Tax Cut Deal A Hidden Threat To Social Security - HuffPo

[WillyT]

Tax Cut Deal A Hidden Threat To Social Security
Ryan Grim - Huffington Post
First Posted: 12- 8-10 03:42 PM | Updated: 12- 8-10 04:33 PM

<snip>

WASHINGTON - 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.

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.

<snip>

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

:kick:

[peacebird]

1. instead lets do away with the ceiling on SSI tax, make every dollar earned get taxed.

Now the tax ENDS at $108,600 - so lower income folks and middle income folks pay on 100% of their income, while wealthy get a free ride after earning 108,600.

Don't you think the that paying tax on 100% of the paycheck of doctors, lawyers, upper level managers and CEOs could help right the social security balance sheet? Without raising retirement or gutting the program benefits.

[WillyT]

3. I've Always Thought That Was A Great Idea !!!

:hi:

[ProSense]

2. Accounting for the Payroll Tax Cut

Accounting for the Payroll Tax Cut

by CalculatedRisk

Update: apparently this is settled and the trust fund will receive credits from the general fund - so there will no impact to Social Security.

There is no text for the plan available yet, and I've been trying to understand the accounting for the payroll tax cut and maybe this has already been settled ...

There are two obvious alternatives: 1) Social Security will receive something close to $120 billion less than currently estimated in 2011, and this will negatively impact the long term Social Security projections, and 2) the full amount of the payroll tax will still be credited to Social Security (as if there was no cut), and the 2% cut will come directly from the General Fund in 2011 - so this tax cut will have zero impact on long run Social Security projections.

Some people will say it doesn't matter - debt is debt - fine, if it doesn't matter, do it the 2nd way (debit the General Fund). I think it will matter for future debates.

[WillyT]

4. In This Particular Point In History... I Find The Term/Phase "Trust Fund"...

COMPLETELY WITHOUT MERIT !

You ???

:shrug:

[DURHAM D]

6. This is completely irrelevant and a redirection away from the core issue.

If you don't know anything about how SS actually works I suppose this could seem like it matters. But it doesn't.

[pokerfan]

5. And now they’re coming for your Social Security money...

There's a reason for this, there's a reason education sucks, and it's the same reason it will never ever ever be fixed. It's never going to get any better. Don't look for it. Be happy with what you've got... because the owners of this country don’t want that. I'm talking about the real owners now... the real owners. The big wealthy business interests that control things and make all the important decisions. Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought and paid for the Senate, the Congress, the state houses, the city halls. They got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying. Lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want. They don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests. That’s right. They don’t want people who are smart enough to sit around a kitchen table and think about how badly they’re getting fucked by a system that threw them overboard 30 fuckin’ years ago. They don’t want that. You know what they want? They want obedient workers. Obedient workers, people who are just smart enough to run the machines and do the paperwork. And just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it. And now they’re coming for your Social Security money. They want your fuckin' retirement money. They want it back so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later 'cause they own this fuckin' place. It’s a big club and you ain't in it. You and I are not in the big club. By the way, it’s the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table is tilted, folks. The game is rigged and nobody seems to notice. Nobody seems to care. Good, honest, hard-working people: white collar, blue collar, it doesn’t matter what color shirt you have on. Good, honest, hard-working people continue — these are people of modest means — continue to elect these rich cocksuckers who don’t give a fuck about them. They don’t give a fuck about you. They don’t give a fuck about you. They don’t care about you at all! At all! At all! And nobody seems to notice. Nobody seems to care. That’s what the owners count on. The fact that Americans will probably remain willfully ignorant of the big red, white and blue dick that’s being jammed up their assholes every day, because the owners of this country know the truth. It’s called the American Dream, 'cause you have to be asleep to believe it.

http://www.youtube.com/watch?v=Dpcd0woY2KY

[DURHAM D]

7. I read earlier today that it was actually Geithner who suggested this idea.

'nough said

I had incorrectly assumed this was McConnell's idea. He must of shit his pants with glee when the WH was so damn stupid as to offer this opportunity to take major steps toward destroying the program. Next year the WH will no doubt suggest extending the 2% employee reduction permanently and reducing the employer portion by 2%. Now we are talking real progress for the Catfood Commission. Then bingo - early retirement benefits will then need to kick in at 72 and full raised to 75. Then reduce Medicare contributions in 2012 by 2% (employee and employer) going forward and raise eligibility to 75. Both programs become bankrupt and useless.

The two greatest programs in the history of the world destroyed by one man. The Judas Goat and the Junior Judas Goats on his economic team. or maybe its just stupidity I don't know which is worse - making bad decisions out of ignorance or malice but the results are the same.