|I'D SAY THIS HAS some risk of turning out really badly,
and some possibility of being moderately positive.
On balance I'd rather do without it, but it's somewhere
short of 'craziest, unbelievable mistake.'
On the starvation point, the Trust Fund gets credited,
so the date of Fund balance exhaustion is unchanged.
What matters is the perception, but that cuts two ways.
On the negative, it weakens the contributory nature of
the program and plays to the "IOU" story.
On the plus side, we need general revenue for the program
before the Fund 'runs out' (subsists solely on current tax
income). I've always thought that when the fund goes
dry, we should just use general revenue to fill the hole.
It's a more progressive revenue source than the payroll
tax. So this change opens the door to full general
revenue supplementation of the program's dedicated
revenues. We do this now with Medicare, so it's
not necessarily the end of the world.