 after 35 years of contributions to such an account.

Read the full analysis here.

But it could have been even worse. If the U.S. economy had undergone a decades long slump and performed like the Japanese economy over the past 35 years, the account would created a loss of almost $70,000.

In a rosier scenario, if the U.S. market had performed like the German market, a worker would have made almost $40,000 in their account. But this radical unpredictability is precisely the reason why draining trillions from Social Security to pay for these accounts is a very bad idea.

Check out a review of what the research from the 2005 Social Security privatization debate can tell us about John McCain’s plan to put retirement security on the stock market here.

To oppose the privatization of Social Security, sign the “Golden Pledge” here.

McCain’s Social Security Privatization: Bad Idea When Bush Proposed It, Bad Idea Now»

The events of the last two weeks have illustrated the volatility of America’s financial markets. Today, the Dow closed below where it was on George W. Bush’s first day in office.

And yet, John McCain still supports a Bush-style Social Security privatization plan that would encourage Americans to risk their retirement benefits on the stock market.

Social Security provides the majority of income for most seniors and is a vital insurance system for disabled workers and dependent spouses. Income provided by Social Security keeps 13 million seniors from living in poverty.

McCain’s proposal, which would allow workers to divert their social security payments into private accounts, is risky, expensive, a financial boon to Wall Street, and would undermine, not shore up, the long-term solvency of Social Security.

This is a debate that’s been had before. When Bush proposed a similar plan in 2005, analysts were able to assess its impact and debunk its myths. Here’s what they concluded:

Private accounts are risky: Bush and McCain tout the potential for higher returns as a reason to shift Social Security payments into the stock market. But an analysis by Robert Shiller of Yale University of a standard “lifetime” personal account, as envisioned by Bush and McCain, show they actually lose money one-third of the time. Furthermore, projections of rosy growth used to justify personal accounts stand in stark contrast to the projections of slower growth that indicate there may be an eventual shortfall in Social Security.

Private accounts are expensive: Bush’s 2005 plan, supported by John McCain, to divert Social Security payments to private accounts, would have unnecessarily added an additional $17.7 trillion to the national debt by 2050, according to an analysis by James Horney and Richard Kogan. This borrowing was needed entirely to fund the creation of private accounts, not to shore up Social Security solvency.

Private accounts provide a boon for Wall Street: Wall Street firms advocate Social Security privatization for a reason: they’ve got a lot to gain. A 1997 estimate by actuary David Langer for the Washington Post projected that Wall Street firms would make $240 billion in fees during the first 12 years of a privatization scheme– this number is undoubtedly much higher now.

Private accounts won’t fix Social Security: The CBO recently projected that Social Security will continue to pay full benefits for the next 30 years. After 2041, the system will pay out 78% of benefits. Private accounts wouldn’t address this shortfall, they would cause more damage by requiring benefit cuts and shortening Social Security’s long-term outlook.

What McCain won’t tell you: The cost of closing the long-term shortfall in Social Security is less than the cost of extending Bush’s tax breaks for the richest 1% of Americans, as John McCain has proposed.

But McCain seems less interested in saving Social Security than gambling it away.

Since McCain Proposed Social Security Privatization In 2000, Stock Market Has Swung Wildly, Dropped 8%»

While running for the Republican party’s nomination in 2000, John McCain supported a partial privatization of Social Security that would have encouraged workers to shift their Social Security contributions into the stock market.

Since then, the stock market has plunged, bubbled, and plunged again, with the Dow Jones Industrial Average closing 8% lower yesterday than it was on January 11th, 2000 when John McCain unveiled “a program to shore up Social Security through the establishment of individual investment accounts.”

This means the stocks in a private account would have seen their value drop over almost a decade, with their investment further eroded by the rate of inflation (a dollar invested in 1999 is worth only 78 cents in 2008 dollars, even if the stock market had stayed exactly flat).

Despite these wild fluctuations, John McCain has consistently supported privatizing social security, supporting the Bush plan in 2005, and telling the Wall Street Journal as recently as March of this year that he “backs a system of private retirement accounts that President Bush pushed unsuccessfully.”

On September 6th, McCain finally clarified his campaign’s stance on private accounts, confirming to the AARP Life@50 conference that he was, in fact, in favor of them. Since September 6th, the Dow has plunged over 5%.

