Those are a heck of a lot of people between $97,000 and $200(,000) and $250,000. If you raise the payroll taxes, that's going to raise taxes on them.
MR. GIBSON: Very quickly, because I owe Senator Clinton time, but, yeah, you wanted to respond.
SENATOR OBAMA: Well, Charlie, I just have to respond real quickly to Senator Clinton's last comment. What I have proposed is that we raise the cap on the payroll tax, because right now millionaires and billionaires don't have to pay beyond $97,000 a year.
That's where it's kept. Now most firefighters, most teachers, you know, they're not making over $100,000 a year. In fact, only 6 percent of the population does. And I've also said that I'd be willing to look at exempting people who are making slightly above that.
But understand the alternative is that because we're going to have fewer workers to more retirees, if we don't do anything on Social Security, then those benefits will effectively be cut, because we'll be running out of money.
MR. GIBSON: But Senator, that's a tax. That's a tax on people under $250,000.
SENATOR OBAMA: Well, no, look, let me -- let me finish my point here, Charlie. Senator Clinton just said she certainly wouldn't do this; this was a bad idea. In Iowa she, when she was outside of camera range, said to an individual there she'd certainly consider the idea. And then that was recorded, and she apparently wasn't aware that it was being recorded.
So this is an option that I would strongly consider, because the alternatives, like raising the retirement age, or cutting benefits, or raising the payroll tax on everybody, including people who make less than $97,000 a year --
MR. GIBSON: But there's a heck of a lot of --
SENATOR OBAMA: -- those are not good policy options.
MR. GIBSON: Those are a heck of a lot of people between $97,000 and $200(,000) and $250,000. If you raise the payroll taxes, that's going to raise taxes on them.
SENATOR OBAMA: And that's -- and that's -- and that's why I've said, Charlie, that I would look at potentially exempting those who are in between.
But the point is, we're going to have to capture some revenue in order to stabilize the Social Security system. You can't -- you can't get something for nothing. And if we care about Social Security, which I do, and if we are firm in our commitment to make sure that it's going to be there for the next generation, and not just for our generation, then we have an obligation to figure out how to stabilize the system.
And I think we should be honest in presenting our ideas in terms of how we're going to do that and not just say that we're going to form a commission and try to solve the problem some other way.
SENATOR CLINTON: Well, in fact, I am totally committed to making sure Social Security is solvent. If we had stayed on the path we were on at the end of my husband's administration, we sure would be in a lot better position because we had a plan to extend the life of the Social Security Trust Fund and again, President Bush decided that that wasn't a priority, that the war in Iraq and tax cuts for the wealthiest of Americans were his priorities, neither of which he's ever paid for. I think it's the first time we've ever been taken to war and had a president who wouldn't pay for it.
But when it comes to Social Security, fiscal responsibility is the first and most important step. You've got to begin to reign in the budget, pay as you go, to try to replenish our Social Security Trust Fund.
And with all due respect, the last time we had a crisis in Social Security was 1983. President Reagan and Speaker Tip O'Neill came up with a commission. That was the best and smartest way, because you've got to get Republicans and Democrats together.
That's what I will do. And I will say, number one, don't cut benefits on current beneficiaries; they're already having a hard enough time. And number two, do not impose additional tax burdens on middle-class families.
There are lots of ways we can fix Social Security that don't impose those burdens, and I will do that.
SENATOR OBAMA: That commission raised the retirement age, Charlie, and also raised the payroll tax. And so Senator Clinton, if she -- she can't have it both ways. You can't come at me for proposing a solution that will save Social Security without burdening middle- income Americans, and then suggest that somehow she's got a magic solution.
SENATOR CLINTON: But there are more progressive ways of doing it than, you know, lifting the cap. And I think we'll work it out. I have every confidence we're going to work it out. I know that we can make this happen.