Some see danger in changing Social Security's funding proposed by President Obama

[Better Believe It]

Some see danger in changing Social Security’s funding
Obama pitches idea of lowering payroll tax rate to 3.1 percent but there's bipartisan skepticism
By Tom Curry
National affairs writer, MSNBC
October 18, 2011

Another Social Security tax cut, intended to spark the sluggish economy, seems to be in the works. But the short-term boost for workers could create even more problems for a giant entitlement program already facing a long-term financing shortfall.

The tax cut would cause a $289 billion loss in Social Security revenues, which would be replaced by general tax revenue funds transferred from the Treasury.

Charles Blahous, a senior fellow at the Mercatus Center, a free market-oriented think tank at George Mason University, said members of Congress have not adequately debated the merits of this proposal. “Only two things can happen, either Social Security goes insolvent earlier, or we continue funding the program with general revenues, undermining the basis of Social Security’s longstanding bipartisan support — the idea that it’s not welfare, but a benefit earned by worker tax contributions.”

Sen. Joe Manchin, D-W.V., who is up for re-election next year, also opposes the payroll tax cut arguing that the revenue loss "hits Social Security right smack in the eye."

Read the full article at:

http://www.msnbc.msn.com/id/44938646/ns/politics/


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Press Releases

62 House Democrats Urge President Obama to Protect Social Security Revenues, Reject Another Payroll Tax Cut

Washington, Jul 21 - Today, Reps. Ted Deutch (FL-19), Lloyd Doggett (TX-25), and Mark Critz (PA-12) were joined by fifty-nine of their Democratic colleagues on a letter to President Barack Obama urging him to reject another payroll tax cut and instead consider alternative proposals that do not jeopardize Social Security’s time-tested independent revenue stream. The bipartisan tax compromise passed last winter set a dangerous precedent by reducing employee contributions to Social Security and replenishing the Trust Fund with deficit spending from the general fund. Social Security was established with a dedicated revenue source to prohibit it from contributing to the budget deficit and to protect the retirement security of America’s workers from politically motivated budgetary attacks.

“We remain gravely concerned that yet another, unacceptable cut to Social Security’s revenue stream appears to be on the table,” the members write to the President. “Enemies of Social Security reject valid proposals to give the same level of tax relief to the same Americans or American businesses without using the Social Security revenue stream and resultant general fund transfers… We are greatly concerned that a permanent extension of the 2011 payroll tax cut would double Social Security’s long-range shortfall and make long-term solutions nearly impossible.”

Joining Reps. Deutch, Doggett, and Critz on the letter are Reps. Joe Baca (CA-43), Robert Brady (PA-01), Corrine Brown (FL-03), Andre Carson (IN-07), Judy Chu (CA-32), Hansen Clarke (MI-13), Yvette Clarke (NY-11), William Lacy Clay (MO-01), Steve Cohen (TN-09), John Conyers (MI-14), Rep. Elijah Cummings (MD-07), Danny Davis (IL-07), Peter DeFazio (OR-04), Rosa DeLauro (CT-03), Mike Doyle (PA-14), Donna Edwards (MD-04), Keith Ellison (MN-05), Sam Farr (CA-17), Bob Filner (CA-51), Barney Frank (MA-04), Marcia Fudge (OH-11), John Garamendi (CA-10), Gene Green (TX-29), Raúl Grijalva (AZ-07), Luis Gutierrez (IL-04), Alcee Hastings (FL-23), Maurice Hinchey (NY-22), Rush Holt (NJ-12), Jesse Jackson, JR. (IL-02), Marcy Kaptur (OH-09), Dennis Kucinich (OH-10), Rick Larsen (WA-02), Barbara Lee (CA-09), John Lewis (GA-05), Carolyn Maloney (NY-14), Edward Markey (MA-07), Jim McDermott (WA-07), Jim McGovern (MA-03), Mike Michaud (ME-02), George Miller (CA-07), Gwen Moore (WI-04), Jerrold Nadler (NY-28), Grace Napolitano (CA-32), John Olver (MA-01), Donald Payne (NJ-10), Chellie Pingree (ME-01), Bobby Rush (IL-01), Tim Ryan (OH-17), Gregorio Sablan (MP-AL), Louise Slaughter (NY-28), Betty Sutton (OH-13), Bennie Thompson (MS-02), Paul Tonko (NY-21), Pete Visclosky (IN-01), Maxine Waters (CA-35), Peter Welch (VT-AL), Frederica Wilson (FL-17), Lynn Woolsey (CA-06), and David Wu (OR-01).