The radical Bush-McCain plan to privatize social security is unnecessary, would shorten the programs life, and would put retirement security at the mercy of the “casino” on Wall Street.

Cavuto On Holtz-Eakin’s Budget Double Talk: ‘I’m Begging You To Stop’»

On Thursday during an interview on Fox News, Neal Cavuto took McCain Senior Economic Adviser Douglas Holtz-Eakin to task for dodging simple questions on McCain’s economic plan:

CAVUTO: We have a candidate who claims that his opponent, his Democratic opponent, is a tax-hiker. Yet, we have a candidate, in your guy, John McCain, who cannot account for his spending with the aggressive tax cuts he`s planning. Which goes? Which is real?

Watch it:

Cavuto is right. On issue after issue, McCain’s campaign is trying to have it both ways:

– McCain wants “everything on the table” to fix social security, but says any slight tax increases on the rich are “out of the question.”

– McCain’s health care plan is either a budget busting expenditure or a tax hike on the middle class, but his campaign insists it’s neither.

– McCain’s tax cuts for corporations and the wealthy would blow a hole in the deficit, but McCain promises to balance the budget by 2013.

As Douglas Holtz-Eakin went on the attack instead of explaining his candidate’s plan, Cavuto shouted “I’m begging you to stop.” We know how you feel, Neal.

McCain Doesn’t Want You To Retire»

Our guest blogger is Christian E. Weller, Associate Professor of Public Policy and Public Affairs at the University of Massachusetts Boston, and Senior Fellow at the Center for American Progress Action Fund.

Social Security’s anniversary – August 14 – is the perfect time to consider policies that could raise retirement security for tens of millions of Americans, who have seen their wealth decimated by crashing financial and housing markets. Cutting Social Security benefits – Sen. John McCain’s (R-AZ) favorite approach – would exacerbate what is already a crisis by reducing the last sure thing in retirement safety. Maybe his answer to the retirement crisis is to do as he does: work until you’re well into your 70s. Working becomes the new retirement with Sen. McCain.

Policymakers need to protect Social Security benefits, especially for vulnerable groups and create more wealth, especially for low-income and moderate-income families.

How do the presumptive presidential candidates address these goals? Sen. McCain’s mantra is “cut, cut, cut.” He sees a world of higher retirement age, smaller cost-of-living adjustments, and fewer benefits for moderate-income and higher-income earners, among other possible, yet unspecified cuts. And, it is not clear that he has abandoned the costly and ineffective idea of privatization that he championed in 2000 and that President Bush unsuccessfully peddled in 2005.

This is no way to get started on addressing the retirement crisis. Household wealth dropped by a whopping $3.0 trillion from the middle of 2007 to the first quarter of 2008, but who is counting? Apparently, a lot of people are. The Employee Benefits Research Institute reported in April 2008 that only 18 percent of workers were very confident that they will live comfortably in retirement – the primary reason for people to build wealth. This is the lowest level of retirement confidence since 1993.

Contrast this with Sen. Obama’s proposals. Sen. Obama has proposed to protect Social Security by opposing privatization and a higher retirement age, while also looking to increase revenues by expanding the cap, above which earnings are not subject to Social Security taxes, currently $102,000.

Moreover, Sen. Obama wants to make it easier for people to save. He would require that employers automatically enroll their employees in retirement savings plans and, if employers don’t offer such plans, they would have to offer employees an easy way to contribute to Individual Retirement Accounts (IRAs) through payroll deduction. On top of this, he would vastly improve the current system of public matches for people’s contributions to their retirement savings accounts, at least for families making less than $75,000. Sen. McCain has no such proposals.

The candidates need to tell voters how they will address their concerns. It is clear that wanting to cut Social Security amid rapidly dwindling wealth doesn’t accomplish that.

McCain Doesn’t Speak For McCain On Raising Payroll Tax»

After calling the “present” Social Security “setup” — in which “we are paying present-day retirees with the [payroll] taxes paid by young workers in America today” — “an absolute disgrace,” Sen. John McCain (R-AZ) reversed his pledge to not raise payroll taxes and suggested that he might preserve the “present setup” by increasing payroll taxes:

STEPHANOPOULOS: So, that means payroll tax increases are on the table, as well?

