President Obama's Social Security Payroll Tax Holiday: Talk about a Ponzi Scheme!

[Better Believe It]

The Payroll Tax Holiday: Talk about a Ponzi Scheme!
by Wendy Mink
September 9, 2011

Is President Obama trying to kill Social Security without explicitly saying so? He put Social Security "on the table" for consideration by his Deficit Commission -- even though Social Security has not contributed to creating or sustaining the deficit/debt in the first place. He kept Social Security on the table when he made a deal to delegate deficit reduction authority over entitlements to an undemocratic Super Committee. Now, in a speech reportedly about jobs, he proposed to extend and increase the ill-considered FICA tax cut he embraced last December -- a tax cut that directly undermines the financial integrity of Social Security.

According to the White House Fact Sheet on "The American Jobs Act" the FICA tax holiday for workers will be increased to a 50% reduction, lowering it to 3.1%. Under the 2010 tax deal, the payroll tax for workers was reduced from 6.2% to 4.2%. In addition to expanding the tax cut for workers, the President proposes to extend the FICA tax holiday to employers by cutting in half the employer's share of the payroll tax through the first $5 million in payroll.

Under the payroll tax cut initiated in the 2010 lame duck tax deal, the revenue loss to the Trust Fund from the payroll tax holiday is made up through compensatory payments into the Trust Fund from general revenues. The President proposes to continue this scheme --deepening a relationship between Social Security and general revenues (read deficit) that did not exist until the December 2010 tax deal. This will make Social Security increasingly vulnerable to demands for "reform."

Once the payroll tax basis of Social Security financing has been corrupted the future of Social Security will no longer be in doubt. It won't have one.

Read the full article at:

http://www.commondreams.org/view/2011/09/09-4

Note: Under the Obama administration proposal a whooping 240 billion dollars will be taken out of general tax revenues in 2012 to fund Social Security! That's huge and will increase calls to cut Social Security benefits in order to reduce government deficits. Opponents of Social Security will claim that this "entitlement" contributes to the governments deficit and will have 240 billion in government spending to prove their claim! BBI


-------------------------------------------



Obama’s Speech Inspiring and Annoying
By Matthew Rothschild
Editor of The Progressive
September 8, 2011

The payroll tax cut that Obama proposes for individuals is actually pretty regressive. The top 5 percent of taxpayers (those earning, on average, about $550,000) will rake in almost $1,300 while those in the lower 60 percent (those making about $28,750) will take home only about $150, according to a new report by Citizens for Tax Justice.

Not only is that unprogressive. It’s also a poor way to stimulate the economy. Tax cuts “targeted towards low- and middle-income people would be most effective,” says the group, because they are the ones most likely to spend the money the fastest.

Giving companies a payroll tax holiday is even worse, as the progressive labor coalition Strengthen Social Security points out.

“Corporations are already sitting on substantial cash reserves; an employer payroll tax cut will increase these cash holdings without any guarantee of additional hiring,” the group notes. “Corporations were sitting on $1.9 trillion in liquid assets during the first quarter of 2011 (the most current data), the largest such sum ever recorded. Moreover, they made a record $3.8 trillion in profits in the second quarter of 2011. Most companies are not using their cash to hire new employees now. A tax cut will just fatten their bottom line.”

Read the full article at:

http://www.progressive.org/obama_jobs_speech.html


------------------------------------------



Social Security Payroll Tax Cuts = Poor Economics, Poor Policy, and Poor Politics

The 2 percentage point payroll tax “holiday” for employees that was enacted last year is scheduled to expire at the end of December 2011. President Obama reportedly plans to ask Congress to renew it and to provide a similar tax cut to employers. It was unwise last year to substitute the employee tax cut for the expiring Making Work Pay Tax Credit. Extending this policy by reducing the employer Social Security contribution is even worse.

Companies are not hiring because consumers are not buying.

Consumers, many of whom have lost income and assets since 2008, do not have enough money to purchase what companies are capable of producing. No matter how big the tax breaks, companies are unlikely to hire until more people buy. Workers need work; corporations do not need another tax break. As the bipartisan Tax Policy Center recently noted: “This also promises to be a boondoggle. We don’t know what the tax cut would be, but let’s say it would reduce the employer share by half, or about 3 percent. That comes out to an average tax cut of about $1,200 for each new employee. Would a company hire a new worker for, say, $38,800 instead of $40,000? Most wouldn’t. At this point in the business cycle, firms hire when they need workers to fill orders, not to get a relatively small tax break.

