Rudy: No Tax Hike for Social Security
Republican presidential hopeful Fred Thompson suggested raising out-of-pocket costs for higher-income Medicare beneficiaries, and rival Rudy Giuliani ruled out a Social Security tax increase Wednesday in auditions for support from influential economic conservatives.
"I'm not going to support a tax increase for Social Security," added Mitt Romney, a third contender. The former Massachusetts governor said he saw some merit in raising the retirement age and in scaling back the benefits promised future retirees as part of a rescue plan for the government-run retirement program.
In separate appearances before the Club for Growth -- Giuliani and Thompson in person, Romney via satellite hookup -- the three called on Congress to cut the corporate tax rate. They also supported renewal of the tax cuts that have been passed since President Bush took office and are due to expire over the next several years.
"When you go back to the '20s, to the Kennedy administration, or the Reagan administration or this administration, you can always see that lower tax rates generates ... economic growth and generates prosperity for our country for our people," said Thompson.
With the first voting in White House campaign less than 100 days distant, Giuliani leads in the national polls for the Republican nomination, Romney runs strongly in surveys in the early-voting states and Thompson is a newcomer attempting to emerge as a true conservative.
The former Tennessee senator did not provide specifics of any plans to restrain the growth of Medicare, instead raising the issue by saying, "Can we stick with the same premiums and deductions for higher income recipients on Medicare?"
"All of these will be part of the discussion" when it comes time to overhaul the federal government's largest benefit programs, Medicare and Social Security, he said.
It was the second time in recent days that he has broached a potentially controversial subject.
Earlier, he said he supported changing Social Security so that future retirees receive smaller benefits than they have been promised.
Thompson and Giuliani both said they would appoint a bipartisan commission to recommend changes to Social Security. As did Romney, they also said they support private retirement accounts -- the element that caused Bush's ambitious overhaul plan to collapse in Congress in 2005.
The former New York mayor also said, "I would rule out a tax increase" to help shore up financing of the federal retirement program.
That was a modest shift from remarks in an Associated Press interview last month in which he said he opposed a tax increase yet would look at whatever proposals a commission presented him.
The earlier statement led to an exchange of letters between the campaign and the anti-tax group Club for Growth, whose political action committee has intervened forcefully in recent Republican primary elections on behalf of economic conservatives.
Giuliani's campaign sought to reassure the group that the former mayor opposed tax increases.
"In addition to opposing Social Security taxes, we hope Mayor Giuliani will go one very important step further and offer a detailed free-market proposal for reforming Social Security that includes personal savings accounts and returns choice and freedom to individual taxpayers," Pat Toomey, the club's president, responded by letter.
While Giuliani's campaign denied there was a change in position, the organization pointedly disagreed.
"While Giuliani has frequently stated his general opposition to taxes, he has never declared his opposition to raising Social Security taxes as unabashedly as he did today," the organization said in a written statement.
Giuliani did a mea culpa of sorts on a different issue, saying he had erred in originally supporting legislation that placed limits on campaign donations and political advertising.
"That turns out to be a big mistake," he said of the law that the Club For Growth has opposed.
While all three men courted favor from the conservative group, Thompson and Romney each differed with their hosts on different points.
The former Tennessee senator, an attorney, said he opposed federal legislation to limit the damages individuals can receive in lawsuits, saying the issue should be left to the states. Many conservatives favor such legislation.
On another issue, Romney said, "It makes more sense to adjust the minimum wage from time to time," in part so business can plan and in part to prevent Democrats from reaping political advantage from the issue.
He made his remarks after Toomey reminded him that some in the audience oppose the existence of a federal minimum wage.
Medicare and Social Security are the federal government's two biggest benefit programs, and both face daunting financial difficulties as the post-World War II baby boom generation reaches retirement age.
While Social Security is funded by a payroll tax, Medicare is financed by a blend of payroll taxes, general tax revenue and out-of-pocket payments such as premiums and deductibles.
According to the Medicare Web site, most beneficiaries will pay a monthly premium of $96.40 for out-of-hospital coverage in 2008, but the cost will be higher for individuals making more than $82,000 or couples earning more than $164,000.
