Payroll Tax Cuts Threaten Social Security’s Promise

2011-09-09T10:26:00+00:00September 9th, 2011|Budget, Max Richtman, Social Security|

Here is our reaction to President Obama’sjobs address:?Putting Americans back to work is critical to our economic recovery. It?s unfortunate that for most of this year Washington?s attention has been diverted to deficit reduction rather than finding ways to stimulate our still flagging economy, which will itself reduce the deficit. We applaud President Obama for refocusing our national attention to where it should be–economic recovery–while offering relief that many Americans desperately need. We agree wholeheartedly with the President, the time to act is now and we hope Congress will move quickly to make job creation priority #1. Putting Americans back to work is also critical to keeping Social Security and Medicare strong. However, this proposal to extend and expand the payroll tax cut threatens Social Security?s independence by forcing the programto compete for limited federal dollarsfrom general revenues, andby breaking the link between contributions and benefits. As we predicted back in December, ?There?s no such thing as a temporary tax cut.? Just months after beingreassuredthat diverting contributions from Social Securitywould last for just one year, Congress is now being asked to extendand even increase this diversion of payroll taxesfor another year. Doubling-down by also cutting employer contributions greatly worsens the situation, and makes it even hard to restore the Social Security system to self-financing. If this extension passes, there is no guarantee that Congress won’t be asked to extend it yet again,for a 3rd or even a 4th year or longer, and expand it even more, making it a de facto permanent part of the tax code.This is death by a thousand cuts.Social Security is paid for, earned by and promised to American workers. We call on the President and the Congress to reaffirm the fact that Social Security has been, is, and will continue to be, a self-financed insurance program; and that this temporary payroll tax cut does not constitute aprecedent that would undermine this principle.? Max Richtman, NCPSSM President/CEO