There are much better ways to stimulate the economy than a payroll tax cut.

Economist Dean Baker has commented that the argument that an employer payroll tax cut will lead to significant hiring “does not pass the laugh test.” According to Moody’s Analytics, an employer payroll tax cut generates $1.24 in economic activity for every dollar spent, which is much lower than other spending measures. For example, extending unemployment insurance benefits generates $1.61 for every dollar spent, a temporary increase in food stamps creates $1.74 in economic activity, and providing general aid to struggling state governments generates $1.41.

Even if a tax cut is the only incentive that can be approved by Congress, there is no reason to tie it to Social Security.

Employers would receive the same boost from a refundable tax credit paid from the general fund as they will get from a payroll tax cut. And Social Security benefits will not be put at risk by diverting payroll taxes from the Social Security Trust Fund.

Read the full article at:

http://strengthensocialsecurity.org/social-security-payroll-tax-cuts-poor-economics-poor-policy-and-poor-politics

[Name removed]

1. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Better Believe It]

2. White House Proposal to Exempt Employers from Paying For Social Security Would Hurt Workers/Families

We Were Warned Last June. BBI

FOR IMMEDIATE RELEASE
June 10, 2011
1:58 PM
CONTACT: Strengthen Social Security Campaign

Don Owens, [phone] [e-mail]
Josh Rosenblum, [phone] [e-mail]

White House Proposal to Exempt Employers from Paying For Social Security Would Hurt Workers and their Families

WASHINGTON - June 10 - White House advisors are reportedly considering relieving employers from their obligation to contribute to Social Security. This proposal, if enacted, would eliminate billions of dollars of revenue dedicated to Social Security at a time when some members of Congress argue that Social Security’s benefits should be cut because the program may have insufficient revenue after 2036.

Nancy Altman, Co-Director of Social Security Works issued the following statement on the Administration’s idea:

“That the White House would even consider cutting Social Security’s funding is enormously alarming. It indicates that the White House does not take seriously the dedicated nature of worker and employer contributions to Social Security. Those contributions belong to American workers and their families. Social Security should not be treated as a piggybank or raided by politicians in Washington.

“The supposed reason for the proposal is to further stimulate the economy, but there are a number of more efficient and effective ways to do so. Those other measures would boost the economy more without giving ammunition to those who want to cut or even privatize Social Security.

“Even if the lost income were made up from general revenue, great harm would be done. If the proposal became law, those arguing to cut Social Security’s benefits would then point out that Social Security has a huge shortfall and is contributing to the deficit, and so must be cut.

Social Security provides vital economic security to millions of seniors, women, people with disabilities, children, families of soldiers killed in Iraq and Afghanistan, and others. The government should do all it can to spur job growth, but not at the expense of Social Security.”

###

The Strengthen Social Security Campaign is comprised of more than 300 national and state organizations representing more than 50 million Americans from many of the nation’s leading aging, labor, disability, women’s, children, consumer, civil rights and equality organizations.

http://www.commondreams.org/newswire/2011/06/10-6


-----------------------------------------------



THE NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY & MEDICARE
~ Trusted ~ Independent ~ Effective ~

December 10, 2010

NEWS RELEASE
Social Security Experts Detail Why Payroll Tax “Holiday” is No
Gift to Americans

Briefing reporters today, National Committee President Barbara Kennelly, Social Security Works Co-Director Nancy Altman and CEPR Co-Director Dean Baker warned that passage of a payroll tax holiday could have devastating effects on Social Security’s long-term financing.