http://deutch.house.gov/News/DocumentSingle.aspx?DocumentID=253160

Read the full text of the letter to President Obama signed by the 62 House Democrats at:

http://teddeutch.house.gov/UploadedFiles/Deutch_Doggett_Critz_Payroll_Tax_Cut_Letter_07-21-11.pdf


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Here's what the White House said a year ago regarding the Social Security Payroll Tax Cut Obama proposed in 2010. BBI

• "The tax cut is temporary.

This is a one-year, temporary tax break intended to help working
families in these tough economic times and to help generate growth and jobs. After the
temporary provision expires, payroll tax rates will return to what they were before. It would
require an act of Congress signed by the President to change this automatic expiration."

http://www.whitehouse.gov/sites/default/files/social_security_payroll_taxes.pdf

[L0oniX]

1. Meanwhile these asscarrots will vote themselves in another raise.

[polichick]

2. To me it looks like a problem too - screw the tax cuts; there have been enough.

[truedelphi]

10. Geithner and Rand Paul are already flirting with each other in

Agreement on the need to keep the tax cuts for the rich at the "proper point for growth of the economy."

Though they don't use the term "tax cuts for the rich." They use expressions like "level playing field, ending loop holes, and maximizing contributers."

[polichick]

15. imo the prez should let Geithner go ahead of schedule - might help him get reelected.

[truedelphi]

18. No President can fire the person that they agreed to work for. n/t

[polichick]

21. So you think Geithner was part of the package from the beginning...

...the "powers-that-be" chose both Geithner and Obama?

[truedelphi]

22. That's my take on it.

Of course, neither Obama or Geithner have ever confided in me.

But I had this feeling during October 2008 that Obama was either at that point in time being confronted with having to sign on fully to what the Powers that Be wanted, and their deal included being obligated to the MIC and Kissinger, Geithner and Monsanto interests, or else he was about to be confronted with that.

And he opted to let his controllers control him.

A person doesn't have to let the controllers control them. Witness the following conversation:

George Seldes, who was a Chicago Tribune correspondant during the late Nineteen teens and up until 1929, relates the following conversation that he had with Dorothy Thompson -another news reporter and the wife of Sinclair Lewis:

Thompson told Seldes that in 1935, while en route by ocean liner from France to NYC, how Harry F. Sinclair, a Big Money Guy, took her away from the table where they were eating to talk with her privately.

"See those folks at the table who were eating with us?" Harry F Sinclair asks Thompson?

"Yes," answers Dorothy.

"Well, all of us are the ones who decide who gets nominated to run for the Presidency and who gets to win that office."

Among those he meant was an important associate of the Giannini family, who established Bank of America.

"We give money on both sides of the aisle, so that no matter what, one of our people is always in a place to do our bidding."

"What about FDR?" asked Dorothy.

"Our support for him was a major misjudgement on our part. We saw to it that he had money and of course, we fully expected for him to say the sort of things that he always said. We just didn't expect him to act on those statements."

Harry F. Sinclair went on to state that the Inner Circle of Power Brokers was attempting to raise some five to twenty million to defeat FDR in 1936.

But the voting machinery was still non-hackable back in that era. And FDR had millions upon millions of everyday people to vote him back in.

[polichick]

23. Great story! That would explain the difference between what Obama said campaigning in 2008...

...and who he chose for his administration. That was shocking to watch and I haven't trusted him since.

imo it's telling that neither party has worked toward uniform and verifiable voting for this "democracy."

