Republican Senators Spill The Beans! Obama's Deal on Payroll Tax Cut Threatens Social Security!

[Better Believe It]

This is more than enough reason for members of Congress to vote down the whole stinking deal! BBI

Republicans Casually Agree They’ll Never Allow Payroll Tax Cut to Rise Again
By: David Dayen
December 8, 2010

Nancy Altman called the payroll tax cut in the Obama/McConnell deal the end of Social Security. In her view, the American political system circa 2010 doesn’t let taxes go back up, and so Social Security will face a revenue crisis faster with a reduced payroll tax. The money will come out of general revenue to pay for that payroll tax holiday, but that just makes Social Security more dependent on general revenue – and more vulnerable. That this is all coming at a time when knives have been unsheathed and are ready to hack away at Social Security makes it all the more dangerous.

Ryan Grim asked the exact right questions, and Republicans were unusually blunt with him.

Tax Cut Deal A Hidden Threat To Social Security
By Ryan Grim
December 8, 2010

Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. “Once something like this goes into place, a year from now, when it expires, it’ll be portrayed as a tax increase,” said Sen. Bob Corker (R-Tenn.). “So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes.”

Given that Congress, under Democratic control, can’t gather itself to let tax cuts for the wealthiest Americans expire, members of both parties are convinced that letting the payroll tax rate revert back to its current spot will be near impossible.

“Once you bring a rate down, if it goes back up, people will feel that. They’ll feel their paycheck being less and that argument” — that letting it expire amounts to a tax hike — “eventually is bound to be made,” said Sen. Mike Johanns (R-Neb.).

“There’s always a tendency to continue those things… Once something comes in, it’s very difficult to change it,” said Sen. George Voinovich (R-Ohio.) He then volunteered, without prompting, that “It would be detrimental to the Social Security system, especially when it’s in bad shape.”
http://www.huffingtonpost.com/2010/12/08/tax-cut-deal-a-hidden-thr_n_793983.html

Republicans are basically telling you their strategy. They will call the expiration of the payroll tax cut an increase. They will use the reduction in revenue to claim that Social Security is in bigger financial trouble than it is. They will try to stop the money from getting restored.

This is a very risky experiment. No President has ever cut payroll taxes, even temporarily, in the history of the program.

To quote Franklin Roosevelt:

“We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics,” FDR told a Treasury official in 1941.

Read the full article at:

http://news.firedoglake.com/2010/12/08/republicans-casually-agree-theyll-never-allow-payroll-tax-cut-to-rise-again/


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Tax Cut Deal A Hidden Threat To Social Security
By Ryan Grim
December 8, 2010


The tax cut deal that President Obama struck with congressional Republicans contains a provision that could ultimately be the undoing of Social Security, say Senate Democrats and backers of the old-age and disability program.

Obama, as part of the Democratic package, secured a roughly 30 percent cut in the payroll tax, from 6.2 to 4.2 percent. Allowing it to expire in a year will mean that workers will see a nearly 50 percent jump in payroll taxes as the rate reverts back -- an event that will surely be described as a tax hike. The cut is estimated to cost $120 billion per year.

Democrats have never allowed the rate to be cut, even temporarily, in the history of the program, because payroll taxes feed the Social Security trust fund and create the political base of support for the program, said Nancy Altman, author of "The Battle For Social Security", a history of the program, and head of the advocacy group Social Security Works. Republicans have won a long-sought victory, even as President Obama hails it as a win for his party.

Sen. Barbara Mikulski (D-Md.), who chairs the Senate Subcommittee On Retirement and Aging, said she's concerned that the payroll cut will weaken Social Security and leave it vulnerable. "I'm concerned this could be the beginning of the slippery slope to getting rid of the payroll tax and cause a way of getting rid of Social Security as a public issue in the way of heading to privatization," she said. "I know it's been recommended by several economists, but this is really big. My question is, shouldn't this be viewed in a more shock wave kind of way?"

Rep. Keith Ellison (D-Minn.), co-chair of the Congressional Progressive Caucus, echoed Mikulski's concern. "On the surface, the payroll tax reduction of two percent is attractive, but when you get past the surface, it's deeply disturbing. Because what it means is we'll replace the loss of money from Social Security with general fund money, but in the past Social Security has been raided to help fund general fund programs. So how long will it be before somebody says Social Security is not sustainable and we need to cut the program?" he said. "I'm afraid we are feeding into a larger narrative that goes toward eliminating Social Security."

Stripping Social Security of payroll tax revenue will make the program appear less viable in projections, which currently gauge that it can pay full benefits until 2037 and roughly four-fifth of benefits over the next 50 years. That vulnerability can then be exploited.

The payroll tax cut that Democrats have resisted for decades is being pushed through as part of a deal moving like a Toyota dump truck with the gas pedal stuck. "I haven't even had a chance to consider that potential," said Sen. Mark Udall (D-Colo.), when asked about the effect of the payroll cut on Social Security.

Read the full article at:

http://www.huffingtonpost.com/2010/12/08/tax-cut-deal-a-hidden-thr_n_793983.html