MCCAIN: There is nothing that’s off the table. I have my positions, and I’ll articulate them. But nothing’s off the table.

I don’t want tax increases. Of course I’d like to have young Americans have some of their money put into an account with their name on it. But that doesn’t mean that anything is off the table…

McCain’s reversal “drew a sharp rebuke Monday from conservatives” and has led the McCain campaign to backtrack from the senator’s promise that “everything is on the table.” During an appearance on the Fox News Channel today, Tucker Bounds, McCain’s national spokesperson, said that raising the payroll tax is “absolutely out of the question”:

KELLY: You’re off point. We’re talking on a go-forward basis. McCain gets in the White House, is he going to raise the payroll tax? Might the Social Security tax go up? Is that on the table?

BOUNDS: No Megyn there is no imaginable circumstance where John McCain would raise payroll taxes. It’s absolutely out of the question.

Watch a compilation:

- In 2005 on Meet the Press, McCain said, “As part of a compromise I could” support lifting on the cap on Social Security taxes to apply them to incomes above $90,000. [MSNBC, 2/20/2005]

- During an interview with the National Review, McCain promised to not raise payroll taxes under any circumstances. [National Review, 3/5/2007]

- In 2007 on Fox News Sunday, McCain denied his earlier comments and said, “I want to right now tell you I will not support a tax increase. I don’t see how it would be — it’s off the table, certainly, now.” [FNC, 4/30/2007]

- In 2007, McCain said, “I am against tax increases. I am against increases in taxes. I think there are ways to fix Social Security without that.” [SFSSS, 6/2007]

Lifting the current payroll tax cap (currently $102,000) “on the employer side to make businesses pay Social Security taxes on all of the income of the highest paid employers…is the fairest way to help shore up the finances of Social Security“:

According to the Social Security and Medicare Board of Trustees, the longrange, 75-year actuarial deficit is equal to 1.95 percent of taxable payroll. Eliminating the cap on both the employer and employee side would be more than enough to bring the system into long-range balance. Removing the cap on the employer side would thus go a long ways toward restoring solvency as well as help ensure greater progressivity and fairness in the payroll tax.

McCain Offers Top Social Security ‘Privatization’ Advocate As Surrogate»

Our guest blogger is Robert Gordon, Senior Fellow at the Center for American Progress Action Fund.

Today, the McCain campaign is putting forward economist Martin Feldstein as a surrogate.

Feldstein is widely acknowledged as the “chief intellectual force behind privatization” of Social Security. That’s Feldstein’s own term. He wrote “The Case for Privatization” and “Privatizing Social Security: The Ten Trillion Dollar Opportunity.”

McCain personally endorsed Bush’s privatization plans as recently as March, but yesterday, he said “there is nothing I would demand” in a Social Security package and even said that tax increases are not “off the table.”

“Social Security privatization may be another example of the McCain campaign’s private agenda — the agenda the campaign keeps to itself.

McCain, A Man Of Many Contradictions»

Our guest bloggers are Robert Gordon and James Kvaal, senior fellows at the Center for American Progress Action Fund.

Even while John McCain attacks Barack Obama for “changing positions,” he is pioneering the art of running on multiple contradictory positions – or so we argued yesterday over at the New Republic.

McCain says he’s for Social Security privatization, but his website says he isn’t. His website says he’s for repealing the Alternative Minimum Tax and sweeping corporate tax cuts, but his aides apparently told the Tax Policy Center he isn’t. His aides embrace a $3.6 trillion tax increase, except when it’s pointed out that middle-class households will pay more in taxes too. And so on.

Our timing was good: the McCain campaign continued the pattern yesterday. In a written statement, McCain criticized cuts to Medicare subsidies for insurance companies – subsidies his policy advisor said he opposed. And McCain aides reportedly told Larry Kudlow that McCain is backing away from climate change legislation – something other McCain aides denied.

Most likely, these contradictory positions reflect the contradictory political priorities faced by the McCain campaign: shoring up the base while reaching out to independents. As a result McCain is sometimes a supply-sider and sometimes a deficit-hawk. He wants to transform our health care system and Social Security at no cost to anybody. He wants to clamp down spending, just not any specific program with a constituency.

