Cutting the payroll tax by 2.0% will set the stage for future cuts in

[WCGreen]

Social Security Benifits...

Payroll tax is, in case some don't know, the way your social security and medicare accounts are funded.

Just something to ponder.

A cut on either side, employer or employee, is essentially less money going into you account.

Just mentioning this to make it clear that by specifically calling it a payroll tax instead of FICA or Medicare, they may be setting up another the system is going broke so we have to cut benefits.

[elehhhhna]

1. restoring it would be a TAXINCREASE!!1!!! and won't happen.

we're screwn.

[laughingliberal]

24. I already heard a Republican say that: "Good luck rescinding that. Now, they'll have to cut SS."

Of course, they saw it as a good thing.

[frazzled]

2. It's a one-year deal (to replace the Making Work Pay tax stimulus)

It's also only a 2% cut, which will expire after 12 months.

Your argument doesn't really hold. Its effect will be stimulative (if only mildly so) ... which will do a lot more to protect Social Security than having the economy go in the crapper again.

[WCGreen]

3. My argument certainly holds since it is a reduction in the amount

going into your account.

Mildly is the key word.

[frazzled]

8. First of all, nothing goes into "your" account

You have no "account." That's not how SS works. Everybody's money goes into the trust fund to pay for current retirees, and when you retire you are paid out of the general trust fund according to your employment history over time. The formulation for your benefits under current law will not change.

The money lost will be paid back into the Trust Fund after the year's holiday ends (through borrowing). So it will not affect benefits or long-term solvency. The Republicans refused to extend the Making Work Pay credit. The economy is still teetering and needs a stimulative boost, which the Republicans won't vote for. This was actually better than people thought we would get. Though it won't be all that stimulative. I guess it's better than nothing. And it's moderately progressive in that it cuts off after $106K.

[nadinbrzezinski]

10. I have some swamp land in Florida for sale

Phyrric Victory this is what this is

http://en.wikipedia.org/wiki/Pyrrhic_victory

[WCGreen]

14. Bullshit....

Everyone gets a statement every two or three years and spells out exactly what you have contributed.

Don't mess with me on this, I do taxes and have seen hundreds of these statements which determine the amount of your benefits...

[Statistical]

19. But you have no account. A quote from the "statement".

"* Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change"

You have no account.
You have no guaranteed benefit.
Benefits amount are solely at the discretion of congress. Benefits could be raised 50%, or cut 50%, or the formula made more progressive or made less progressive. Congress could pass law tomorrow returning all the funds collected or simply ending social security with no payout to anyone.

With a life insurance policy or an annuity you have a contract as such have certain rights. With SS you have absolutely nothing except a vague promise to pay something in the future* (see officially disclaimer above).

[WCGreen]

22. Then why do they bother keeping track of the contribution?

It does determines the amount you will get because the base is what determines no matter what congress decides.

In your scenario it is 50% increase or decrease based on your contribution.

Look, the bottom line is president Obama should have called it social security instead of payroll tax.

I'm sorry, I am just way to suspicious of the motives of the cat food commission and what is going on rhetorically to let this pass without at least pointing it out.

[Statistical]

27. You should be suspicious. No issue with that.

Just pointing out you have no SS account. You have no guarantee to that benefit, and it isn't your money.

It is taxes collected by the United States government to be dispensed at the sole discretion of the US government.

If Congress wanted to take the SS funds to build a private island retreat for retired Congressmen that is their prerogative.

In short: You have no social security account. It has no cash value. You aren't guaranteed any level of benefit. You aren't even guarnateed they will give you your money back. Congress could end SS tomorrow and never pay you a single penny. I don't think that is likely but if they did you would have absolutely no resource. Why? Because despite that intentionally misleading statement you have no Social Security account. It isn't your money.

[Mass]

5. Why do you think the GOP leadership agreed to that rather than extending Making Work Pay tax?

Exactly for the reason stated in the OP.

[laughingliberal]

26. That reason and it doesn't restore the money for the "Making Work Pay," program. Those people...

won't be getting those jobs back.

[high density]

32. In a year it will be a "tax increase"

That is a given.

[RUMMYisFROSTED]

34. Chimp's tax cuts were set to expire, too.

:think:

[CaliforniaPeggy]

4. Thanks for the information on this...

Damn, there's so much I don't know...

Good thing we have folks like you to help keep us informed.

I guess there's nothing they won't cut, is there?

Damn.

[laconicsax]

7. They won't cut military spending.

Or the budget for TSA Porno-Scanners.

[Skittles]

6. NO SHIT

[laconicsax]

9. It'd be neat if this were a precursor to eliminating the cap.

5.65% with no income cap wouldn't be all that bad.

[TheWraith]

13. Actually, that would be an order of magnitude better than what we have now.

Capped payroll taxes are significantly regressive: someone making $30k a year is going to pay a much larger chunk of their income than someone making $300k a year.

[nadinbrzezinski]

11. Bingo, they laid the trap

and "our side" walked into it.

Of course at this point I am no longer assuming they are on our side.