“As we’ve seen in Washington these days, it’s easy to enact tax cuts but virtually impossible to allow them to expire. This payroll tax holiday proposal will be no different. Election year politics in 2012 will doom the repeal of this $120 billion dollar cut and Social Security beneficiaries will then pay the price. The American people understand we’re in an economic crisis yet they don’t want to trade their future security for a short-term benefit. They didn’t ask Congress to cut their Social Security contributions, in fact, poll after poll shows they’d pay more to preserve Social Security. I salute the House for saying we need to give this deal another look because this payroll tax provision is no deal at all.”…Barbara B. Kennelly, President/CEO National Committee to Preserve Social Security and Medicare

Conservatives have long dreamed of a payroll tax holiday because it fulfills two ideological goals, lower taxes and weakening Social Security’s finances. Worker contributions have successfully funded the program for 75 years and that critical linkage between contributions and benefits is what keeps Social Security a self-funded program. Proposals like this threaten the program’s independence, forcing Social Security to compete for limited federal dollars. If made permanent, this payroll tax cut would then double Social Security’s 75 year projected shortfall.

"While the payroll tax cut is sure to be a welcome increase of income for workers, it is also likely to deepen the public’s distrust of Congress and the President, and reinforce the belief held by much of the public that Congress is raiding Social Security. Past Congresses have worked hard to maintain a wall between Social Security’s funds, which, by law, must be used only for Social Security, and the government’s general fund, which can be used for any purpose, limited only by the Constitution. The proposal, if enacted, will reinforce the public perception that Congress is cavalier with their contributions, intermingling them at will and substituting general revenue for dedicated workers’ contributions -- because that is just what the proposal does. " Nancy Altman, Social Security Works Co-Director

We agree there is a need for more stimulus; however, this payroll tax holiday isn’t the most effective way to provide that economic boost. According to The Center for Budget and Policy Priorities, extending the “Making Work Pay Tax Credit” is a much better and targeted stimulus.

“If the point is to provide a boost to the economy the quickest, fairest, and most effective way would be to simply extend and expand the Make Work Pay tax credit. This has about 10 percent more bang per buck than the payroll tax holiday and would go to all workers, including the state and local government employees not covered by Social Security."…Dean Baker, Co-Director Center for Economic and Policy Research

The National Committee’s Policy Review of the Payroll Tax “Holiday” has been post on our website at: http://www.ncpssm.org/news/archive/payroll_tax_holiday / .

###
The National Committee, a nonprofit, nonpartisan organization acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the Board of Directors and professional staff. The work of the National Committee is directed toward developing better-informed citizens and voters.

http://www.ncpssm.org/news/archive/payroll_tax_holiday_press_release/

[femrap]

3. Cutting the SS

pay-in is sooooooooo short sighted. People need to set aside $$$ for their retirement...it's insurance against something bad happening to people during their working lives.

Makes no sense....well, unless Obama wants to Kill SS...then it makes sense.

WASF.

[ProSense]

4. Dean Baker calls this claim "untrue"

Dean Baker: The Payroll Tax Cut Did Not Cost Security Revenue

The NYT wrongly told readers that the payroll tax cut cost Social Security, "resulted in $67.2 billion of lost revenue for Social Security in 2011." This is not true. The tax cut was fully offset by money from general revenue so that the trust fund was unaffected by the tax cut.

That lie has been flying from every corner!

Expect the media to begin their typical distortions in favor of the GOP. It's the only way they can make this a "fair and balanced" fight!

[kelly1mm]

6. While your point is true, the trust fund is being replenished by general

fund revenue, this does mean that we can no longer say that SS does not add 'one dime' to the deficit / national debt. Since 40% of the general fund is borrowed, 40% of those general fund payments to SS are borrowed.

[Donnachaidh]

25. and in doing so, is breaking down the safety barriers of SS by commingling funds

For a later attack of SS.

Obama has been after SS from day one. And now he's using an emergency situation to fulfill his campaign promises to get SS.

There's nothing good about this move at all. It's underhanded.

[brentspeak]

7. Dean Baker: 'The Payroll Tax Cut: A Stimulus That Progressives Should Oppose'

http://yubanet.com/opinions/Dean-Baker-The-Payroll-Tax-Cut-A-Stimulus-That-Progressives-Should-Oppose.php

[Better Believe It]

8. Thanks for the link. I hadn't read Baker's article.

[chill_wind]

31. Thank you. His bottom line:

For this reason there should be no deal on a stimulus that involves a payroll tax cut. If the Republicans are attached to giving an amount equal to 2 percent of wages to workers then this could be done under another name. We can call it a refundable income tax rebate or anything else that people like. The only reason to call it a payroll tax cut is if the intention is to use this as a foot in the door for attacking Social Security.

bold emphasis mine.

