Some see danger in changing Social Security’s funding
Obama pitches idea of lowering payroll tax rate to 3.1 percent but there's bipartisan skepticism
By Tom Curry
National affairs writer, MSNBC
October 18, 2011
Another Social Security tax cut, intended to spark the sluggish economy, seems to be in the works. But the short-term boost for workers could create even more problems for a giant entitlement program already facing a long-term financing shortfall.
The tax cut would cause a $289 billion loss in Social Security revenues, which would be replaced by general tax revenue funds transferred from the Treasury.
Charles Blahous, a senior fellow at the Mercatus Center, a free market-oriented think tank at George Mason University, said members of Congress have not adequately debated the merits of this proposal.
“Only two things can happen, either Social Security goes insolvent earlier, or we continue funding the program with general revenues, undermining the basis of Social Security’s longstanding bipartisan support — the idea that it’s not welfare, but a benefit earned by worker tax contributions.” Sen. Joe Manchin, D-W.V., who is up for re-election next year, also opposes the payroll tax cut arguing that the revenue loss "hits Social Security right smack in the eye."
Read the full article at:
http://www.msnbc.msn.com/id/44938646/ns/politics/-------------------------------------------
Press Releases
62 House Democrats Urge President Obama to Protect Social Security Revenues, Reject Another Payroll Tax CutWashington, Jul 21 - Today, Reps. Ted Deutch (FL-19), Lloyd Doggett (TX-25), and Mark Critz (PA-12) were joined by fifty-nine of their Democratic colleagues on a letter to President Barack Obama urging him to reject another payroll tax cut and instead consider alternative proposals that do not jeopardize Social Security’s time-tested independent revenue stream.
The bipartisan tax compromise passed last winter set a dangerous precedent by reducing employee contributions to Social Security and replenishing the Trust Fund with deficit spending from the general fund. Social Security was established with a dedicated revenue source to prohibit it from contributing to the budget deficit and to protect the retirement security of America’s workers from politically motivated budgetary attacks. “We remain gravely concerned that yet another, unacceptable cut to Social Security’s revenue stream appears to be on the table,” the members write to the President. “Enemies of Social Security reject valid proposals to give the same level of tax relief to the same Americans or American businesses without using the Social Security revenue stream and resultant general fund transfers… We are greatly concerned that a permanent extension of the 2011 payroll tax cut would double Social Security’s long-range shortfall and make long-term solutions nearly impossible.”
Joining Reps. Deutch, Doggett, and Critz on the letter are Reps. Joe Baca (CA-43), Robert Brady (PA-01), Corrine Brown (FL-03), Andre Carson (IN-07), Judy Chu (CA-32), Hansen Clarke (MI-13), Yvette Clarke (NY-11), William Lacy Clay (MO-01), Steve Cohen (TN-09), John Conyers (MI-14), Rep. Elijah Cummings (MD-07), Danny Davis (IL-07), Peter DeFazio (OR-04), Rosa DeLauro (CT-03), Mike Doyle (PA-14), Donna Edwards (MD-04), Keith Ellison (MN-05), Sam Farr (CA-17), Bob Filner (CA-51), Barney Frank (MA-04), Marcia Fudge (OH-11), John Garamendi (CA-10), Gene Green (TX-29), Raúl Grijalva (AZ-07), Luis Gutierrez (IL-04), Alcee Hastings (FL-23), Maurice Hinchey (NY-22), Rush Holt (NJ-12), Jesse Jackson, JR. (IL-02), Marcy Kaptur (OH-09), Dennis Kucinich (OH-10), Rick Larsen (WA-02), Barbara Lee (CA-09), John Lewis (GA-05), Carolyn Maloney (NY-14), Edward Markey (MA-07), Jim McDermott (WA-07), Jim McGovern (MA-03), Mike Michaud (ME-02), George Miller (CA-07), Gwen Moore (WI-04), Jerrold Nadler (NY-28), Grace Napolitano (CA-32), John Olver (MA-01), Donald Payne (NJ-10), Chellie Pingree (ME-01), Bobby Rush (IL-01), Tim Ryan (OH-17), Gregorio Sablan (MP-AL), Louise Slaughter (NY-28), Betty Sutton (OH-13), Bennie Thompson (MS-02), Paul Tonko (NY-21), Pete Visclosky (IN-01), Maxine Waters (CA-35), Peter Welch (VT-AL), Frederica Wilson (FL-17), Lynn Woolsey (CA-06), and David Wu (OR-01).
http://deutch.house.gov/News/DocumentSingle.aspx?DocumentID=253160Read the full text of the letter to President Obama signed by the 62 House Democrats at:
http://teddeutch.house.gov/UploadedFiles/Deutch_Doggett_Critz_Payroll_Tax_Cut_Letter_07-21-11.pdf----------------------------------------------
Here's what the White House said a year ago regarding the Social Security Payroll Tax Cut Obama proposed in 2010. BBI
• "The tax cut is temporary.
This is a one-year, temporary tax break intended to help working
families in these tough economic times and to help generate growth and jobs. After the
temporary provision expires, payroll tax rates will return to what they were before. It would
require an act of Congress signed by the President to change this automatic expiration."http://www.whitehouse.gov/sites/default/files/social_security_payroll_taxes.pdf