Paul Krugman explains why the Republicans hate the extension of payroll tax cuts

[NNN0LHI]

http://krugman.blogs.nytimes.com/2011/08/05/anti-stimulus-politics/

August 5, 2011, 3:25 pm

Anti-stimulus Politics

<snip>Remember, the Obama administration extracted such a cut as the price for its surrender on the Bush tax cuts — and it has been trying to get that cut extended, as the only economic stimulus it considers politically possible. And the GOP has turned it down flat.

How can that be, when Republicans love tax cuts? The answer is, they don’t. They love tax cuts for the rich. Tax cuts for ordinary workers, many of whom will be those hated lucky duckies whose incomes are too low to pay income tax, are if anything something Republicans dislike.

Also, the GOP is against any idea that (a) comes from Obama (b) might help the economy before the 2012 election.

Again, this is why you have to pay attention to politics. Straight economics is necessary, but won’t get you to the full reality.

[spanone]

1. in essence, republicans are un-american. period. eom.

[Cresent City Kid]

2. They even got the blessing of Pope Norquist

Usually the expiration of a temporary tax break is strictly defined as a tax hike, thereby a break of the Pledge, but not this time. These fuckers twist semantics into oragami. When a 3% hike on the top marginal rate is proposed, we hear about how bad this will be for those who could potentially be small business owners. But when Obama proposes a tax cut for actual small businesses along with one for most Americans, somehow this needs to be stopped.

[eilen]

3. I'm still scratching my head over this issue

The payroll taxcuts that were part of the deal to extend the Bush tax cuts last year-- right? These were the cuts of payroll taxes that normally go to fund Social Security, correct?

Well, I didn't support that to begin with. SS needs to be funded. I thought he made a bad deal then and now.

[joshcryer]

5. In the short term, it has no effect. The Democrats want to actually reduce it further.

Currently it's 6% something percent, they want to drop it to 3%. The Republicans hate this idea. So likely nothing will change.

It's not like it's going to make a dent in SS. SS is solvent for at least two decades.

[JHB]

10. And just as a reminder when we say "SS is solvent for at least 2 decades"...

...other programs, such as those of the Defense Department, or Congress' salaries, insurance, and pensions, are not solvent at all and never have been. They're all paid out of general funds and spacial appropriations. Only SS and Medicare have dedicated revenue streams which built up the SS Trust Fund (supposedly as a measure agaist precisely the shortfall that was expected as the Baby Boomers move into those programs).

So saying it is "insolvent" would mean the shortfall would need to be paid out of general revenue, and that presumes no adustment to SS taxation, sush as raising the cap on SS-taxable income.

Let's further note that actual SS revenues depend on the state of the economy. If we get (quite attainable) levels of growth, it becomes solvent indefinitely. But doing that would cut to executive bonuses and the level of shareholder profits, so people who don't need SS aren't too eager to push for that.

[earthside]

8. You are right!

I also have been against this scheme from the beginning.

Messing around with Social Security is dangerous business especially with the Teabag-Repuglicans a part of the mix.

While I believe that middle and working class Americans need tax relief or an infusion of money to help us pay the bills, tinkering with the Social Security funding mechanism is going to end-up being a big mistake.

If the Congressional Repuglicans go along with extending and broading this payroll tax 'holiday' ... I foresee the day coming soon when it will be turned against Social Security by the rightwing as evidence that Social Security is bankrupt and needs to be 'reformed'.

The truth is that Democrats and progressives need to argue for income tax cuts for the middle and working classes and income tax increases for the above $150,000 crowd.

[DCBob]

4. just remember their number one prioirty is removing the President from office.

They wont agree with anything that has a chance to help the President win in 2012.

[joshcryer]

6. Yep. I just hope the American people are watching. The Republicans talk the talk...

...but when push comes to shove they won't walk the walk.

[DCBob]

7. The problem is many are watching, but they are watching Faux Newz.

which we all know is an alternate reality.

[Fumesucker]

9. I think it's brilliant politics on the part of Obama, he gets to hurt SS while Republicans oppose it

No, the actual sums involved don't particularly hurt SS but the idea that SS is a separate program from the rest of the federal budget is now damaged if not gone altogether.

You cannot say any more that Social Security is funded entirely separately from the rest of the federal budget, that is a huge psychological step in getting rid of it.

[MjolnirTime]

11. it's all Obama's fault, in the end. Right?

[Fumesucker]

12. "Fault" assumes that you think Obama is doing a bad thing..

People don't say things like "It's my fault our team won the game".

If you think joining SS with the rest of the federal budget in the public mind is a good thing then no, it's not Obama's fault because fault is the wrong word to use, "triumph" would be a more fitting one.

:shrug:

[MjolnirTime]

13. Are you even on the same team as Obama? I am.

[Fumesucker]

14. I'm on my grandchildren's team..

That would be the team of the 99%.

Do you disagree with me that it no longer can be said that SS has an entirely separate funding stream in the federal budget?

[MisterP]

15. oh yeah, undermining Social Security would be a huge boost to the economy

[TheKentuckian]

16. The short answer is they are oppositional assholes.

They have long pushed for this cut and will never allow it to go away should it be in place when they take over. I grant they are more about the employer side of the cut and that they'd scheme to maintain the revenue from workers while killing benefits but can certainly they live this shrink the pig tactic for a while m it only bolsters perceptions that allow nonsense positions to be marked and allows falsehoods to become reality in exchange for desperate, compromised, and short term crumbs.