Pelosi says she backs this, despite opposition in her own caucus, because it's what Obama wants. Objections are off the table.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1910058

[Major Hogwash]

21. The offsetting of the costs for the payroll tax cut gets little attention here at the DU.

They don't want to hear it, so they plug their ears and run around saying "lalalalala" all the frickin' time.

[jtown1123]

48. HOw long can Social Security compete for limited federal dollars? This opens it up for cuts, sorry.

[Better Believe It]

5. Senator Sanders: "a payroll tax holiday is a backdoor method to end up breaking Social Security"

From last December. BBI

Remarks of Senator Bernie Sander's during his Senate "filibuster" speech.

Congressional Record: December 10, 2010 (Senate)
Page S8735-S8781
From the Congressional Record Online via GPO Access wais.access.gpo.gov
DOCID:cr10de10-20

While this idea of lowering the payroll tax sounds like a good idea,
in truth, it really is not a good idea. This idea originated from very
conservative Republicans whose intention from the beginning was to
destroy Social Security by choking off the funds that go to it. This is
not just Bernie Sanders' analysis. There was recently--I distributed it
recently at a meeting we held--a news release that came from the
National Committee to Preserve Social Security and Medicare. The
headline on that press release is ``Cutting Contributions to Social
Security Signals the Beginning of the End. Payroll Tax Holiday is
Anything But.'' What the National Committee to Preserve Social Security
and Medicare, which is one of the largest senior groups in America,
well understands is that there are people out there who want to destroy
Social Security. And one way to do that is to divert funds into the
Social Security trust fund and they don't get there.

What the President and others have said is not to worry, this is just
a 1-year program--just 1 year. In fact, they say, the General Treasury
will pay the difference. So the Social Security trust fund is not going
to lose funding.

The reason we have a $2.6 trillion surplus today in Social Security
and the reason Social Security is good for the next 29 years to pay out
all benefits is because it comes from the payroll tax. It is not
dependent upon the whims of the Congress and the Treasury.

The President and Republicans said: This is just a 1-year program.
Don't worry.

I do worry. I worry that once we establish this 1-year payroll tax
holiday, next year our Republican friends will say: Do you want to end
that? You are going to be raising taxes on workers. And enough people
will support that concept, and this 1-year payroll tax holiday will
become permanent. And when we do that, we will be choking off, over a
period of years, trillions of dollars that we need to make sure Social
Security is viable and is there for our children and grandchildren.

But don't listen to me. Listen to somebody who knows a lot more about
this issue than I do. Barbara Kennelly is a former Congresswoman from
Connecticut. She is the president and CEO of the National Committee to
Preserve Social Security and Medicare. This is what Barbara Kennelly
says:

Even though Social Security contributed nothing to the
current economic crisis, it has been bartered in a deal that
provides deficit busting tax cuts for the wealthy. Diverting
$120 billion in Social Security contributions for a so-called
tax holiday may sound like a good deal for workers now, but
it is bad business for a program that a majority of middle
class seniors will rely upon in the future.

The headline is ``Cutting Contributions to Social Security Signals
the Beginning of the End.''

This is not a good approach. Providing and figuring out a way that we
can get more money into the hands of working people, as we did in the
stimulus package, does make a lot of sense. Going forward with a
payroll tax holiday is a backdoor method to end up breaking Social
Security. It is not anything we should support.

Let me mention a quote from a gentleman who understands this issue
very well. He understands the politics of what is going on here. His
name Bruce Bartlett, former adviser for Presidents Reagan and George
H.W. Bush. He recently wrote the following in opposition to this
payroll tax cut. This is what Mr. Bartlett wrote:

What are the odds that Republicans will ever allow this
one-year tax holiday to expire? They wrote the Bush tax cuts
with explicit expiration dates and then when it came time for
the law they wrote to take effect exactly as they wrote it,
they said any failure to extend them permanently would
constitute the biggest tax increase in history. . . . if
allowing the Bush tax cuts to expire is the biggest tax
increase in history, one that Republicans claim would
decimate a still-fragile economy, then surely expiration of a
payroll tax holiday would also constitute a massive tax
increase on the working people of America. Republicans would
prefer to destroy Social Security's finances or permanently
fund it with general revenues--

Switch the revenue base from the payroll tax to general revenues--
than allow a once-suspended payroll tax to be reimposed. Arch
Social Security hater Peter Ferrara once told me that funding
it with general revenues was part of his plan to destroy it
by converting Social Security into a welfare program, rather
than an earned benefit. He was right.

