Time is of the Essence: The Future of Social Security Cannot be Ignored

[jtown1123]

For everyone here who is concerned about Social Security and the constant attacks to undermine it (Bush privatization, Catfood Commission, etc.) please hear me out.

There is a lot to dislike in Obama's Tax Cut Compromise. But, a very serious threat to Social Security is sneakily tucked into this proposal in the form of a payroll tax holiday, which is a treasured Republican plan to temporarily decrease Social Security FICA taxes and drain resources from SS general revenue. Let's be clear, although there are vague references to a plan to cover this shortfall from "other places" this is highly suspect. The great thing about Social Security is that it is self-funded and does not have to rely on competing for funding from the general federal revenue.

And, as we see today, making a tax cut temporary is politically impossible. When this is about to expire, Republicans will scream and holler that Obama is raising taxes on the middle class, and he will likely extend them, as he is up for reelection. This will further undermine Social Security's finances (starve the beast strategy) so it will be ripe for cuts when the deficit grows even larger.

Time Goes By Blogger has urged all Social Security advocates to visit NCPSSM's Legislative Action Center, where they have set up a new letter urging our Reps to vote against this proposal in the compromise:

"The National Committee to Preserve Social Security and Medicare (NCPSSM) tells me that time is of the essence on this proposal as Congressional members try to get out of Washington for the holidays. In an email, the NCPSSM said,

'Flooding members' offices is what is absolutely needed...House members have been far more vocal in their opposition to this deal than we’ve seen in the Senate but it’s vital that seniors and their families contact their representatives in both.

'Far too many in Washington don’t understand the fundamental threat of what’s being proposed and they need to hear from seniors.”
At their website, the NCPSSM has set up Payroll Tax Letter to legislators that is similar to what you can do at congress.org. Here are instructions:

1.Follow this link (http://capwiz.com/ncpssm2/home/)
2.Under “Elected Officials,” enter your Zip Code and press Go
3.At the top of the next page, select “Issues”
4.At the top of the page, select “Tax Holiday is no holiday at all”
Separate letters to the House and to the Senate will appear. Feel free to personalize them. Fill in the required information, press “send message” and you're done.

PLEASE DO THIS in addition to calling and emailing individual lawmakers. And please don't put it off for later. Time is short and the future of Social Security is at stake."

http://www.timegoesby.net/

[BrklynLiberal]

1. This "Tax Holiday" is the repukes' wet dream come true.

This will ENSURE that they will me screaming about the unsustainablity of SS every day between Jan 1, 2011 and November of 2012..

[Skink]

2. It would be ironic if the republicans said no to this tax deal.

I've never understood why dems push this tax idea. The msm media actually touts dems when they do this which says it all.

[jtown1123]

3. Wouldn't that be great?

[Faryn Balyncd]

4. K & R

[happyslug]

5. A "Tax Holiday" for Social Security has been kicked around for at least 10 years

It comes up in every recession, for the simple reason if that people who are making less then Median income pay more in Social Security Taxes then Income taxes. Since people below Median Income (About $42,000 a year for a single person) tend also to spend all of their income, a tax holiday on Social Security Taxes will do more economic good for the over all economy then any Income Tax cut.

Progressives economists and others have advocated this in every major recession, it appears to do the most to give the economy a kick. The reason for this is the economy is based NOT on how much money people have BUT the number of transactions that occur in the economy. The more transactions the healthier the economy, the less transaction the worse the economy is. People with money, when they get a tax cut tends to save the money, thus minimizing the affect it has on the economy, on the other hand, the lower half of the economic divide, tends to spend all of their money, but in and on various different items. Thus the people making less then median income when given extra money via pay raises or tax cuts, maximize the number of transactions with that extra money, giving the economy the maximum kick.

Now, there may be a plan to use a Social Security tax holiday as a way to kill Social Security, but the devil is in the details of any such proposal NOT the idea itself. One way to give a "Social Security Tax Holiday" with the minimal affect on Social Security itself, is to make Social Security Taxes deductible from Income Taxes (not from income but the actual tax to be paid, a "Tax Credit" as opposed to a "Income Deduction"). If such a credit is permitted AND not used to pay off Student loans, then it will do a lot of good for the Economy. You are in affect moving taxes from Income taxes to the Social Security Trust funds, thus preserving the trust fund.

Please note, all the good such a "Social Security Tax Holiday" will do, can be undone if Students loans in default can still take the Credit, then it will do little good (More people own more on Students loans today then on Credit Cards, this was first reported in November and it is the first time it has been the case since both became common in the 1960s). Attachments of Income Taxes to pay Child Support is NOT a problem, for whoever gets the Child Support will be spending almost the same as the person whose Income Tax Refund was attached (i.e. instead of the person whose income Tax refund using it to pay rent, food, clothes etc, the person who gets the refund will be using the money for the same purpose).

A better way to get money to people who will spend it would be to increase Welfare and Food Stamps payments, but no one is proposing that, even through it would do the most good for the economy as the least cost.

Just pointing out that a Social Security Tax Holiday will go a lot of good for the Economy, and may be the only way to give the economy a kick given that we need to get the lower half of Society to start to spend money (and there is no push to increase Welfare or Food Stamp payments). Any such Social Security Tax Holiday has to be tied in with some sort of Student Loan Forgiveness AND payment into the Social Security fund.

Please note, the proposals I read of years ago, all kept the Employer co-payment. Today, the Employee pays 7% of his or her Income as Social Security Tax, and that person's employer also pays 7% of the employees income as an employment tax. Self employed people pay a 13% rate as an equivalent to cover both taxes.

Just a comment that this may be a Liberal proposal to give the economy a boost at the least cost in terms of Politics and actual money. Some Conservatives may be endorsing it as a way to destroy Social Security, but the key will be in the details.

One last comment, while a Social Security Tax Holiday would be good for the Economy, I have my questions if Obama and the Democrats in Congress are ready to fight to keep the Holiday limited to economic health. Remember the Stimulus program, Obama gave in quickly to the idea of Tax Cuts, even when it was clear such tax cuts would do more harm to the Economy then the Stimulus program would do good. I can see the Democrats making the Holiday to include the Employer's share, which would kill whatever good the program would do. I can see the Democrats agreeing to some sort of Income tax cut to appease the GOP. Thus the devil will be in the details and I am NOT optimistic about those details.

[jtown1123]

7. Thanks for your thoughtful response. You might be interested in this

article from the Center on Budget and Policy Priorities: http://www.cbpp.org/cms/index.cfm?fa=view&id=2264, which explains how a Making Work Pay Tax Cut has much better stimulus effect and would not harm Social Security's finances.

I agree we should have studen loan forgiveness. Student loans are crippling my generation's ability to ever spend, buy a home, etc. Plus, there are no jobs for college grads and even less for people with only high school diplomas or less.

The payroll tax cut wouldn't be such a scary idea if we knew for sure we could count on it expiring. With Republicans in the house, I am not so optimistic. Plus, this will be pinned on Obama as a tax increase on middle and lower income Americans.

[Autumn]

6. Called Bennet's office this morning, went through

everything I have read on this. He supports a one year extension and is inclined to vote for it. They. Don't. Care. K/R

[jtown1123]

8. Uggh. Thanks for trying. This is so disheartening.

[Autumn]

9. No it felt good. Told him I will not be

inclined to vote for him again. Or any Democrat currently in office.

[jtown1123]

10. Good. They need to hear that we will hold them accountable.