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Wed Mar 25, 2020, 12:12 PM

And THERE is the massive social security cut in the bill. Key word: "Defer"

REPUBLICANS put this in apparently (unless it was removed?)

Companies would also be able to defer payment of the 6.2% Social Security payroll tax.


https://www.wral.com/white-house-congress-agree-on-2-trillion-virus-rescue-bill/19028077/

DEFER...for how long? Will be they be required to pay every cent of it later? WHAT mechanism is in place to enforce this?

My guess is: this is a HUGE tax cut for big business and that money will N E V E R be paid into social security. The trust fund will lose BILLIONS which will never be recovered.

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Response to CousinIT (Original post)

Wed Mar 25, 2020, 12:16 PM

1. Kind of a waste since most are not making money so they won't be paying

any of it. Grocery stores, Amazon, streaming services, and restaurants at a smaller amount. News agencies and government are the other. That’s about it.

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Response to CousinIT (Original post)

Wed Mar 25, 2020, 12:18 PM

2. Easily recovered by eliminating the cap on income subject to SS payroll tax.

But who has the guts and the votes to go there?

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Response to CousinIT (Original post)

Wed Mar 25, 2020, 12:34 PM

3. You can read about the options facing Congress here. Remember the goal is to keep employees on the

payroll. The companies could just fire everyone, or almost everyone, then they wouldn't have to pay any payroll taxes.

"Defer" pretty much means it's a loan to companies who decide they need to take advantage of it. If they are still around after all this -- which is probably a good thing for most of us -- they will have to pay it back.

But, I'm sure we can find something to gripe about.

https://crsreports.congress.gov/product/pdf/IN/IN11260

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Response to Hoyt (Reply #3)

Wed Mar 25, 2020, 12:43 PM

4. What mechanism of enforcement is in place to ensure they pay it back?

Do not minimize this at me. It's a MASSIVE CUT to social security. Did Republicans really need to take a chunk out of social security for this? NO. They're just using it as an excuse to make huge potentially permanent cuts - UNLESS there is an enforcement mechanism to ensure they pay this money AS SOON as this is over and business is back to normal. And I've heard nothing about that.

I agree that it will be a good thing if they're around after this is over, but that doesn't replace the money they didn't pay into the system for weeks or months. It just doesn't. They're literally taking money from America's seniors to give it big corporations and business. It's bullshit. Unless there is an enforced mechanism to recover the lost funds.

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Response to CousinIT (Reply #4)

Wed Mar 25, 2020, 12:48 PM

5. Wait for the regulations. In the meantime, call your Democratic Congresspeople and tell them

to vote against the whole damn bill because you don't think they should have included a deferral, remembering that the original proposal a week ago was to simply suspend the payroll tax for a year or so, with no chance of it every being paid back.

I suspect it will be just like the payroll tax reduction under Obama, the general fund will have to cover it if not paid back. If the company goes under, it might be questionable whether we get the money. If they are still in business -- which is the hope -- they'll have to pay it.

I think the short-term goal is to get us through this. One way is to reduce the incentive a company might have to just fire people. If they are fired, the company doesn't have to pay the payroll tax either. I think this is a better way.

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Response to Hoyt (Reply #5)

Wed Mar 25, 2020, 01:35 PM

6. "the general fund will have to cover it if not paid back"

When money going to social security comes from the general fund, it is then no longer self-funded but rather becomes part of the fed budget and is thus more easily cut.

I will be contacting my representatives (already contacted 2 of them) about this. The goddamned government is treating social security like a slush fund, from which money is taken to give corporations tax cuts whenever something happens. It's a CUT and most likely a permanent one.

I'm not interested in minimization of his or mockery about it. I want a clear explanation from my representatives about how this money is going to be replaced and when. Meanwhile, it's a goddamned corporate tax cut paid for with social security money. Bullshit.

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Response to CousinIT (Reply #6)

Wed Mar 25, 2020, 01:42 PM

7. Call your representative up and tell him to vote against the entire bill.

Last edited Wed Mar 25, 2020, 02:26 PM - Edit history (1)

SS has been treated like a slush fund since the 1980s, through two Democratic administrations and Republicans. No one will touch it because they know people will go beserk no matter what they do. So, we sit here with a looming, automatic 23% cut in the 2030s.

BTW: My view is that just about anything we can do to keep young people working -- and the companies they work for -- in business is good for our SS long-term. I think this Bill and the next rounds coming, will do a lot to help ensure that.

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Response to CousinIT (Original post)

Wed Mar 25, 2020, 01:46 PM

8. Face it. They have fucked us again.

Corporations will get their billions, employees will still get screwed and laid off, wages will still stay stagnant, the rich will still get richer and once more, the taxpayers have transferred more money to the rich and powerful at their own expense.

Fuck this. I am so damn sick of this kleptocracy and these criminals in charge. It is time to get rid of them by any means possible.

