“If the Bush tax cuts were wrong (and I believe they were) why is it I am supposed to embrace the Obama "Payroll Tax Holiday" when it is taking money out of the Social Security Trust Fund? I mean, that is what the Payroll Tax is, isn't it? Why would I want to under-fund my Social Security?”
There were a few comments; none of which actually advocating for the Payroll Tax Holiday. Most everyone agreed that the Bush Tax Cuts should go away and a couple went into a discussion of healthcare costs and why we are in such financial trouble to begin with. A couple of folks provided me with the “official Obama explanation” (which pretty much sums up what I already knew):
“The payroll tax goes to the Social Security Trust Fund, but this proposal would not jeopardize the Social Security Trust Fund or the solvency of Social Security because the Trust Fund is made whole by general revenues. (In other words, the federal government would simply transfer funds from other areas into the Social Security Trust Fund to make up for any losses). Because of this, the Social Security Chief Actuary has certified that this proposal would not affect the solvency of Social Security. To pay for the payroll tax cut, the Senate plan would impose 3.25% surtax on people making over $1 million per year. To encourage more hiring, companies would not have to pay any payroll taxes on newly hired workers — on the first $12.5 million of an employer’s increased taxable payroll for the 4th quarter of 2011 and the first $50 million in increased payroll for 2012.”
So here are my issues with this scheme. First, the very fact that we are even discussing anything to do with Social Security at a time when the Republicans (and some Democrats) seem more than willing to “review” or “modify” the program as part of the discussion of deficit reduction, should make everyone nervous. Second, as we discovered last night, there is no way this Republican Party is going to ask their millionaires to reimburse a raid into the Social Security Trust Fund. Third; but perhaps most importantly, for the past few years, we Progressives have been able to rebut Tea Party and Republican rhetoric about Social Security contributing to the national debt by insisting that the program is run from an independent fund (hence the separate deduction on your paycheck and the whole basis for the Payroll Tax Holiday) and does not impact the General Fund. With this scheme (dressed up as a blessing on working people), Obama and congressional Democrats are handing the right-wing the argument they want to validate their desire to eliminate the program (or severely cripple it) as being a drain on the General Fund.
I ask again; why would any Progressive American support this scheme? I know that I certainly do not and am glad to read this morning that, at least for now, the notion is stalled. Of course that doesn’t mean Obama can’t revive it again by capitulating away some other Progressive token like a reduction in the Defense cuts set to take place next year.
Peace,
Chad (The Left) Shue
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