After Signaling Support, John Boehner Calls Tax Break For Middle Class ‘Chicken-Shit’

[ProSense]

After Signaling Support, John Boehner Calls Tax Break For Middle Class ‘Chicken-Shit’

By Alex Seitz-Wald

Despite their stated opposition to tax increases, Republican lawmakers have been largely cool or even hostile to a proposed extension of the temporary payroll tax cut, pushed by President Obama and Democrats. Finally, this week, Republicans seemed to relent as GOP congressional leaders publicly urged their caucuses to vote for an extension of the plan. “The fact is that Republicans are doing everything we can to allow American families and small businesses to keep more of what they earn,” Speaker John Boehner (R-OH) said this morning of efforts to whip GOP lawmakers to support an extension.

But in private, Boehner seems to hold a different view. Politico reports that in a closed-door GOP meeting this morning, Boehner referred to an extension of the payroll tax holiday as “chicken-shit,” saying he wanted to tack on unrelated legislation favored by Republicans to make it palatable:

GOP leadership told its membership at a closed-door meeting Friday morning it would couple with the expiring tax provisions an easing of environmental regulations on boilers, selling broadband spectrum and paving the way for the controversial Keystone XL pipeline. <...>

Speaker John Boehner referred to the package he’s putting forward as turning “chicken-sh — into chicken salad,” according to people attending the meeting in the Capitol basement Friday morning.

Translated, he’s going to pass President Barack Obama’s preferred tax cut, but he wants some skin from Democrats for it.

So which is it? Does Boehner actually believe in extending the payroll tax holiday for the middle class, or is that “chicken-shit”? An extension of the payroll tax holiday would help 95 percent of working families, but would disproportionately benefit working and middle-class people, as there’s a cap that prevents wealthy people from being taxed on anything they make over about $100,000.

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[RaleighNCDUer]

1. Jesus fucking christ. The so-called 'payroll tax cut' is already undermining

the solvency of Social Security - isn't that enough for the Boner?

[JoePhilly]

2. The solvency of SS is fine.

[TheWraith]

3. No, it's not. SS is perfectly solvent, and hasn't lost a dollar from the payroll tax cut. nt

[Sirveri]

5. The point is that it ties SS into the general fund, which makes it a target for cuts.

Oh look, OASDI is adding so much to the deficit (because it's now grabbing 1/3 of it's funding from the general fund), so we need to cut it. THAT's the opposition.

One would think that this has been stated enough times for everyone to have heard it, but they keep ignoring it.

Still want the tax relief, the solution is simple, give a 2% income tax rebate on tax liabilities up to 116k (or whatever the cap is currently at). It accomplishes the same thing while leaving the payroll tax structure intact and keep Social Security off the table in regards to cuts.

[bornskeptic]

7. No matter how many times a lie is stated, it remains a lie.

Yes, your suggestion would accomplish the same thing, but it would cost more and get the money nto circulation slower, and low-income people would have to pay H&R Block for an additional form. But no matter how many times you close your eyes and force yourself to believe nonsense, the payroll tax cut has absolutely no effect on Social Security.

[Sirveri]

12. I wasn't aware that low income people were required by law to pay H&R block.

As a low income person myself, I always do my own taxes. Pardon my snark, but your statement implies that poor people are too stupid to fill out a form. They're not. If you'd like a faster rate of entry, you could just spike the minimum wage upwards. That's assuming that a lump sum is automatically worse than a diffused sum of the same value (the lump sum is typically used to perform positive fiscally healthy actions, like obliterating a credit card payment, or other reductions in the use of credit towards large purchases).

The payroll tax cut has an effect on the political machinations used to protect social security funding, that's the problem, the innocuous act that snowballs down the slippery slope and leads to the inevitable destruction of the entire system by way of under funding. But I go into that in more depth in the lower post.

[bornskeptic]

18. Of course they aren't required to, but many of them do.

I'm not implying that anybody is too stupid to fill out a form, but the fact is that millions of people in all income categories pay someone else to prepare their taxes.
Your snowball theory is simply out of touch with the way things work. Every other social safety net program is funded entirely or in part from the general fund. SSI, WIC, and food stamps are funded entirely from the general fund. The federal portion of Medicaid is funded from the general fund. About half of Medicare is funded from the general fund. When the Affordable Care Act comes in to effect in 2014, the support payments for premiums and out of pocket costs will come from the general fund. However popular those programs might be, Social Security is the most popular program of all. The idea that the defense of Social Security would somehow be weakened because 15% of its revenue was coming from the general fund is nonsense.
The only reason Social Security was set up to be totally funded by payroll taxes was that Conservative votes were needed for passage, and Conservatives wouldn't support it if part of the funding came from income taxes. In the 1960's the political climate had become more liberal, and Medicare was established to be funded by a combination of payroll taxes, income taxes, and premiums.Medicare has lasted for over 40 years. I've heard many demands for cutting Medicare, but I've never heard the claim that it should be cut because its funding comes from the general fund.