[sad sally]

3. An extension of this reduction of contributions to the SS trust fund

guarantees the fund contributes to the deficit - a sure way for either the current or next President (and congress) to declare it must be on the chopping block to reduce the deficit and national debt.
####

Altman says these cuts would not be a big deal if they were temporary, but she believes they’ll stick around. “Congress has been reluctant to increase marginal tax rates by a modest amount on the very wealthiest Americans; it’s hard to believe they would be eager to allow Social Security contributions to double on the lowest-income, working Americans,” she said.

And that's a problem. The losses to the Social Security fund from payroll tax cuts passed in December has been offset by general fund revenues, and presumably (should Republicans end their opposition to this tax cut) any expansion or extension of the cuts would be done the same way. There's potential danger in that financing solution for Social Security, and it is pretty huge:

If the government must dip into general revenues permanently to make the trust funds whole, then Social Security will contribute to the deficit, and may be in jeopardy, since the government has to borrow money to cover its debt. Right now Social Security does not contribute to the deficit, a point the president himself has made. “Too many Americans believe that their elected representatives have been stealing from Social Security,” said Altman. “This reinforces that perception. These are pension funds, not general taxes, and should not be cut to stimulate the economy or used for any purpose other than Social Security.”

http://www.dailykos.com/story/2011/09/12/1016277/-Rethinking-the-payroll-tax-cut-forstimulu?du

[Angry Dragon]

4. I thought it was a stupid idea the first time he came out with it

and a stupid idea when he came out with it again
and I was told I was way off base.

I saw it as opening the door to play around with SS
even more.

[Hydra]

5. You weren't off base

The problem here is the "What if Bush did it?" test. It's not being used by many who support Obama.

What if Bush said we needed a payroll tax cut and Medicare "adjustments"? I'm sure the roar in here would have been deafening and unanimous if Bush were still office.

[JoeyT]

6. It's asked of them often enough.

The responses are usually "You never loved him anyway!" "I trust him, why don't you?!" or "Three dimensional chess!".

[Hydra]

7. Oh, I know

I do it and hear that response. I meant that those people aren't asking themselves that question.

It's sad, really, to see such a lack of principles in our ranks.

[sad sally]

8. Wait until the "trigger" happens and the cuts to Medicare start.

Plus all the other non-defense cuts - and we know defense won't be touched.

[Better Believe It]

13. So you didn't get a pony? Under the bus with you!

[leftstreet]

9. K&R

[Poll_Blind]

11. Representative Peter DeFazio predicted this would happen 10 months ago:

From this DU post, http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x28239">Congressman DeFazio: The tax deal "is a raw deal for seniors, taxpayers and working men and women" from December 17, 2010:

"At the end of 2011, the Republicans will insist on extending the payroll tax holiday because the expiration of the holiday would increase taxes on working people. And to pay for the extension, it’s likely they will demand cuts in Social Security benefits.

That’s not the kind of security the American people who are dependent upon Social Security, or who will be dependent upon Social Security, need. This is a raw deal for seniors, taxpayers and working men and women. This bill sets a dangerous precedent and I will oppose it."

And that's exactly what's happening. Just replace the words "Republicans" with "Republicans and President Obama".

PB

[inna]

12. poison pill and the republican long-sought dream. as harmful as it gets, with no justifications.

damn, obama.

[Octafish]

14. The 1-percent Win.

Again.

[SidDithers]

16. Unrec...

keep trying.

Sid

[TBF]

19. Hmmmm...

Why is it that you would comment from Canada on a program that doesn't affect you?

[kentuck]

17. It's sad....

...that the only option left that might create a few jobs and bring the unemployment rate down just a little bit is the payroll taxes for Social Security. I think there are several naive people that think it will be paid back out of the general fund.

[TBF]

20. Obama will be remembered as the president who dismantled social security -

and he deserves it.