In other words, what this issue is about is breaking the bonds we
have had since the inception of Social Security where Social Security
was paid for by workers. You pay for it when you are working, and you
get the benefits when you are old. That is the deal. There is no
Federal money coming in from the General Treasury.

This gentleman, Mr. Bartlett, former adviser to Presidents Reagan and
George H.W. Bush, thinks--and I suspect he is quite right--this is the
beginning of an effort to destroy Social Security.

The real debate about Social Security is not one about finances.

There has been a lot of misinformation and disinformation out there.
I hear from some of my friends on the Republican side that Social
Security is going bankrupt; it is not going to be there for our kids.
That is absolutely not true. Social Security today has a $2.6 trillion
surplus. Social Security can pay out every benefit owed to every
eligible American, if we do not start diverting funds, for the next 29
years, at which point it pays out about 78 percent of benefits. So our
challenge in 29 years is to fill that 22-percent gap. That it is. Can
we do it? Sure we can.

President Obama, when he was campaigning, and I think he has repeated
since, the very good suggestion that instead of having a cap in terms
of which people contribute into the fund at $106,000, what we should do
is do a bubble, and people who make $250,000 or more should contribute
into the Social Security trust fund. If you did that and nothing else,
you have essentially solved the Social Security problem for the next 75
years. Very easy. It is done.

So what this payroll tax holiday is doing, in my view, is pretty
dangerous. I do not think enough people understand that. I think that
is one of the strong reasons this agreement should be opposed.


-------------------------------------------

I couldn't find the link to his speech so here's the link to the original post. Remarks made by Senators on the Senate floor are not copyrighted material. Bold in text is my emphasis. BBI

[Bluebear]

9. Recommend

[Bluebear]

40. .

[sad sally]

13. Last night on Countdown, Senator Sanders added this:

SANDERS: I think probably not. Give you one example, Keith. I mean, when you have 16 percent of our people unemployed, when the American Society of Civil Engineers tells us we need to spend over $2 trillion in the next five years to start rebuilding our infrastructure, I think what the president is talking about is a very, very, small part of what we need to do. Furthermore, and I think I'm going to be in a minority on this one. You know, when the president says, "Hey, Keith, the good news. Your taxes are being cut. You're going to get another $1,000-$1,500 next year. Good news, right?" Do you know where that money is coming from? That money is coming from the payroll tax. That is money that otherwise would have gone into the Social Security trust fund. And I've got a problem, I have a real problem when Social Security is under the kinds of attacks that we're seeing right now. Do you really want to divert tens and tens of billions of dollars away from the Social Security trust fund? I have a real problem with that.

OLBERMANN: And, it seems like that's being drawn into reverse. It seems like the subject of regulations was being thrown into reverse, that there was -- the president was still playing inside Republican defined goal posts.

SANDERS: I think that's right. I think if you -- above and beyond the fact that I'm not enthusiastic about diverting tens of billions away from the Social Security trust fund. As I understand it, about two-thirds of his proposal is based on tax breaks. I think you got a lot better bang for your buck, you create a lot more jobs when you're talking about investing in roads, bridges, rail, when you are investing in education. I think that's how you create the jobs -- energy transformation, rebuilding and retransforming our energy system is the way you create jobs. When two-thirds, two out of every three dollars in this program is for tax breaks, you know, I think we can do better than that.

http://current.com/shows/countdown/videos/sanders-ellison-grijalva-on-obama-speechs?du

[Better Believe It]

14. We can do better than that indeed.

[Bluebear]

16. Kick

[LWolf]

42. +1,000,000

[Little Star]

10. k&r

[Autumn]

11. K/R

:kick:

[leftstreet]

12. K&R

[kentuck]

15. Someone must ask the question?

Is his aim to kill Social Security??

[Enthusiast]

17. Primary his ass!

He is do Democrat!

[JVS]

18. I'm pissed that my employer gets the money back but I don't see any of it!

I'm the one earning the fucking money!

