federal budget, and delayed critical rate increases for nearly a decade. Moreover, Carter’s
Democrats held a majority in both houses of Congress. However, the structure of U.S. political
institutions, especially the dispersion of legislative authority, left the president with only modest
ability to shape the reform outcome. Congressional committees, often ruled with an iron fist by
their chairmen, exercised an effective veto over most legislation. Further, weak party discipline
combined with deep regional fissures within the Democratic gave Carter few tools with which to
command loyalty among his nominal co-partisans in the legislature. Unlike Westminster’s
concentration of authority, U.S. institutions strongly advantaged those who stood to lose from the
chief executive’s legislative plans.
If the plan drew predictably strong support from organized labor,
protest from organized business. Business groups objected, in part, to the plan’s proposed one-
sided increase in the employer’s portion of the payroll tax. Yet, for more subtle reason, they also
opposed introducing any element of general-revenue financing into the program. Their concern
was less with the immediate distributive effects of such a mechanism than with its longer-term
implications for the politics of the welfare state. Business leaders viewed payroll tax financing of
Social Security as a crucial constraint on the growth of this popular social program: every time
Congress wanted to raise benefits, it also had to raise taxes on workers. Employers were worried
that a break with the self-supporting principle would open the doors to easy finance, generating a
dangerous political dynamic of expansion. As a spokesperson for the National Association of
Manufacturers (NAM) put it, “To draw money from general revenues and impose Social Security
taxes on the entire payroll [as suggested in the Carter plan] constitutes a rather dangerous
tinkering with the historic characteristics of the program.”
even more explicit terms:
50
James W. Singer, "Carter Is Trying to Make Social Security More Secure," National Journal, June 11, 1977.
51
Michael C. Jensen, "Carter Payroll Tax Plan Is Opposed by Business," New York Times, May 11, 1977,
D1.
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Convention