Demagogue

President Bush may be on the verge of effectively co-opting an idea that could help extend the solvency of Social Security. It's an approach that I have promoted on this blog, as have others -- raising or lifting the cap on SS payroll taxpayers.

Bush was speaking Wednesday in New Hampshire when reporters asked him about his view toward raising the cap:

President Bush says he has not ruled out raising taxes on those who earn more than $90,000 a year to help bolster Social Security's finances.

Under the current system, payroll taxes are paid only on the first $90,000 in wages. Bush has repeatedly said that he opposes raising taxes, but his advisers have been intentionally vague about whether he would also rule out subjecting a greater share of pay to the existing tax.

Asked directly, Bush said that he would not rule out raising that cap, though he does not want to see the payroll tax rate go up.

My worry? Bush's advisors conclude that his original reform outline is going nowhere so they amend his outline to include raising the cap. Raising the payroll tax cap could raise significant amounts of revenue, allowing Bush to minimize concerns about the conversion costs of private accounts.

The Democrats' failure to offer any alternative to extend the life of SS may hand Bush an opportunity to salvage a political victory on this issue.