[Raine]

19. K&R

:kick: :thumbsup:

[Major Hogwash]

20. So, it's a bad idea for people to get their money now rather than wait until they retire to get it?

Sounds like someone needs to take a basic economics class, if you ask me.

[democracy1st]

24. you sound like a republican!

[Major Hogwash]

29. Yeah, me and President Obama sound like Republicans, huh? Hold that thought.

As long as you can.

:rofl:

[democracy1st]

33. either a republican or a dumba..,maybe both!

[Fuddnik]

35. Pretty obvious on both counts.

No need to hold the thought.

Case closed.

[Bluebear]

46. Recommended

[ibegurpard]

26. so you're ok with doing away with social security

just so we know what we're talking about here...

[Johnny Noshoes]

27. When I HAD a job

When I HAD job that little pittance of a tax cut maybe gave me an extra 20-25 dollars a MONTH - I think it might have been even less. I live in NYC - no possibility of moving at least in the short term - 20 something dollars extra amounts to jack friggin squat. I made pretty decent money and I would be willing to bet that even people who made a lot less than me and live in less expensive places to live got so little from the tax break that it was a joke. Yeah its extra money sure but it isn't gonna boost the economy like infrastructure projects. You get construction workers real jobs they then have real money to spend and it spreads through the economy and with any luck folks like me might actually get work again - would be nice.

[sulphurdunn]

39. That someone would be you.

Do you actually know anything about how the SS System operates? Do you know why payroll taxes are deducted from wages? Have you ever even had a job? :crazy:

[Occulus]

53. Apt username is apt.

[Marr]

56. Jesus.

I don't even know what to say. You might as well just start arguing that we need to cut taxes on the rich and deregulate our way to prosperity. And I'm sure you will, once Obama says it's the 'adult' thing to do.

[Major Hogwash]

61. Back that up with a link since you shot your big fucking mouth off here today.

Let's see if you can find a link to where President Obama ever said anything near to that!!

[Marr]

62. What are you babbling about now?

If you'll notice, I said "when". In english, we often use that word to signify that the event cited has not yet occurred.

[Major Hogwash]

66. I knew you couldn't!!

The day's coming.

[Claudia Jones]

67. that is the Republican position

Can that possibly be denied? You are using a Republican talking point to describe the position of the administration, yet questioning the validity of the opposition to it.

[mfcorey1]

22. More brainwashing in this than color in a rainbow!

[Bluebear]

23. As if you read it

[Bluebear]

43. And what does that mean anyhow? Lol

[Name removed]

28. Deleted message

Message removed by moderator. Click here to review the message board rules.

[mother earth]

30. Nothing progressive about this deliberate act to weaken SS.

I do not accept this as a legitimate measure to help the middle class or any US citizen in general. This is another way to break SS, when we should strengthen and safeguard SS. This is indeed class warfare and a measure designed to hasten the demise of one of our greatest protections. Shame on ANY democrat who would implement this. This is another incredible lightbulb moment that tells us our gov't is broken and no longer represents us.

[Bluebear]

44. Indeed

[Yo_Mama]

50. Nor do I

It's a bad measure and it does not help the working class, which will be up the creek without a paddle without SS.

Now's the time to STRENGTHEN SS rather than dismantle it.

[newportdadde]

32. Many of us on DU raised a red flag on this back during the first deal.

By tying SS to the general fund which is being used to make up the shortfall of the reduced payroll tax we have now firmly hooked the general fund and SS together. It was the first strike during the 2010, now we are hearing of a further reduction and even better bringing in employers on the deal. If you get employers in there then you will never ever see this repealed.

I do not see how the president or anyone on DU in favor of this for that matter can support this idea with a straight face. The continuing meme is how SS is going to 'go broke' etc... so the fix is to.. change its method of revenue and tie it to the general fund. Makes sense to me!

The problem really is that Wall Street desperately needs this money. It got your pension money as we transitioned to the wonderful 401k, now it needs more, it always needs more. So undercut SS, slowly make everyone hate it and someday you will get that money someday.

You aren't going to tax cut your way out of the problem, honestly if you want to really fix this economy your going to have to do something radical, like tariffs, outlawing H1Bs, passing laws that say if X amount of a companies product is manufactured overseas you are no longer incorporated here etc.

