Letter to Congress on Social Security Payroll Tax Cut

* Please note that this letter is being sent to Representatives and Senators who are conferees on the Payroll Tax Cuts. A similar letter is being sent to all other Members of Congress.

January 20, 2011

Representative Xavier Becerra
1226 Longworth House Office Building
Washington , D.C. 20515

Dear Representative Becerra:

On behalf of the millions of members and supporters of the National Committee to Preserve

Social Security and Medicare, I am writing to express our opposition to extending the Social Security payroll tax cut beyond February 29, 2012, as is currently being considered by you and your colleagues on the conference committee on H. R. 3630.

The National Committee is deeply concerned about spending reductions in programs vital to older Americans that are being considered to offset the cost associated with an extension of the payroll tax cut. We are particularly troubled by the insistence of some lawmakers to use Medicare to help pay for the payroll tax cut. If cuts in benefits or increased cost sharing were to be made, Medicare beneficiaries would be required to help pay for a tax cut from which most of them would not benefit. The unfairness of such measures are, we believe, obvious.

The National Committee appreciates the importance of a strong and healthy economy in protecting the financial well-being of all Americans, young and old alike. While we agree that providing tax relief to middle class Americans is likely to help our economic recovery continue, we do not believe that extending or expanding cuts to Social Security's revenue stream is the best way to accomplish this goal.

As an alternative to extending the Social Security payroll tax cut, we suggest that the Congress consider extending the "Making Work Pay" tax credits, which we believe, along with the Center on Budget and Policy Priorities and the Center on Economic and Policy Research, would do more to boost the economy than extending or expanding the payroll tax cut. It is a less complex and more progressive method of stimulating the economy and does not threaten Social Security's integrity.

In fact, the payroll tax cut, coupled with legislation that substitutes the trust funds' lost revenue with general fund transfers, would leave Social Security increasingly dependent on both general revenue and the actions of Congress for its funding. Such a funding mechanism would be a dramatic and dangerous departure from relying on workers' contributions, which have so successfully funded the program since its enactment in 1935. Extending and expanding the payroll tax cut further endangers Social Security's financial integrity and could undermine our efforts to defend the program from benefit cuts or privatization.

Social Security is paid for, earned by, and promised to American workers. We call on all Members of Congress to reaffirm the fact that Social Security has been, is, and will continue to be, a self-financed insurance program. It should be made clear to the American people that temporary payroll tax cuts do not constitute a precedent that would erode this tried and true principle.

For these reasons, the National Committee opposes the extension of the payroll tax cut. However, if the Social Security payroll tax cut is extended, we urge that the American people be given guarantees that the payroll tax cut will not be extended again and that general funds will be automatically transferred to the Trust Fund to replace lost payroll tax revenue. We especially urge you to assure Americans that the extension of the payroll tax cut will not undercut the financial integrity of Social Security or provide justification for benefit cuts or privatization. This program should be protected - now, and forever.

Sincerely,

Max Richtman
President & CEO