McCain: Social Security Is ‘An Absolute Disgrace’»

In a CNN interview yesterday and during a town hall event on Monday, Sen. John McCain (R-AZ) expressed outrage with the “present” social security “setup” which requires workers to pay for the benefits of retirees. During his town hall, McCain called the current system “a disgrace“:

Under the present setup, because we’ve mortgaged our children’s futures, you will not have Social Security benefits that present-day retirees have unless we fix it. And Americans have got to understand that. Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that’s a disgrace. It’s an absolute disgrace, and it’s gotta be fixed.

Watch It:

While McCain’s disgust with the current Social Security system is certain, his rhetoric about reforming the system has “evolved.”

Currently, McCain says he supports “supplementing the current Social Security System with personal accounts,” but in 2006, McCain voted for and strongly backed President Bush’s privatization plan, which would have shifted “Social Security’s annual surpluses into a reserve account that would be converted into risky private accounts.”

Similarly, McCain proposed diverting “a portion of Social Security payroll taxes to fund private accounts” during the 2000 campaign and suggested privatization as late as 2004 and 2008:

- I’m totally in favor of personal savings accounts…along the lines that President Bush proposed. [WSJ, 3/3/2008]

- Without privatization, I don’t see how you can possibly, over time, make sure that young Americans are able to receive Social Security benefits. [CSPAN, 11/18/2004]

McCain’s record of supporting Bush-like privatization schemes belies his current rhetoric. As MoJo Blog points out, “McCain is saying, again, that the problem with Social Security is that Social Security is Social Security, instead of something else.”

John McCain Flip-Flops Again On Social Security»

Today, John McCain flip-flopped for a second time on Social Security privatization. Maybe John McCain didn’t think anyone would notice the switch, since it came out during a hard hitting interview on Live with Regis and Kelly:

MCCAIN: What should be partisan about the fact that Social Security is going to go broke? I mean, should we be divided up among Republican and Democrat…

REGIS: Do you have a plan?

MCCAIN: Yes, sir. It’s gonna require, though, cooperation and participation by the other side. And I’ll reach my hand out…

REGIS: Is it privatization of the Social Security program?

MCCAIN: No, no it isn’t. But I would say that I support…I’d put everything on the table to start with…but second of all…young workers ought to be able to put part of their salary, part of their taxes into Social Security, into an account with their name on it. But that would not in any way effect older workers. But you’ve got to have a negotiation.

Watch it:

But just two months ago, McCain voiced a very different view on Social Security during an interview with the Wall Street Journal. When asked the specifics of his program, McCain adamantly claimed: “I’m totally in favor of personal savings accounts. … I campaigned in support of President Bush’s proposal and I campaigned with him, and I did town hall meetings with him.”

Noting the McCain’s website does not declare his support for private account, the Wall Street Journal reporter asked this follow-up question:

WSJ: Your Web site says something different [than your statement].

MCCAIN: I’ll correct any policy paper that I’ve put out that might intimate that personal savings accounts are not a very important factor.

So has John McCain rewritten his website to reflect his waffling viewpoint? No he hasn’t. Between now and two months ago Senator McCain has had two very different perspectives on Social Security, but nearly the identical, rhetorical fluff on his policy page. McCain seems to have decided it’s easier to change his Social Security policy than to change his website.

Will McCain Fund His Corporate Tax Cuts With Massive Cuts In Social Security?»

Now John McCain has made it very clear that he plans to balance the federal budget by the end of his second term.

Criticism has been broad, coming from Paul Krugman, the Wall Street Journal, the American Prospect and Robert Bixby, director of the non-partisan Concord Coalition.

To balance the budget, McCain would need to cut federal programs down to a level they haven’t seen since 1976–decreasing spending by programs like the Department of Education, Department of Agriculture and Department of Labor over 40% if you hold constant defense spending, which the senator has agreed not to cut. No president would propose and no Congress would pass such draconian cuts.

So how will McCain balance the budget? James Pethokoukis of U.S. News thinks he has the answer: massive cuts in Social Security benefits. The cuts Pethokoukis outlines would not only eliminate the Social Security shortfall but also generate $2.9 trillion to help pay for McCain’s tax cuts. He points to McCain aides’ suggestions that he might raise the retirement age and cut the growth in benefits over time.