[russspeakeasy]

38. Many of us have raised 100 flags... That's one for each time

his policies and proposals have been dictated by the repigs...:evilfrown: :puke:

[Bluebear]

41. +

[xchrom]

34. Recommend

[Faryn Balyncd]

36. Who could have imagined he would govern in this fashion?

:kick:

[Starry Messenger]

37. k&r

[Bluebear]

45. Kick

[Brickbat]

47. Can't R it so I'll K it.

[joeglow3]

49. I think it is a good idea. Of course, I am not a conspiracy theorist

Every single dollar earned is taxed (up to slightly more than $100,000). By structuring a tax cut this way, Obama is ensuring those who need tax cuts the most (those not paying income taxes) are getting one. He is also ensuring millionaires and billionaires are not getting obscene tax cuts (most is about $3,000). This, as it is structured, is an extremely regressive tax CUT. He then pulls this off by funding the trust fund with dollars from general fund. In short, he is being VERY creative in using the SS tax to benefit those needing it the most, while not impacting SS at all. It would be flat out impossible to accomplish this through general income tax rates.

However, instead of objectively looking at what the cut accomplishes, some people HAVE to bitch and whine and will find any conspiracy theory available to tear down our president.

[jtown1123]

52. An extra $1500 or so a year I will not notice. I will notice my future SS benefits being cut n/t

[Better Believe It]

55. $1,500 is the most one can receive in tax cuts. Most will get far less.

[jtown1123]

57. Exactly. It's too small of amount. Plus it's for pple who are already employed. n/t

[joeglow3]

59. You can't have it both ways

People say social security is 100% solvent because the IOU's from the general fund are rock solid. Using that logic, these cuts are funded from the general fund, so the same logic must apply. Thus, it is merely being used as a mechanism to ensure the tax cut is not weighted heavily to the rich. Regardless of how the cut is administered (through your income tax return or payroll withholdings) the ultimate funding is coming from the general fund.

Now, if your argument is that it compromises social security in the future, then you MUST also apply that logic to social security as a whole and say it is already bankrupt, as the IOU's are worthless.

[Selatius]

64. The SS Trust Fund is comprised of special US Treasury government bonds, not IOUs from the Gen. Fund.

The money Social Security collects comes from the SS payroll tax. Money from that payroll tax goes into the Social Security Trust Fund, a separate entity from the General Fund. The Trust Fund is entirely comprised of special government bonds issued by the Treasury and not the US Congress.

Money for the General Fund is largely derived from the income tax, which is a separate source of funding that had no relationship with Social Security. FDR established that Social Security should be funded by payroll taxes instead of regular income taxes because he feared if Social Security were dependent upon the General Fund that Republicans would use the excuse that it drives up General Fund deficits and that it should be cut or dismantled.

The logic does not follow, in my opinion, because the SS Trust Fund and the General Fund are two separate entities by law and are also funded from two entirely different sources, one from payroll taxes and the other from income taxes.

[Claudia Jones]

68. false and misleading

You are promoting the right wing view of SS here, which damages rather than strengthens your argument since the right wing has always wanted to destroy SS.

"IOUs" is a right wing talking point. The SS fund and the general fund are not the same thing, as you claim. If US treasury bonds are not secure nothing is. On the other hand, general fund decisions are subject to the transient whims of Congress and tying SS to the general fund strategically strengthens the right wing position as SS can be portrayed as contributing to the deficit and the debt.

[NorthCarolina]

51. So, making Social Security dependent on the general fund for the first time

appears to be a key element of Obama's plan to 'save' Social Security. Congress will then be able to attack it as a part of deficit reduction legislation. What a plan.

[jtown1123]

58. Second time. Obama pushed for this in 2010 and swore up and down it would only be for 1 yr.

[NorthCarolina]

60. Maybe he meant only 1 year at the initial rate. This time the cut is deeper, and

includes a cut in the rate to the employer as well.

[Broderick]

54. More trickle down stimulus.

[kentuck]

63. And the last point is the one that gets me...

"Even if a tax cut is the only incentive that can be approved by Congress, there is no reason to tie it to Social Security."

"Employers would receive the same boost from a refundable tax credit paid from the general fund as they will get from a payroll tax cut. And Social Security benefits will not be put at risk by diverting payroll taxes from the Social Security Trust Fund."


Why??

[woo me with science]

65. ...