There has been much confusion about whether extending the payroll tax cut will direct funds away from the Social Security and Medicare trust funds. Saying that it will has become a standard Republican talking point as an excuse for opposing it, and the confusion has spread to our side of the aisle as well, since most Representatives and Senators have not actually read the bill. It’s time for the confusion to end. Extending the payroll tax cut will NOT undermine Social Security.
As some Republicans, including Majority Leader Eric Cantor (VA), are growing worried that opposing a payroll tax cut extension will undercut their message as anti-tax zealots, other Republicans have opposed the extension at every turn. Despite their staunch opposition to raising taxes on millionaires, these Republicans have cycled through the reasons to avoid providing a tax cut to the middle class that would allow the average family to pocket an extra $1,000 a year.
The latest argument to emerge from the GOP has been that extending the payroll tax cut would undermine Social Security, since payroll tax revenue goes directly into the Social Security Trust Fund. Multiple Congressional Republicans have adopted that theory of late, including South Carolina Sen. Jim DeMint (R), who put it to use on CNBC last night…
…Watch a compilation:
That argument, which has been adopted by members of both parties and perpetuated by news outlets like NPR, has one problem: it’s not true. Each of the plans under consideration is fully paid for, replacing revenue the Social Security Trust Fund would have lost from lower payroll tax receipts with money made up from either alternative revenue sources or spending cuts. The earlier payroll tax holiday, set to expire this month, was also fully-funded, and the program has thus far “been held harmless” from the holiday, as Reuters noted today… [emphasis added]
Inserted from <Think Progress>
The Director of the Social Security Administration has confirmed that this is true. Neither the proposals under consideration, nor the current payroll tax relief have or will diminish the Social Security and Medicare trust funds by a single penny. Republicans oppose it for another reason. Every penny that goes to help Main Street Americans is a penny Republicans can’t give to a billionaire.
14 Responses to “Payroll Tax Cut Will NOT Undermine Social Security”
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More Republican bullshit and hypocrisy. As if any of them even cares about Social Security—they all want to privatize it anyway! Realistically, they are just trying to make a stink about the program because they know how vulnerable THEY are becoming on it, and are trying one desperate move after another to discredit Obama on everything. And yet they want to take over the White House? As I show in my current post, “WHEN PRESIDENTS WERE ACTUALLY QUALIFIED”, NONE of them are even close to having what it takes to be an effective President! DISGUSTING!
Well said, Jack.
The only conclusion is that repubicans are [A] Wilfully Ignorant … or [B] Outright Liars … or [C] BOTH
If you selected [C] BOTH – you’ve earned a score of 100%
Wooo Hooo!! I guess that makes me a genius! 😉
A benefit to most Americans? Well, the RepublicanTs can’t advocate that!
…or won’t.
Is there not a remote island somewhere in the middle of Dawg-forsaken nowhere that we can ship all these souless idiots and the fools that trust and believe their bullshit can be shipped to??????? That’s what they want to do with us, if not outright murder us through starvation, disease, despair and suicide. I want them gone. Yeah, I know, big dream. Unfortunately, these dreams I have are about the only thing left that I have to keep me sane.
The tax breaks for the poor/middle class are not affecting SS/Medicare. BUT, how convenient the GOPers willfully forget that ALL of them up there OWE the SS Fund 4 TRILLION DOLLARS that THEY TOOK (STOLE) from the fund over the years. They have no intention whatsoever of ever paying that debt back to the people who worked all their lives to put it in there. Some have said so on air!!!!!!!!! I want them gone!!!!!
Terrie, if you ship them to an island they might go skinny-dipping. Think of all the water pollution!
The Rushpubliscums have become completely insane. This isn’t a political party; it’s a death cult. My patience with those who still vote for these walking dog droppings has completely evaporated at this point.
JR, I agree. Everyone who is not helping to get them out of office is part of the problem.
TomCat “. . . since most Representatives and Senators have not actually read the bill. . . . “ Well isn’t it about time that they did? How can anyone understand and vote properly if they haven’t read the bill? Now I can understand the Republican/Teabaggers not reading it because they only believe what they are told to believe, vote the way they are told to vote, and all goosestep to the same tired rhetoric! But the Democrats? How can they fight the Republican/Teabaggers without arming themselves with information, and not the Cliff’s Notes version!
Am I recalling correctly that Bernie Sanders said some time ago that Social Security, as it is, is fully funded for the next 75 years? And what about what Terrie said “. . . how convenient the GOPers willfully forget that ALL of them up there OWE the SS Fund 4 TRILLION DOLLARS that THEY TOOK (STOLE) from the fund over the years. . . .” I’ve heard of large corporations “borrowing” from “pension trust funds” during lean times and then never paying it back. Perhaps it’s time that someone with the ability to read and understand went back to the legislation and confirmed how the tax-cut holiday was funded in the first place.
Just another Republican/Teabagger propaganda ruse!!!
Lynn, dozens of bills are introduced every week, and most are hundreds of pages long, so they can’t. They have staffers who read and summarize them. If a staffer screws up, or has an itchy palm, the legislator can get an incomplete or inaccurate understanding.
Extending the payroll tax cut is not a real solution nor does it help sustain Social Security. There are a number of other options for making Social Security a sustainable program and for reducing the deficit. Progressive price indexing would substantially reduce the long-run funding gap to $3.2 trillion from the current law funding gap of $16.1 trillion. Thus, it would only require a modest solvency tax increase equal to 0.6% of taxable payroll. In terms of long-run spending, it would result in the second smallest program, about 82 percent of the size of the current program. Also, changing the benefit formula for SS would essentially eliminate the long-run funding gap and require no additional solvency tax. It also would produce the most dramatic reduction in spending on benefits, equal to 23% of long-run spending under the current benefit formula. In addition, it would retain the progressive nature of the benefit formula, but reduces the degree of progressivity relative to the current formula. Furthermore, raising the retirement age would reduce Social Security’s unfunded obligations for retiree benefits to $6.3 trillion and require a solvency tax of 1.3% of taxable payroll. It would result in the third-largest program, with about 87% of the current law spending. Moreover, though the distribution of net taxes would still be progressive, of the four potential changes considered it would reduce the degree of progressivity the most relative to current law. Finally, eliminating the taxable maximum would reduce Social Security’s unfunded obligation for retiree benefits to $8.3 trillion and require a 1.3% payroll tax increase. It would result in the largest program in terms of long-run spending, and would increase the progressivity of the program (http://eng.am/sWDUJ8).
Welcome Carly.
That looks like a very impressive screed, but it is very misleading. There is nothing at all progressive about progressive price indexing, because it’s just another front for that old Republican scheme to cut people’s Social Security benefits. Acccording to the CBPP, it substantially reduces the benefits of average workers. A far better solution is to lift the income cap.
I would not be fair to our readers is I did not reveal that your organization, Engage America,. fails to disclose who operates and funds it, but looking at your policies, such as fighting against Walker’s recall, I see a Koch Brothers fantasy.