Implementing those two solutions would actually result in more money going into Social Security than is needed to fund scheduled benefits. There would be money left over to help reduce taxes or increase spending on education or energy or whatever […] Now if you did a combination of price indexing starting in 2015 and extended the retirement age to 70 by 2050, that $5 trillion deficit turns into a $2.87 trillion surplus.

If Pethokoukis is right, McCain is attempting to do something that no president has ever done before: using payroll tax revenue to fund other functions of government. The result would be huge cuts in the program that lifts 13 million seniors out of poverty and a shift of the tax burden from progressive corporate taxes onto regressive wage taxes.

The gaping whole in McCain’s budget plans has left us all to speculate. But it cannot be a good sign for the McCain campaign when even McCain sympathizers think they detect a plan for massive cuts in arguably the most popular government program in history.

The Castor Oil Caucus: Ecrasez l’entitlements!»

Bipartisan worthies from the Brookings Institution, the Heritage Foundation, and elsewhere have identified a great threat to the nation’s future. “Without addressing” this problem, we are told, “our newly elected leaders in 2009 will have little chance to meet the challenges that Americans face in a world of intense global competition and rapidly changing technology.”

The health care crisis? The dropout crisis? Global warming?

Wrong, wrong, wrong.

The problem is “automatic spending growth and the deficits they engender.” More specifically, the problem is “projected increases in spending for Medicare, Medicaid, and Social Security.” To address this crisis, the authors propose an automatic mechanism that forces Congress to cut the benefits in these programs, to raise taxes, or to cut spending within 5 years.

Committed to “hard choices” and “responsibility,” the authors stand ready to slash benefits for the old, the poor, and the infirm. But is this really necessary? Brookings’ own Henry Aaron, a senior fellow in economic studies, disagrees:

A CONSENSUS HAS EMERGED AMONG BUDGET ANALYSTS that potentially ruinous deficits await the nation unless current policy is changed soon and fundamentally: The baby-boom generation is about to start retiring; the nation is committed to paying the elderly and disabled pension and health benefits—Social Security, Medicare, and Medicaid—that are unaffordable; and demography and budgetary overcommitment threaten fiscal meltdown. A political recipe to avoid this specter seems to follow: The nation must cut aid to the aged, disabled, and poor; reduce all other public spending; raise taxes; or do some combination of all three.

This view omits key information. As a result, the political recipe mentioned above is misguided. The United States must reform its health care financing system, public and private. If it does so, there will be no remaining long-term fiscal problem. Reducing current budget deficits is also desirable. But the long-term problem is health care spending, private and public, not a general budget shortfall or entitlements. […]

Thus, a three-premise syllogism emerges: (1) Near-universal coverage is an essential precondition for controlling health care spending. (2) Rising health care spending is the only source of long-term budget shortfalls. (3) Controlling spending under public-sector health care programs cannot proceed independently of control of private-sector health care spending. Therefore, extending health insurance coverage to nearly everyone is a necessary precondition for dealing with long-term budget challenges.

The authors make no proposals to extend health insurance to “nearly everyone” — or anyone. Their motto might be: Pain, no gain.

Saving Social Security From Bush And McCain»

Our guest blogger is James Kvaal, Domestic Policy Advisor at the Center for American Progress Action Fund.

If you’re in Generation X, don’t give up hope — Social Security is not going bust. That’s news from the annual report from the Social Security and Medicare trustees.

The latest projection is that Social Security will pay full benefits for more than 30 years. After 2041, it will pay only 78 percent of promised benefits. The projection for the long-run shortfall has fallen 10 percent since last year.

The report is an important reminder that the program is not in a crisis. While we need reforms to extend the life of Social Security, we do not need to panic and adopt massive benefit cuts. And the last thing we need is the radical step of privatization — as George Bush and John McCain want -– that would cut benefits and shorten the program’s life.

Instead, we can save Social Security by setting the right priorities. Its deficit projected into the infinite future is 1.1 percent of the economy — about the same size as John McCain’s tax plan. Saving Social Security would be a better use of resources than a $2 trillion tax plan that delivers 58 percent of its benefits to the top 1 percent of taxpayers.