[TheWraith]

12. Your statement is completely nonsensical.

A temporary one year reduction of two percent in the payroll tax has about as much real effect on Social Security and Medicare as someone with a firehose would have on the volume of water flowing through the Colorado River. You're talking about losing a tiny piece of one year's expenditures, decades down the line, an amount which is dwarfed by an order of magnitude by the variance in revenue caused by people being out of work.

[WCGreen]

15. Your contribution for this year will be down about 29%...

They are dropping the FICA rate from 6.2% to 4.2%

[TheWraith]

35. Being unemployed, I'm not exactly making a big contribution to the retirement fund. nt

[Caretha]

33. That word "Temporary"

gets thrown around alot...just like when the Senate passed the "Bush Temporary Tax cuts" 51 to 50 with Cheney throwing the tie breaker vote. How well did that work out for ya?

[soryang]

16. It's all part of the plan to wreck "entitlements"

I heard a petepeterson paid pundit on tv say, "gee FICA is such a burden on employers, it keeps them from hiring."

Yeah, so are wages. So are we going back to slavery? This is ultimately what Nazi Germany and Stalinist Russia went to. Soon, we'll all be on a caloric dole. Workers get four ounces of lard a week, a half loaf of bread a day ration and a quarter pound of pigs knuckles. The rest of the food is saved for export to get currency reserves to finance the war industry. Useless eaters, well maybe a bowl of gruel. Just work em till they die. Collect the dead homeless and aged off the roads each day and burn them.

[Turbineguy]

17. My Republican Mother.

She gets a pension from Europe which doubled during the Bush Admin because he cut the US's value in half. She says:

"The 2% reduction is payroll taxes is something for the working people!"

Me: "Yeah, it goes nicely with the 4% for the rich!"

crickets on the phone.

[Statistical]

18. The sad part is you think you have a social security account.

You benefits (or lack there of) is based solely at the whim of Congress. It can be changed at any time in any amount for any reason. You have no contract or guarantee to any level of benefit.

The idea that you should be worried because less money is going into "your account" is beyond silly.

Take the 2% buy a savings bond and hold it till you retire. It will be worth far more than any money paid into your imaginary account.

[WCGreen]

20. You do have an account..

I do taxes, have been for 25 years. I have seen hundreds of the account statements that everyone gets every two years that details the amount you have contributed into your FICA account. This is how your SS check is determined.

[Statistical]

21. You have no account. It shows the amount you contributed.

The money isn't in your account.

The statement clearly indicates that any benefit is an ESTIMATE based on current legislation.

Any SS you receive is based on the whims of Congress. You have no right to the money, it isn't your money, and no recourse is the benefit is reduced or eliminated.

If you are lucky you will get something close to the "estimated" amount on your "statement" but that is a far cry from an account in your name.

I have a Roth IRA in my name. It is my money. It has tangible value and it belongs to me and only me. You have no SS account. I am sorry if that is scary but it is the reality.

The SS benefit isn't an account. You have no right, access, or control to the money. You are guaranteed nothing. If an annuity stops making payments you can sue the company (hopefully they are solvent). Same thing applies to pension, life insurance policy, structured settlement, or lottery winning. As a contract holder you have certain rights, rights which can be enforced in court. If Congress decides to reduce or stop payments you have absolutely NO legal resource. None what so ever.

Congress has changed SS a total of 7 times since its inception and every change was to the detriment of so called "account holders" the idea they won't do it another half dozen times in next 30 years is naive at best.

[WCGreen]

25. They keep track of your contribution which does determine your payout...

You have an account number which is your social security number.

If congress tinkers with the amount, the amount you put in will be the starting point to determine your benefit.

[Statistical]

29. There is no guarantee of benefit.

Congress could simply decide you are too "rich" to get a benefit. Blam you benefit is now $0.00 regardless of what you contribute.

They could also in the future simply make it is a flat benefit for destitute seniors. The benefit paid would have no relationship to contribution.

Using the term "Account" is misleading.

I have a bank account. The funds in it are mine.
I have a stock account. The funds in it are mine.
I have a IRA (individual retirement account). The funds in it are mine.
I have a life insurance policy. The benefit will be paid to my beneficiary.

You have no protection, guarantee, or expectation of any level of benefit when it comes to Social Security. What you get is based merely on the whim of Congress. The younger one is the more volatile one can expect the ultimate payout to be.

As indicated on my SS "statement"

"* Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefits amounts may change because, by 2037, the payroll taxes collected will be enough to pay only about 76% of the estimated benefits"

God I wish we had SS accounts and that the value in them was personal property (like bank account or life insurance policy) but it isn't.

[WCGreen]

31. I know that...

But they will determine your benefit based on the contribution no matter what over arching changes congress may pass...

I agree it isn't an account where you can withdrawl or add, but it is an account in the sense that it keeps track of how much you and your employer have contributed.

[MiniMe]

23. Has anybody heard where they are cutting it?

Half is paid by individuals and half is paid by the company. Is this another way to give tax cuts to big corporations?

[laughingliberal]

28. Cutting 2% off the employees' contribution. nt

[Statistical]

30. Be happy for small victories. The 2% is only from employee side.

Surprised Obama didn't roll over on that one too. No doubt the Republicans would have wanted it all on the employer side (maybe 4%, 5%, or 6%).