Senate Republicans propose plan to pay for payroll tax cut

[Freddie Stubbs]

Source: CNN

Washington (CNN) - In an effort to offset the cost of extending the current payroll tax cut for one year, Senate Republicans on Wednesday proposed freezing federal salaries, reducing the federal work force and keeping millionaires from getting food stamps and unemployment benefits.

The proposal would raise the $120 billion to cover the payroll tax and would bring in an additional $111 billion Republicans say would be used to pay down the nation's debt.

Details of the GOP plan came a day after party leaders first publicly embraced continuing the tax break, which many complained was not successful in stimulating the economy.

"It's important to underscore, however, that the only reason we're even talking about extending a temporary cut in the payroll tax is because President Obama's economic policies have failed working Americans," Senate Minority Leader Mitch McConnell, R-Kentucky, said in a statement.

Read more: http://politicalticker.blogs.cnn.com/2011/11/30/senate-republicans-propose-plan-to-pay-for-payroll-tax-cut/

[OhioChick]

1. "keeping millionaires from getting food stamps and unemployment benefits."

Millionaires can get food stamps?

[zbdent]

3. What's outrageous is, if this really is true ...

that Republicans have let this go on and on throughout all the years ... DURING THE "CONSERVATIVE YEARS" OF THEIR HERO, GEORGE W. BUSH ...

[former9thward]

7. Yes they can.

This is just one example http://news.yahoo.com/blogs/detriot/2m-michigan-lottery-winner-defends-food-stamps-172712202.html Anyone who defends this abuse should be ashamed of themselves.

[OhioChick]

8. I never knew this practice existed....

Kids are going to bed hungry and millionaires are collecting food stamps. What has this country become?

Thanks for the link. I'll be sure to pass it on, as I'm sure that many others aren't aware of this.

[former9thward]

9. There are also millionaires collecting unemployment

As in here where a school superintendent collected nearly $1 million in a bonus after being fired and then filed for unemployment. I firmly believe unemployment should be mean tested. http://philadelphia.cbslocal.com/2011/11/29/former-philadelphia-schools-chief-arlene-ackerman-files-unemployment-claim/

[OhioChick]

12. Pure greed......

Reading articles such as what you've posted just piss me off. :mad:

Thanks for the links, though. :)

[IamK]

13. it's based on income, not net worth... see link below..

http://www.usatoday.com/news/nation/2011-05-19-lottery-winner-food-stamps_n.htm


or if you have a shitload of money, but lose your job, your "income" is likely nera $0...

[karynnj]

14. I read that and looked back to see the source (CNN), thinking it was someone being

sarcastic. I would assume that a millionaire, if laid off could {/i] apply for unemployment, but the question is whether they would think the effort was worth it for, what to them, would be so little return.

Food stamps seems unlikely.

[Yo_Mama]

16. Yes - the rules were changed to look at just income and not assets

Very wrongly, IMO. Not only that, but the big subsidies for medical insurance under ACA are also available purely on the basis of income without an asset test, and I think it is terribly wrong.

We're talking about cutting benefits to the very poorest in the future because we don't have the money (and in some cases, we are doing it now), yet the public is subsidizing some wealthy people. IMO it's morally insane.

[Yupster]

18. Are food stamps based on assets or income?

If you have $ 10 million in tax free bonds, then you report $ 0 in taxable income.

[Yo_Mama]

21. Many states have eliminated the asset test

Some stats, a bit outdated, in this article:
http://www.startribune.com/business/86669707.html

A lot of states have no asset test for Medicaid, either:
http://www.statehealthfacts.org/comparetable.jsp?cat=4&ind=228

A lot of families with very high net worths do have these programs. Farmers, etc.

I don't think it's right. It shouldn't just be a test for financial or liquid assets, either. There is something wrong with a country that allows those with millions in land or RE or other property to get benefits when poor people are just scraping by.

[Autumn]

2. Yep that will fucking do it.

Worthless millionaires living on food stamps and unemployment benefits. And a bunch of over paid lazy federal workers need to be laid off.



Bastards. God I fucking hate these idiots.

[Rosa Luxemburg]

4. The Senate republicans can donate all their salaries

[Swede Atlanta]

5. Fuck you......

Federal employees are experiencing the same increase in prices as everyone else. The majority, unlike Congress, can't depend on corporate donors to pay for their Porsche. These employees that serve all of us should not be the sacrificial lambs to enable the wealthy to get any richer.

[atreides1]

15. It's part of the NorquistRepublican plan

Make federal offices unable to serve the people of America and then privatize them, at the same time the government becomes smaller!

I wonder how those federal workers who voted Republican are feeling right now...it's kind of like shooting yourself in the face!

Yes I do work for the federal government and yes I am a registered Democrat.

[blueclown]

6. This proposal also involves means-testing Medicare premiums.

To what extent, it is not known. Medicare Part B is already means-tested. Republicans want to eventually make Medicare a program that serves only the poor, so they can axe it when the time comes. This Republican proposal is extremely dishonest, and should be rejected instantly by Senate Democrats. One only has to look at the Buffet Rule Act to see the height of GOP intellectual dishonesty.