[TheWraith]

8. Sigh. No.

One: Social Security is ALREADY tied to the general budget. Where do you think the Social Security Trust Fund came from? That $2.6 trillion dollars is invested in US government bonds. As we draw down the SSTF to pay for the baby boomers, that money is going to have to be either repaid by the government, or borrowed AGAIN from China and Japan. Social Security is inextricably tied to the general budget

Two: your suggestion does not have the same value as the payroll tax cut, since it excludes very low income persons who don't pay income taxes by DO pay payroll taxes. Not to mention that it delays people getting the money until the following year, and is one more complication for them to deal with in filing taxes.

[Vattel]

9. I don't get this:

"One: Social Security is ALREADY tied to the general budget. Where do you think the Social Security Trust Fund came from? That $2.6 trillion dollars is invested in US government bonds. As we draw down the SSTF to pay for the baby boomers, that money is going to have to be either repaid by the government, or borrowed AGAIN from China and Japan. Social Security is inextricably tied to the general budget." I thought social security and its trust fund was funded by FICA taxes. Am I wrong?

[Sirveri]

10. It is funded by FICA, but the excess is used to buy government bonds.

Which is why it is currently sitting on 2.6 Trillion dollars of US government debt.

[TheWraith]

13. FICA is where the money comes from. The Social Security Trust Fund is where the money is invested.

Invested, in this case, in US government bonds. Back in the '80s when they first realized that the boomers were going to stretch the system to the limit, they hiked the payroll tax and started saving the surplus. That became the Social Security Trust Fund. Rather than let that money sit there, they invested it in government debt, in order to make more money off the interest/returns (which is good, because otherwise Social Security would already have been drawing on the trust fund), kind of like putting your money in a Certificate of Deposit instead of just leaving it in your savings account.

The link to the general budget is that because that $2.6 trillion in the SSTF isn't sitting in a bank account somewhere, when that money is eventually needed to pay for retiring boomers, the federal government needs to pay it back, kind of like calling in a loan. Either that, or we have to borrow more money from China to repay the bonds in the SSTF. Either way, it boils down to the government owing SS money.

[Vattel]

19. Thank you. That clarifies things for me.

[Sirveri]

11. I was thinking about a check for 2% based on total income.

Though yes, you'd have to file in order to receive it. Considering how easy a 1040EZ is to fill out, I don't have much sympathy for that argument, though I do have sympathy for needing the cash in the weekly check as opposed to a bulk sum (though that promotes savings rates and/or large purchases that don't require credit).

As for the first, while you are correct that the draw down will have an effect, all that will do is perform a debt shift from intra-governmental to foreign/domestic entities. The problem is currently FICA isn't even seen by the general fund until it is apportioned into the OASDI system. By attacking FICA that shortfall must then be made up by the general fund directly. Previously we could claim that Social Security was a fully funded program which didn't add to the budget deficit, that argument is now demolished, which means it will be subject to the same tactics used to attack food stamps, LIHEAP, and other social welfare programs. Then once they cut the 'excess' funding the shortfall comes out of the SS Trust fund and bankrupts the entire program. My argument is that this is a slippery slope that damages the political machinations originally put in place to protect the program from the GOP hatchet men.

[creeksneakers2]

15. Republicans absolutely refuse to vote for any tax

rebate that will grant refunds beyond income taxes paid in. The GOP says that negative tax liabilities are welfare. Since most lower income people don't pay income taxes, they would not benefit at all from a rebate capped at the total of income taxes paid in. The only way to get money down to the bottom of the ladder is with a cut in SS taxes.

[Sirveri]

16. I agree with your view on the political feasibility in regards to this subject.

That said, I'm still highly concerned that the GOP will use this as a wedge in the door to cut the program, since we know that they desperately want to destroy Social Security.

[DCBob]

4. Sounds like Boner is ready to make a deal..

but he's just pissed he being forced to do it.

[TheWraith]

14. Boner is stuck between Obama and the Tea Party.

Boner is enough of a professional politician to know that there ARE some times that things have to get done, or that you can't get your way. But he's jammed in between the Tea Party nuts in Congress, who want things which even an asshole like Boehner thinks are crazy like putting the US into default, and Obama grinding away at him over things like middle class tax cuts that are massively popular but the Reps oppose. He's in the position of either appearing to fold for what Obama wants, which would lose him his job, or really folding for what the Tea Party loons want, which would make the Republican Party radioactive.

[DCBob]

17. Good analysis of the predicament the Orangeman is in.

Will be interesting to see how this plays out.

[agentS]

6. See why I hate Republicans so much?

His district really does the rest of the country a disservice sending him to Congress.