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Response to smirkymonkey (Reply #8)

Thu Mar 26, 2020, 12:22 PM

9. Progressives sound alarm on Republicans' Social Security sneak attack hidden in coronavirus bill

https://www.alternet.org/2020/03/this-is-a-trap-progressives-sound-alarm-on-republicans-social-security-sneak-attack-hidden-in-coronavirus-bill/

. . .

“The Republican plan would replace Social Security’s dedicated revenue [from the payroll tax] with deficit-funded general revenue, but this is a trap,” explained Altman. “Once the pandemic is done, Republicans will undoubtedly use the general revenue to demand cuts to Social Security in the name of ‘reining in entitlements,’ something they have already expressed their strong desire to do.”

The Senate GOP’s legislation, which also contains a $500 billion “slush fund” for corporations, failed to clear a procedural hurdle Sunday night amid unified Democratic opposition. A second procedural motion to advance the bill also failed Monday afternoon and talks over the measure’s specifics remain in flux.

While ostensibly intended as a form of relief for employers struggling to cope with the coronavirus-induced economic fallout, Social Security Works warned in a letter (pdf) to members of Congress over the weekend that Republican proposal to delay the employer payroll tax is “a Trojan Horse.”

“Social Security Works strongly opposes the McConnell proposal to ‘defer’ the employer Social Security insurance premium (i.e. Federal Insurance Contributions Act payment),” reads the letter, signed by Altman and Social Security Works executive director Alex Lawson. “Even though the proposal is couched in terms of deferral, it is hard to imagine that in January, Congress will truly allow employers’ FICA contributions to rise—or even be restored. Social Security supporters see this for what it truly is—a dangerous assault on our Social Security system.”

“Since there are much better ways to deliver the same relief to employers, we see this as callously using the coronavirus pandemic as a cover for an attack on Social Security,” Altman and Lawson added. “We urge you, as emphatically as we can, to oppose this proposal.”

Last Friday, nearly two dozen progressive advocacy groups representing retirees, veterans, organized labor, and communities of color joined (pdf) Social Security Works in urging Congress to quickly provide economic relief to people and small businesses without cutting Social Security in the process.

“Decreasing or fully eliminating the FICA undermines the foundation of our Social Security system and sets the stage for future demands to cut Social Security, even if the proposal replaces the lost revenue with deficit-funded general revenue,” the groups wrote in a letter to Republican and Democratic congressional leaders.

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Response to CousinIT (Original post)

Thu Mar 26, 2020, 01:07 PM

10. Deferring or even cutting the payroll tax doesn't necessarily cut social security benefits.

During the Obama administration payroll taxes were cut for two years -- but it did not impact social security benefits.

Under the stimulus bill, the deferral provision allows companies to delay paying the 6.2% payroll tax until Jan. 1, 2021, with 50% owed by the end of 2021 and the other half due Dec. 31, 2022. (Ordinarily, companies are required to deposit their share of the payroll tax monthly or every other week). Medicare payroll tax payments are not subject to the deferral.

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Response to onenote (Reply #10)

Thu Mar 26, 2020, 01:45 PM

11. Uh. THIS one SPECIFICALLY "defers" the employer part of the FICA tax (social security)

It lets corporation "defer" paying their 6.2% share - for TWO YEARS.

EDIT to add: And making up the difference from the general fund subjects this self-funded source to CUTS.

I'm aware of the "pay half by end of 2021 and other half by end of 2022" arrangement. That doesn't mean they'll DO it - likely they'll beg to have the cut made permanent - or at least not have to pay it back.

YOU trust corprats and Republicans? I do NOT.

This is and will remain a nasty huge backdoor CUT to Social Security during a World pandemic, buried in a "stimulus" bill by REPUBLICANS.

Don't be gullible.

And don't be obtuse. OF COURSE IT DOESN'T CUT BENEFITS TODAY. But it will cause cuts to have to be put in place SOONER because the trust fund will lose BILLIONS and not be able to pay full benefits anymore - already slated to happen 2033. With this CUT, it will likely happen much sooner.

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Response to CousinIT (Reply #11)

Thu Mar 26, 2020, 02:40 PM

12. Did the two years of payroll tax cuts during the Obama administration

also cause cuts in benefits to be put in place? Those cuts also were made up from general funds.

Just trying to understand the difference in this step and the steps taken by the Obama administration.

And whether you think the Democratic caucus in the Senate, who voted unanimously for this legislation, were unaware of the payroll deferral provision?

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Response to CousinIT (Original post)

Thu Mar 26, 2020, 02:43 PM

13. This is not a cut.

There is no cut in benefits whatsoever. Every Democrat in the Senate voted for this bill.

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Response to former9thward (Reply #13)

Thu Mar 26, 2020, 02:50 PM

14. Quite right, there is no cut to SS benefits in the future or to those receiving benefits now

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