[DallasNE]

10. Oh, Wow!

McConnell sure is going after the millionaires and billionaires. Just think, no more food stamps and unemployment benefits for them for a whole year. That will sure show them and the American people just how serious they are. Let's first let CBO score this. I have a hunch the costs of this will exceed the savings. That means that 100% of the cost of this will be borne by rank and file government workers, including the firing of untold thousands and adding to the unemployment problem. McConnell's mean streak shows no sign of letting up. I've got another solution. Start one year early on the defense spending cuts that are set to kick in in 2013.

[dennis4868]

11. I wonder why....

repubs did not demand that the Bush tax cuts be paid for?

[Yo_Mama]

17. Well, the Dem plan wouldn't even come close to covering it

I thought it was totally dishonest. Anyone can look at the tax stats and see that a 3.25% extra tax on those with incomes over 1 million a year wouldn't cover a fifth - closer to a tenth - of the FICA tax cut proposed for 2012. Here - look at them yourself:
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133414,00.html
It's Table 1 at the above link. You can add up the total incomes for those with incomes of over 1 mill annually, and you'll notice they are about 10% of total income.

So I think the Democrats should be ashamed of themselves on this one - we need to raise taxes on the wealthy, but we should do so to address the shortfalls in the system for the future, and not for some temporary program like this.

Let's not forget that the proposal is to give a couple with two 100K salaries a combined $6,200 federal tax break next year. It won't help the economy much, and it does endanger SS in the future if we don't find a way to cover the deficit next year.

Why do we keep giving big tax cuts to people who are doing well? A worker earning 15K would get $465 next year. That person needs it. That person will spend it - on shoes, food, clothing or utilities - on basic needs. That's worth doing, but why are we giving so much more to people who have high incomes.

And WHY are we increasing subsidies to the wealthy, when we all know that we have tough times ahead. It's not as if this is long deferred - current projections have the Disability trust running out of funds in 2017 or 2018, which under current law would force over a 20% cut to each person receiving disability by 2018.

I have come to despise those in DC. Everyone now seems to be working for the interests of the winners - no one wants to look out for those who are running into difficulties. Not only is it bad ethically, but economically it is FLAT INSANE. Stimulus only works if you move the money where it is missing. When you give these subsidies and tax breaks to wealthy people, they just save more in hard times.

[Yupster]

19. I think the idea is that

the $ 100 billion annual increase in taxes would pay for the one year $ 1,100 billion cost of extending the payroll tax holiday over ten years.

Of course that assumes the holiday would end in one year which is what was supposed to happen this year.

When it comes up for expiration a year from now it would be the same thing. You can't raise taxes on every working American so the holiday has to be extended.

[Yo_Mama]

20. Exactly - how can we ever get out of it?

So we are afraid to restore the FICA tax in 2012, so why are we talking about increasing the tax cut? It makes our problem worse, not better.

The annual cost of the plan to cut FICA 3.1% plus given employers a break on the first five million in payroll was estimated at 248 billion. The annual increase in taxes involved in the 3.25% tax increase for just the wealthy would raise no more than 27 billion, probably more like 24 billion.

It's not a good risk - we need to raise taxes on the wealthy to cut the rest of the deficit so that we can keep paying SS and Disability, not cut tax revenue further. The economic effect of defaulting on SS for most of those who receive it will be much more negative than any short-term positive effect from this proposal.

And then there's the nasty little question of why give such large tax breaks to those who don't need them. Spending that created jobs, or that extends unemployment, or that goes to those who are earning very little, is going to have a much bigger relative effect on the economy.

Quite a few Democrats whom I respect raised the problems with the FICA tax cut last year when it was first proposed - now we are doubling down and getting into ever more dangerous territory.

Why not restore the MWP, raise it to $500 max, and phase it out quicker? This would have far more net impact per dollar spent, and hugely less future negative impact! MWP was a reasonable measure, but last year we popped out into ReaganLand, and we just seem to keep diving down rabbit holes.

I'm sorry, but the theory that we need to be handing out thousands of dollars in federal tax cuts to high earners is so fundamentally flawed that it does not deserve respect.

[DallasNE]

22. "Increasing Subsidies To The Wealthy"

I was not aware of this being part of the payroll tax holiday so can you elaborate.

Also, I heard someone on TV the other day explain that the SS trust fund is not affected because there is a dollar for dollar transfer from general revenue to make up for the lost SS taxes. I haven't verified that, however.

A proposal I made in another post on Tuesday was to move up the defense spending cuts by one year. That may or may not be enough but it would make a good dent.

[SKKY]

23. Wait, wait, wait just one hot minute!!!

I thought tax cuts paid for themselves??!!

[and-justice-for-all]

24. Maddow explained this nonsense last night...

Repukes are full of shit as usual.