Social Security Advocates Fear Payroll Tax Cut

President Barack Obama's plan to cut payroll taxes for a year would provide big savings for many workers but makes Social Security advocates nervous that it could jeopardize the retirement program's finances.

The plan is part of a package of tax cuts and extended unemployment benefits that Mr. Obama negotiated with Senate Republican leaders. It would cut workers' share of Social Security taxes by nearly one-third for 2011. Workers making $50,000 in wages would get a $1,000 tax cut; those making $100,000 would get a $2,000 tax cut.

The government would borrow about $112 billion to make Social Security whole.

Advocates and some lawmakers worry that relying on borrowed money to fund Social Security could eventually force it to compete with other federal programs for scarce dollars, leading to cuts.

Social Security taxes "ought to be held sacrosanct," said Rep. Earl Pomeroy, D-N.D., chairman of the House Ways and Means subcommittee on Social Security.

"When you start to signal that the (Social Security) tax levels are negotiable, you end up in long-term trouble, I think, in terms of making absolutely certain that the entitlement funding streams are secure," Pomeroy said.

Social Security is funded by a 6.2 percent payroll tax on the first $106,800 earned by a worker. The tax is matched by employers. The package negotiated by Obama would reduce the tax paid by workers to 4.2 percent for 2011. Employer rates would stay unchanged.

Obama administration officials say that a payroll tax cut is an efficient way to stimulate the economy by immediately increasing take home pay for about 155 million workers. The nonpartisan Congressional Budget Office agrees, and many business groups and Republicans support it.


For more info:
Social Security Administration
National Committee to Preserve Social Security and Medicare

[payasyougo]

"Social Security Advocates Fear Payroll Tax Cut"
----

It is a valid concern for these folks. Pyramid schemes only function if the new cash flow is maintained.

[rightbehind]

Social conditioning. As most know once a tax cut has been given it's almost impossible to restore it. Social security is just the right thing to do. Unfortunately republicans will probably kill it now that they have been rewarded this past election.

[Jaylah54]

It evidently wasn't enough to keep robbing the Social Security fund over the years until it hasn't been solvent in decades. Now we're just not going to bother to fund it at all.

[stn_sage]

This payroll tax cut, if it goes through, is just one more step designed to crash the economy! And when it comes, when the poor are storming the fences of gated communities, and getting rid of the wealthy who control the world and are responsible for causing nearly ALL of the problems, then, the government WILL have it's excuse to FORMALLY impose martial law, and we will become another KOSOVO revisited! I don't recommend this tax cut with a $112 billion deficit associated to Social Security!

[nearl451]

It does seem like a really stupid short sighted idea,if you care about SocSec solvency. Ifyouare just going about the business of privatizing, it helps push it off the slippery slope.

I can't figure out who proposed this one.

[ludvig1-2009]

Are our leaders insane? Both parties are made up of idiots. I'm going to vote for another party in 2012. I used to be a Republican, then I became a Democrat and I'll be a Socialist next election and probably a Communist when they cave in to all these rich people wanting the poor to grovel in the dirt.

[askagain]

Here is the flaw. Goverment has taken Social Security money for years to fund other programs. Had the money been left alone and invested at simple interest, there would be surpluses and we wouldn't have to worry about it running out. Don't thank current leaders for this. Thank leaders who have allowed this to happen over the last 50 years. Sooner or later, spending money you don't have cathes up to people.

[mylilelar]

Republicans=borrow and spend Democrats=tax and spend. We haven't got a dogs chance in hell

[forumcomments]

I would like to see the press report on what politician and their party wants to ruin the only solvent fund in the entire government, Social Security. The decision to lower the taxes here doesn't make sense unless there goal is to make it insolvent. I thought we were going to have CSPAN in filming all discussions like this.

[lastdance original]

Wili Leaks posted on 12-08-10 at : easynews.
Complete, unabridged and password free. 7.65 gigabytes.
Download from the group titled : alt.binaries.dvd